Month: November 2010

The Downside to Leaving Your Estate to Heirs

November 28, 2010 / Michael

I’m sure you’re wondering, “what are you talking about? Isn’t it good to leave my estate to my heirs?” Well . . . not necessarily. As I mentioned in this earlier post, an “heir” is someone who inherits from you if you do not have a Will or a Trust. That is, they inherit from you based on what Michigan’s “intestacy laws” say.

Before you assume that is “well and good,” consider these situations:

Second marriages – you may be surprised at the amount your children receive (or really what they do not receive).
Charitable gifts – if you want to benefit a charity, you better have a Will (or better yet, a Trust), because they are not “heirs.”
Special needs child – if receiving governmental assistance is important to their quality of life, too bad, because they are set to get their share outright as an “heir” when they turn 18.
A child (or spouse) who is a spendthrift or has substance abuse problems – in these cases one of the worst things you can do is give them a significant sum of money, yet they are entitled to it as an “heir” if you haven’t planned otherwise.

There are many more situations when being an “heir” may not be a good thing. These are just some of the more common ones I’ve observed.

The great thing is that you can avoid these pitfalls by taking the time to setup an estate plan with a lawyer who focuses in estate planning. These and many other undesired outcomes can be addressed through careful planning that centers on what is most important to you. And it can help you leave the family legacy that is important to you.

If you find yourself in any of the situations listed above, call us at 616-827-7596 to schedule a Peace of Mind Planning Session to discover how you can “have your say.” And if you mention this blog post, we’ll waive the planning session fee ($750 value!).

Michael Lichterman is an estate planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™. This goes beyond merely planning for finances – it’s about who your are and what’s important to you. He focuses on planning for the “experienced” generation, the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, and family owned business succession – and he is privileged to do so from a Christian perspective. He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

Estate Planning for Young Professionals … What You Don’t Know CAN Hurt You

November 21, 2010 / Michael

I recently read this post by my colleague and friend, Steve Worrall, an estate planning attorney in Georgia. Mr. Worrall points out several reasons why an estate plan is of critical importance for young professionals. I’m not going to re-print the list here, you’ll have to read his post. And I believe the items he mentions are just as important to Grand Rapids Young Professionals . . . hey, that’s catchy . . . I belong to a group by that name! I assure you that estate planning is critically important whether you belong to the group or not.

As a young professional myself, I have a strong passion for reaching out to fellow Grand Rapids young professionals to make sure they have a plan in place for themselves and their family if something happened to them. I’m happy to say that the idea of estate planning is typically warmly received. I think the biggest struggle for Grand Rapids young professionals and planning is that nobody has ever explained the importance of estate planning to them. As a matter of fact, if I were not an estate planning lawyer I probably wouldn’t have heard about the importance of estate planning either!

And that is why I try to get the word out through speaking engagements and networking with my fellow young professionals. Being one, and knowing many, let’s me know that young professionals do recognize the importance of estate planning…as long as someone will care enough to talk with them about it. You’ve worked hard in college, your job, and possibly post-graduate work and you surely don’t want all you’ve worked for to be lost to court proceedings, costs and potentially not benefiting those for whom you cared the most. And you don’t have to be married or have children to benefit from estate planning.

Finally, don’t forget to work with a grand rapids estate planning lawyer who plans for life by having systems and processes in place to make sure your estate plan is kept up to date. With all the hustle and bustle of life as a young professional, there is no doubt that your life, your assets and the law is going to change throughout your life. You should make sure that your estate plan changes to keep up and that your estate planning attorney doesn’t leave the responsibility for the changes all on your shoulders.

Don’t let Michigan law determine what will happen to what you’ve worked so hard for. Call us at 616-827-7596 to find out what would happen if something happened to you and how YOU can have a say in how things are handled.

Mental Capacity to Make a Michigan Will

November 18, 2010 / Michael

I’ve had several people ask me over the years about what level of mental capacity is required for someone to create a valid Michigan Will. The starting point is with the Estates and Protected Individuals Code – Michigan’s law governing Wills (among other things).

MCL 700.2501(2) lists the requirements for someone to legally have sufficient mental capacity to make a Michigan Will. They are:

The ability to understand that he or she is providing for the disposition of his or her property after death;
The ability to know the nature and extent of his or her property;
Knowing the natural objects of his or her bounty (e.g., who you would normally be expected to give things to, such as family); and
The ability to understand in a reasonable manner the general nature and effect of signing his or her will.

Note: all requirements must be met.

So, how does this “play out” in real life? Well, there just so happens to be a recent Michigan case that gives an example. In the case (click here to view) someone challenged a Michigan Will because they felt the testator (creator of the will) lacked capacity when she signed it. She had been diagnosed with dementia. The court pointed out that there was no evidence that she was not able to comprehend the nature and extent of her property, recall the “natural objects of her bounty,” or determine and understand the disposition of her property that she wanted to make. The court stated that “weakness of mind and forgetfulness are insufficient to invalidate a will if it appears that the mind of the testator was capable of attention and exertion when aroused and [she] was not imposed upon.”

If you have questions about a similar situation, call us at 616-827-7596.

Life Is More Than Money: Leaving a Lasting Legacy

November 14, 2010 / Michael

I’ve made a presentation to several different groups entitled “Life Is More Than Money: 5 Common Estate Planning Mistakes That Could Leave Your Family Without a Legacy.” Why am I telling you that? Because I recently read this NY Times article and it seems that more people are realizing the value of estate planning for their “intangible wealth.” I’m happy to say I’ve been helping Grand Rapids area families plan for their “intangible wealth” for some time now through my focus on Whole Family Wealth Planning™.

The article points out the importance of considering and planning for the legacy you will leave for your family by thinking of the “intangible assets” you will pass on, such as your values, insights, stories and experiences. I applaud the article’s author for realizing this important fact – when something happens to you, your “stuff” is left, but you are gone. That may go without saying, but many families and, dare I say it, attorneys, don’t think about that. That’s why I focus on helping families plan for who they are and what is important to them . . . not just what they have.

Remember, estate planning is not something you do for yourself. It’s something that you do for those you love the most because they are the ones that will have to deal with the ease or burden of what you did or didn’t do planning-wise. Estate planning really is an expression of your love for your family . . . one far greater than a new toy, going to the best college or having the nicest house. You are planning for their future and future generations.

You’ll also notice that the author used a team approach to planning. Absolutely . . . this is the best way to make sure you have all your “ducks in a row.” A financial adviser, CPA and an estate planning attorney that focuses on Whole Family Wealth Planning™ are the keys to developing a lasting legacy. Of course, the professionals need to have knowledge and experience in legacy planning, otherwise you end up with just a set of documents and nothing more. Carefully consider this when you do estate planning.

And finally…DO IT! Procrastination is the killer of legacies…don’t let your delay leave your family without the benefit of your life experiences and the guidance and direction you want for them. Call us now at 616-827-7596 to schedule your Peace of Mind Planning Session (note the peace of mind the author got from planning). Mention this blog post and we’ll waive the meeting fee ($750 value)!

Who is a Michigan Heir

November 8, 2010 / Michael

I’ve had several people ask me, “what is an heir?” Well, it is better said, “who is an heir?” Michigan law says that an “heir” is a person who is entitled to inherit according to Michigan law from someone who died without a will or trust (MCL 700.1104(n)). “Person” is a loose term as it also includes the State of Michigan. Doesn’t that make you feel all warm and fuzzy? If you don’t have anyone who survives you and is entitled to your property according to Michigan law, the property goes to the state!

So why does this matter? Well, one example is if you have charitable inclinations and would want a charity (or multiple charities) to receive something if you passed away. Or, at the very least, receive something rather than having it go to the State. Sorry, it’s not going to happen if you don’t have a will or trust because state law does not list charities as an “heir.”

Or, say you have several children, one of which is financially very well off and does not need to inherit anything from you (or doesn’t want to). They are still an “heir” if you do not have a will or trust that says otherwise. Or a relative who has a substance abuse or addiction problem. Many people feel bad about “disinheriting” someone, and I understand that. Even saying the word makes it sound mean. But there are certain situations where it may be desirable, such as the previous examples.

The key here is that a Michigan “heir” really matters to only those folks who have not planned for their family’s protection and well-being if something happened to them. Here’s the good part – you CAN say who receives what! You just have to take the time to meet with an estate planning attorney who take the time to help you put your goals and desires into action. Sure there is a cost, but what is the alternative…having the State make that determination for you? To many, that is a far more costly situation as it leaves what happens to your legacy up to the State, not you.

If you want to have your say in your legacy, call us now at 616-827-7596 to schedule your Peace of Mind Planning Session. Mention this blog post and we’ll waive the planning session fee ($750 value).

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