No one in Michigan likes to think about death, but it is a reality that we all have to face at some point. To protect your assets for your family or loved ones, you must have an estate plan in place. Here are the key elements of estate planning and why it is so important to have one.
Creating an estate plan in Michigan: Key elements
The first thing to consider in estate planning is deciding who will inherit your assets. You can choose to distribute your property in several different ways, but one of the most common methods is through a will. A will allows you to designate specific individuals or organizations to receive your property after you die. If you do not have a will, the court will dictate how your property is distributed, which may not be what you would have chosen.
Set up a trust. A trust allows you to appoint someone to manage your assets on behalf of your beneficiaries. This can be helpful if you want to ensure that your children or other loved ones receive money or property from you but do not want them to have direct control over those assets. A trust can also help avoid probate – the legal process of distributing a person’s property after they die.
Why is it essential to plan for your assets?
For tax purposes. If you don’t have an estate plan in place, the government will take a large chunk of your property and assets after you die to pay estate taxes. However, if you set up trusts and other mechanisms to distribute your property, you can reduce or even eliminate these taxes altogether.
You can control what happens to you and your property when incapacitated. Health care directives and financial power of attorney will dictate how a doctor should treat you when sick and who will make business or financial decisions for you when you can’t.
An estate plan is something that everyone in Michigan should have. Even if you don’t have vast property or heirs, you can use it to protect yourself when incapacitated.