Estate planning has proven to be one of the least well known areas of law to the public at large. Not only that, there is a lot of misinformation out there. Here are just a few questions that, in my experience, are the most frequently asked:

So, what exactly happens if I do not have a Will?

In the state of Michigan there are statutes in place that acts as a “default” Will. Without having an estate plan, this is how assets are distributed:

• If you have a spouse and no children, 100% goes to the spouse.

• If you have a spouse and children, 50% goes to the spouse, and 50% gets divided between the children in equal shares (for instance, if you have one child, that one child gets 50%. If you have two children, each child would receive 25% each. If you have three children, each child would receive 16.66%).

• If you do not have a spouse but have children, 100% goes to the children in equal shares (for instances, if you have one child, that child will receive 100% of your assets. If you have two children, each child will receive 50% each of your assets).

• If you do not have a child or a spouse, your assets will be divided evenly to your parents or solely to one surviving parent.

• If you do not have a child, spouse, or surviving parents, your assets will go to your siblings in equal shares.

• If you do not have a child, spouse, surviving parents, or siblings, then assets will go to the state.
  

So, why do I need an estate plan?

Not all families, situations, or goal for asset distribution are the same. One size does not fit all. If you pass away without an estate plan, there is virtually nothing anyone can do to deviate from the state’s “default” will. Even family agreements outside of court to distribute can become undone if either people challenge the distribution in court. That goes double for real estate transactions since, not going through probate court, will prevent individuals from obtaining title insurance to sell the real estate in the future.

What exactly is probate court and why do I need to go through them to distribute my assets?

Only the owner of an asset has the authority to sign away assets to whomever they choose; be it in a sale or if they just want to give it away. Once that person passes away, no one is left that has the natural authority to sell, give away, or dispose of any of his or her assets.

Probate court provides a way for assets to be sold, given away, or disposed of once the sole owner of that particular asset passes away. The court appoints a personal representative to “step into the shoes” of the person who passed away in order to sell, give away, or dispose of any of his or her assets.

Ok, so I wish to avoid probate court, doesn’t a Will do that?

No. A Will does not allow you to avoid probate. The Will must be probated in order for it to have an effect.

Then what is the point of a Will?

It allows you to deviate from the “default” Will that the statute lists out. It allows complete freedom* to distribute assets as you wish. It also allows for you to distribute assets to non-heirs such as friends, causes, and charities.

*NOTE: Subject to exemptions. If you wish to know more about those exemptions, please ask me in a consultation.

What is included in my probate estate?

Any asset that is solely owned by you.

What is NOT included in my probate estate?

Any asset that you either own jointly (joint bank accounts, real estate with multiple names on the deed (check your deed, this only applies to property deeded with joint tenants with rights of survivorship or tenants in the entirety).

Is there any way to avoid probate?

Yes. I offer two packages that will help avoid probate: My Simple No Probate Package and my Trust Package.

What is included in your Simple No Probate Package?

Documents that, no matter what asset category, will transfer upon death on the event of your passing. Thus, when you pass, those assets are transferred automatically and does not pass into probate.

Ok, so what about a Trust? How is that any different than a Will?

A Will needs to go through probate and only allows for a one-time distribution. A Trust is an entity (think like a corporation or an LLC that can own, buy, and sell property) created for the sole purpose of handling the assets of an individual with provisions in place for what happens when the individual passes.

Think of yourself as the CEO of the Trust. When you pass, you can hand pick the next CEO who will take over for you to handle your assets.

Trust Agreements will dictate how your successor CEO (called Trustee(s)) how and when to handle assets included in the Trust. This includes when distributions will occur, what conditions needs to happen for distributions to occur, and other instructions you leave to handle your assets.

So how does a Trust avoid probate?

Technically, the Trust will own your assets, not you. So when you pass, since all of your assets will be owned by the Trust, you will essentially pass with no assets owned by you individually. No assets in your personal name means no probate estate.

Wait, so if the Trust owns my assets, can I use any of it when I am alive?

Yes. When you establish a Trust, you can set yourself up as the CEO (Trustee) of the Trust. You can control the Trust how you like while you are alive as if the Trust was yourself.

I have other questions.

Please book an appointment so I can elaborate or answer any other questions not answered on this page. If you book with Calder Legal, any fee paid for consultations will be credited towards whatever package you choose.