You should recognize the fact that estate planning is not a static, one-time event. After your initial estate plan has been put in place, the world will keep spinning, and there will be twists and turns in your life.
In addition to this factor, things that are out of your control can enter the picture. Legislative measures can be enacted that have estate planning implications, so you should be prepared to make revisions as time goes on.
If you are responsible enough to create an estate plan while you are a young, self-supporting adult, it will be rather simple and straightforward unless you are a high net worth individual.
You should carry life insurance with your final expenses in mind, and you should have an asset transfer vehicle. A simple will could suffice during this stage of your life, but a living trust is more effective in the long run.
Every estate plan should include an incapacity planning component. You can state your preferences regarding the use of resuscitation, artificial hydration, feeding tubes, and mechanical respiration in a living will.
To account for medical decision-making that is not related to life-support utilization, you can name an agent in a durable power of attorney for health care. For financial matters, you can add a durable power of attorney for property.
You would act as the trustee while you are alive and well if you have a living trust. When you establish the trust, you can empower a disability trustee to manage the trust in the event of your incapacity.
Marriage will certainly necessitate the need for an estate plan update. You and your spouse should discuss your respective priorities and decide how you want to proceed.
A joint living trust can be the ideal choice for a wide range of couples. If you and your spouse establish the trust, you would be the co-trustees while you are living, and you would always have access to the assets in the trust.
The survivor would be the sole trustee, and they would typically assume complete control of assets that were jointly owned. Each person can convey their own separate property into a living trust and name different beneficiaries if they choose to do so.
One of the nice things about a living trust for married couples is the ability to adapt when children come along. You should name a guardian in a will when you have a minor child, and you can make the trust the beneficiary of sufficient life insurance.
Since you would already have a successor beneficiary named in the trust, this individual or entity would be prepared to manage assets on behalf of a minor child beneficiary.
Marital Status Changes
If your marriage does not withstand the test of time, or if you are widowed, your existing estate plan may need to be revised. Remarriage is another major life event that will alter the playing field from an estate planning perspective.
Some people that have accumulated significant resources are concerned about inheritances that they want to leave to their children when they are considering remarriage. The qualified terminable interest property (QTIP) trust is the ideal solution under these circumstances.
To implement this strategy, you establish and fund the trust, and you designate a trustee. This can be someone that you know personally, and you can alternately use a professional fiduciary.
Your spouse would be the initial beneficiary, and your children would be the successor beneficiaries of the trust.
If you die first, your surviving spouse would receive distributions of the trust’s earnings for the rest of their life. You could give the trustee the latitude to make discretionary distributions of the principal.
Property that is held by the trust could be used by your spouse. For example, if your house is technically owned by the trust, your spouse could continue to reside in the home.
In this manner, your spouse would be completely comfortable, but the terms would be set in stone. After their death, your children would be the sole beneficiaries to the trust.
Schedule a Consultation Today!
We are here to help if you are ready to work with a Troy, Michigan estate planning lawyer to update your existing plan or create an initial plan. You can schedule a consultation if you call us at 248-251-1001, and you can use our contact form if you would rather send us a message.