How Having an Estate Plan Helps Avoid Conflict Among Heirs

Families are often unprepared for the inevitable loss and aging of parents. This leads to unprecedented rivalries that risk or destroy the wealth and family unity that parents and the estate planning lawyer worked so hard to protect. Properly crafted estate plan documents reflect a person’s instructions for ensuring that the proper beneficiaries receive their legacies and care provision for that person and their family.

Unfortunately, not even the best estate plan can substitute preparing heirs in readiness for dealing with: the complexities involved in the administration of a trust and estate, changing care needs of aging parents as well as other family members, and how to resolve or prevent conflict among siblings and avoid elder financial abuse.

The Inevitability of Conflict

Disagreements will always be there among family members, and it is how families manage and prepare for the conflict that will make a difference. In the absence of a process for conflict resolution and communication, the only thing that can happen is a permanent breakdown of family unity and costly litigation.

Parents rarely ever never want to think about conflicts among their children. However, successful families need to participate in foundational processes to prepare heirs for the inevitable loss and aging of their parents. The families participate in planning and education, discussing potential conflicts, and institutionalizing conflict resolution in the presence of a neutral mediator.

The processes help such families reduce family discord or avoid it altogether. Doing this helps to preserve family wealth and unity. Estate planners have a unique chance to weave estate planning mediation into the estate planning process while educating clients along with their families about the benefits they stand to enjoy.

Preparing Heirs by Using Confidential Estate Planning Mediation

Confidential estate planning mediation takes place in the presence of the client, their family, the estate planning attorney, and the mediator. The topics of discussion are limited to those that won’t put lawyer-client privilege at risk. The result of the confidential estate planning mediation is a memorandum of understanding for the client’s family and the estate planning lawyer.

Confidential estate planning mediation meetings provide family members with a platform to express their ideas, concerns, learning, and discussion. This approach helps heirs work out solutions so that they align with the wishes of the parents. Family members involved in such an undertaking are less likely to dispute what they had a hand in crafting.

The memorandum of understanding that comes as a result of the mediation reflects the issues and ideas discussed, proposed solutions, agreements reached, as well as a statement of whether or not the memorandum can be released and to whom. Confidentiality of the memorandum can be waived to allow the sharing of the memorandum with an investment advisor, estate planning lawyer, and other relevant advisors.

Participants can decide to turn to mediation for resolution of future conflicts to matters that might have changed since the first mediation. Family members that may later raise issues with the estate plan will refer to the memorandum that they helped create.

Final Thoughts

Estate planners and their clients have much to benefit from estate planning mediation. Heirs who are sufficiently prepared are less likely to initiate or sustain conflict. Estate planners that encourage mediation reduce the chances for unresolved disputes and misunderstandings, and increase the likelihood of protecting family wealth and unity.

Schedule Your Free Consultation with Our Michigan Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township and Bloomfield Township.

Schedule your free consultation today by calling 248-398-4665.

An Explanation of How Probate Works In Michigan

Probate refers to how estates get settled officially under court supervision. The court appoints a person. Usually, an adult child or a surviving spouse in the absence of a will or the deceased person’s will nominates a person. Once this person known as the Personal Representative or executor has been appointed, he or she is given the legal mandate to gather and value assets the estate owns, to pay taxes and bills, and distribute assets to beneficiaries or heirs.

Probate is designed to combat fraud after a person’s death. It freezes the estate until a court of law determines that the will is valid, all property in the estate has been located and appraised, a notification was sent out to concerned parties, there is a settlement of liabilities and payment of taxes. The court issues an order after all that has been done to distribute the property, and the estate is closed.

How Probate Works In Michigan

The Uniform Probate Code (UPC) is a set of laws that spell out the general procedure involved in settling an estate through probate in Michigan. Michigan is among the 15 states that have adopted The UPC albeit with minor variations.

Under the UPC in Michigan, there are three kinds of probate proceedings: supervised formal, unsupervised, and informal.

  • Supervised Formal Probate

Supervised formal probate refers to one whereby the court comes in to supervise the entirety of the probate process. Under supervised formal probate, the court has to approve the distribution of any property in such proceedings.

  • Unsupervised Formal Probate

All formal probates are court proceedings even for the unsupervised ones. The judge must first approve some actions the Personal Representative takes including paying a lawyer, asset distribution, or selling estate property.

A judge is involved in settling disputes arising among the beneficiaries over the meaning of a will, asset distribution, or the amounts due to particular creditors. The informal probate process cannot work in case of disputes, and that is when the court comes in.

  • Informal Probate

In Michigan, the majority of probate proceedings are informal. Informal probate is a common procedure when there are no creditor issues to resolve, beneficiaries and heirs are getting along, and no problems at all are expected.

The informal probate process starts once you file an application with the probate court to act as the estate’s “Personal Representative” or executor. After the approval of the application, you are now legally mandated to act on behalf of the estate. You will then receive from the court what is referred to as “Letters testamentary.”

Once you receive the letters, you are required to do the following:

  • Ensuring the safety of all the property
  • Distributing the property once the estate closes
  • Preparing an inventory and appraisal of the assets of the estate
  • Publishing a notice in a local newspaper alerting other creditors
  • Providing proof that you have issued the notice and mailed notices
  • Sending out formal notices to beneficiaries, heirs, and creditors you are aware of

Once there is a distribution of property, an informal proceeding is closed by filing a “final accounting” with probate court along with a “closing statement” stating that you have distributed the property, paid all taxes and debts, and filed the accounting.

Final Thoughts

If you have been wondering about how probate works in Michigan, now you have your answer. The most important thing is to ensure that you find an estate planning or probate lawyer to help you follow the right steps and ensure the best outcome possible.

Schedule Your Free Consultation with Our Michigan Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township and Bloomfield Township.

Schedule your free consultation today by calling 248-398-4665.

What to Discuss with Your Estate Planning Attorney Before Hiring Him or Her

No matter your age, creating an estate plan is an essential aspect of financial and family responsibility. For many folks, this is one of the most complex legal matters you will ever handle. It is vital that you find the right attorney to assist with your estate plan.

You will find that many lawyers advertise estate planning services as just one part of the practice. While this “one-stop-shopping” might seem like a good idea, you want to have someone handling your estate who focuses on estate planning. The fact is that setting up your estate involves multiple aspects of the law, including elder law and probate considerations.

Ask any prospective attorney how much of their practice includes elder law and estate planning. You want to hire someone who devotes at least half of their time to estate planning. Any less, and it is likely that they will lack the full scope of knowledge needed to plan your estate in the most equitable manner.

Although most attorneys can legally draft such documents, there are nuances to the law that can make a big difference in the price you or your loved ones pay regarding your estate. While you are discussing their experience with estate planning, inquire about other aspects of law relevant to your situation. These often include government benefits, elder law, business, real estate, taxation, and probate.

Another thing you want to know is if the attorney has experience with probating estates or if their focus is on helping clients to avoid probate. Fully-funded trust-based estate plans can save your loved ones a considerable amount of time and money.

In addition to finding out the general practice of the attorney, you should inquire whether they help you properly title your assets, such as your real properties and financial accounts. You need a lawyer capable of helping you to fund your trust, and a willingness to work with you to do so.

Before selecting an estate planning attorney, you should also ask about their continuing education. As with many other professions, it is important to have a professional who engages in learning, even if your state does not require it. Laws change, and the way to handle legal documents along with it. You deserve an attorney who is abreast of the latest in estate planning and elder law.

If you are satisfied with the answers you have received up to this point; you can then ask what type of preparation you need to do for your appointment. A reputable and reliable estate planning attorney will want comprehensive information regarding your properties, beneficiaries and more. Being properly prepared will expedite the process.

You deserve the peace of mind that comes with proper estate planning. Asking these questions will help you to find the right law firm to assist with the drafting and execution of all of your estate related documents, from preparing the documents to ensuring the right beneficiaries receive your estate.

Schedule Your Free Consultation with Our Michigan Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township and Bloomfield Township. Schedule your free consultation today by calling 248-398-4665.

An Introduction to Michigan’s New Asset Protection Trust

Trusts have always been excellent estate planning tools. Your beneficiaries can enjoy all kinds of protections once you are gone, including protection from remarriages, divorce, or creditors. Even though beneficiaries could enjoy access to the trust’s assets for their needs, their creditors or their divorcing or new spouses couldn’t in many cases.

However, these protections weren’t available to you during your lifetime. While you’re still well and alive, you enjoyed complete access to the assets in your trust and by extension so do any creditors.

The situation has however changed since December 5, 2016 with the introduction of Michigan’s new asset protection trust act known as the Qualified Dispositions in Trusts Act. The Act took effect on February 5, 2017. With the introduction of the act, Michigan has joined 16 other states that already allow Domestic Asset Protection Trusts (DAPTs).

Domestic asset protection trusts are irrevocable trusts that can shield assets from the claims of an individual’s creditors, provided that the individual meets the particular legal requirements. Individuals who are worried about potential creditor exposure, notably physicians, executives, and business owners, need to consider using Domestic Asset Protection Trusts (DAPTs).

Before the introduction of Michigan’s new asset protection trust act, people who wanted to use a DAPT had to first transfer their assets to out-of-state trustees in jurisdictions such as Nevada, Alaska, or Delaware. However, the introduction of the new law means that assets can be transferred to a person that resides in Michigan, such as a Michigan professional, corporate trustee, or a family member.

The transferor can never be the trustee since he or she can only be a beneficiary of the trust. However, the transferor may still retain rights to:

– Veto distributions from the trust

– Replace or remove trustees

– Receive income from the trust

– Receive discretionary distributions of the income or principal

– Direct investment decisions of the trust

– Receive unitrust payments or annuity from charitable remainder trusts

– Receive annuity from the trust not exceeding 5 percent of the initial value of the trust

– Receive unitrust payments or annuity from a grantor retained annuity trust

– Direct the distribution of assets upon the death of the transferor provided that there is no transfer of assets to the creditors of the transferor’s estate, the transferor’s estate, the transferor’s creditors, or the transferor.

If adequately funded and established, the Act protects the assets the transferor has relocated to the trust from the transferor’s creditors upon expiration of a 2-year period starting the date the assets were relocated except particular situations involving fraudulent concealment. A longer statute of limitation may apply in the case of bankruptcy.

Final Thoughts

The introduction of the Qualified Dispositions in Trusts Act is good news for Michigan residents since it offers numerous asset protection benefits. If you have any questions regarding the Act or any other information regarding estate planning, you need to find a qualified and experienced estate planning attorney to help you.

Schedule Your Free Consultation with Our Michigan Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township and Bloomfield Township. Schedule your free consultation today by calling 248-398-4665.