An estate plan generally uses a variety of legal instruments, including wills and trusts, to distribute assets after a person dies. The pending estate tax code changes on these assets can have a profound effect on estate planning strategies for many Michigan families if Congress chooses to let them expire.
Many Michigan residents may have an IRA that they wish to leave to their spouse or a child once they pass on. However, without proper planning, much of this inheritance could be lost to taxes. Anyone with an IRA who is in the process of estate planning should understand how tax laws will affect their heirs. Doing so may allow the inheritance to have a more positive effect on a loved one's life.
Estate planning can be a complex process, and when the assets involved in an estate are of high value, it's especially critical to understand all the ways taxes can affect one's estate. That's especially true as 2012 comes to a close, because major changes in gift and estate laws for 2013 could have a massive impact on estates valued over $1 million in the coming year. These changes will not only affect estate planning here in Michigan but throughout the entire United States.
A conservatorship can be a useful tool for families who have a loved one who may no longer be able to make decisions in their own best interests. Usually these situations arise from an elderly person who may be suffering from dementia, such as Alzheimer's disease or someone who has been injured in an accident and may be incapacitated for a period of time. However there are circumstances in which a person may be considered by a probate court to be unable to make decisions on their own behalf or on behalf of their own children. The case of Britney Spears is one recent example.
When a person owns substantial assets, a will or trust can play an important part in the distribution of these assets. However, some people would prefer a more complex estate plan than simply passing on their assets to their children or partner. If someone gives assets to a charity, either through a charitable trust or outright donation, it can be beneficial to check how this will affect the overall administration of the estate, particularly with regard to tax issues and benefits when it comes to charitable giving.
The death of a loved one can be a difficult matter to handle. Emotions are riding high and level heads are few and far between. If the deceased is without a will to specifically advise survivors on how to distribute the estate's assets and survivors disagree on what should happen to the estate, matters can get complicated quickly. In cases such as this, probate litigation will ensue in order to provide a resolution, as this story demonstrates. That is why it is so important for Michigan residents and others elsewhere to plan for the unexpected with a will or trust.
As discussed in last week's post we will continue this week on the importance of remembering digital assets in estate planning activities. Many in Michigan and elsewhere spend a good portion of their time online performing a variety of activities from gaming to investing and sharing photos. In doing so we are creating an online legacy of sorts in which we may want our loved ones to have access to in the event we become incapacitated. The United States General Services Administration suggests people consider creating a "social media will" of sorts.
Welcome to the digital age where we now have to consider such mundane things as our Facebook login credentials in our estate plan if we want our loved ones to have access to it upon our passing. Many Michiganders often forget about digital assets when planning their estate, both non-financial and financial assets, such as your online trading accounts or your online gossip trading accounts. Think about all the online photo albums you may have stored on various social media and file sharing websites such as Flickr and Facebook, do you want loved ones to be able to access those photos?
Michigan residents may have heard that iconic television star Sherman Hemsley, star of "The Jeffersons" passed away several weeks back. And as is rather common when a celebrity dies, long lost relatives pop up to contest the will and delay probate for whatever reasons. Such is the case with Sherman Hemsley, whose body will be kept on ice until a local probate court can rule on his will, which is being contested by a man who claims to be Hemsley's brother.
As discussed in last week's post, there are a number of life events that should trigger a review of your estate planning goals and documentation, including a marriage, divorce or death in the family. Often certain aspects of an estate plan are missed in a divorce, such as changing the beneficiary of a life insurance policy or bank accounts. Durable powers of attorney should also be updated along with the names on any trusts. This step also includes children who turn 18-years of age, as discussed in a post a few weeks back.