| Much like an insurance plan, a properly crafted estate plan can make a world of difference in the event life takes a turn for the worse. When it comes to estate planning, an ounce of prevention is certainly worth a pound of cure.
We had lunch with three Varnum attorneys to ask their input on what simple steps each of us can take to help prevent a burdensome and potentially financially ruinous situation for our families in the event of incapacitation or death. Here’s what we found:
A: Designate a Patient Advocate. This is critical for anyone 18 years and older. While having a complete estate plan is important, everyone should plan for potential health complications that can arise at any time. A Patient Advocate is able to make health care decisions for you if you are unable to make those decisions yourself. Q: When is it appropriate to deed your home to a trust? A: This depends on the specific situation of the homeowner. Establishing a trust and then deeding your home to it, especially if it’s a joint trust with your spouse, can be a very effective way of simplifying the passing of your home to your beneficiaries upon your death. The purpose is to avoid probate, which is costly and time consuming. In most situations, a single person should convey his/her home into a trust. Alternatively, married couples must decide how to balance the asset protection benefits of owning their home jointly against the probate avoidance offered by trust ownership. Q: Now that the estate tax exemption is $23.16 million per couple, is an estate plan still needed? A: Yes. Creating an estate plan is a wise use of time for almost everyone. Most estate plans are created to direct assets to the appropriate beneficiaries after death, not to minimize an estate tax liability. Most people don’t have assets that exceed the estate tax exemption, even before the exemption was increased in 2018, so the value of someone’s assets doesn’t really have much bearing on whether they should have an estate plan or not. In fact, some of the most expensive probate proceedings involve estates with modest assets, so estate planning is especially helpful in the vast majority of situations. Thanks to Rob Huff, Linsey Gleason, and Laura Radle of Varnum for their time and input. They can be reached at (616) 336-6000. |
Q: What is the single, most important, immediate thing someone can do from an estate planning standpoint?