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Michigan Credit Union League Home » CU Community » SAS Credit Unions » Marketing » Newsletter Help » Financial Health  

Additional Newsletter Topics
Lori Z. Bahnmueller
Michigan Credit Union League-Your Money Matters

Almost everybody has heard of a will and understands that its basic function is to assign your property and assets to a new owner upon your death. However, unlike the theatrical depictions often seen on television, wills involve far more than any 30 minute drama can detail.

In real life wills are far more complex and involve the probate process. Probate is the legal process that distributes your property and handles your bills upon your death. It uses your will if one exists, or state law if one does not, to decide the distribution. It is also used when someone is rendered incompetent or when minor children are involved. Probate is the only way to transfer legal possessions (mortgages, bank accounts, property) when the person listed as the owner is unable to sign off due to illness or death. Probate proceedings can be relatively simple if you don't have much in the way of assets and you don't have minor children. Conversely, they can be expensive and time consuming if the opposite holds true. In fact, if your will is disputed, it can take years to complete the process, during which time your assets are frozen and handled by the court. For those of us who are assuming that our family members and significant others will receive their inheritance immediately, without major deductions for probate fees, this is not a pleasant thought.

While wills are highly effective for many people, other options exist that could possibly keep your loved ones from going through much of the probate process. One such option is a living trust. A trust is similar to forming your own company with you as the owner, and your heirs as the employees. Everything you own belongs to the company, but you call the shots. Should you become unable to continue running your "company" due to illness or death, the company's other officials would take over immediately. Often, this happens without any court involvement but life offers few guarantees and there are times when even a trust is involved in the probate process.

So what's right for you? Due to their complex nature, only your lawyer can properly advise you on the subject of wills and trusts. Whatever estate planning method you use, the first thing you'll need to do is make a list of your objectives. Include all of your assets, the individuals for whom you want to provide, and how you intend to provide for them.
having this prepared in advance makes sense; the more prepared you are when you walk into your lawyer's office the less money it will cost.

You will also need to consult your lawyer on non-financial matters such as guardianship of minor children, which can be handled only through a will and probate. A living trust and a will can be beneficial in such cases. If you have no legal documents to handle this state law and the courts will determine who gets your property and your children.

If you have no minor children and limited assets, you can probably accomplish your estate planning goals using joint ownership and/or beneficiary designations on life insurance policies and financial accounts.

Many people believe they cannot afford to have this done professionally and the fees charged for trusts vary widely. Before you rule the possibility out, make some calls--you might be surprised. For those who cannot afford legal services, a simple statutory will is available in Michigan. This version of the will is a fill-in-the-blank style legal document that you can obtain from your state legislator and many libraries. A word of caution, these forms cannot be altered. If you believe you will need to make alterations, use the form as a guide to the issues that need to be discussed with your attorney.

If you can retain legal counsel, I recommend that you shop around. This is a sensitive subject and you should find someone that will take their time. I also recommend that choose an attorney who handles a variety of probate/estate planning matters, such as wills, living wills and medical powers of attorney.

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