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Common Questions Regarding Wills, Trusts and Probate Q: I am widowed and have two minor children. What happens if I die without a Will? A: The probate will court will appoint a guardian and conservator for your two children, usually a family member of yours that hopefully you would approve. Any remaining assets at the time of your death would be divided equally to each child and when they reach the age of 18 they could spend their inheritance money any way they want. Q: What are the advantages of having a Will? A: A will can do a number of things to give you peace of mind: 1) You can nominate a guardian and conservator for your minor children, rather than have the court decide, 2) you can appoint a personal representative, some one you trust, to make sure your will is carried out as it is written, 3) you can leave a percentage of your estate to a church or charitable organization, 4) you can give a higher percentage of your estate to a special needs child or even disinherit a child, 5) you can request unsupervised probate administration, which lowers court costs and speeds the process up. Q: Besides a Will, is there anything else I should consider in estate planning? A: Yes, it is good to have two other legal documents: 1) Durable Power of Attorney, and 2) Health Care Advocate with Living Will. The Durable Power of Attorney that we recommend is only effective if you become disabled and provides that you have selected a person or persons to administer your financial matters for you while you are unable to perform these duties. The Health Care Advocate is only effective if you become disabled and provides that you have selected a person or persons to take care of your health care needs. Attached to the Health Care Advocate is your Living Will whereby you make your intentions known to doctors and family whether you want to be kept alive on life sustaining equipment or to die naturally when suffering from a terminable injury or disease and there is no hope of recovery. Q: I know this sounds selfish, but I am in a second marriage and my health is not good. If I die before my wife, my hard earned assets will go to her, which is fine, but then when she dies will my assets go to her bratty children of her first marriage and none to my children from my first marriage? A: You are correct unless your wife's will makes a provision in her Will for the children of your first marriage. One way to insure that your children receive some type of compensation is to buy a term life insurance policy and name your children as beneficiaries. The proceeds will go directly to them and are outside the Will and not enter probate. Q: Hey, I am the wife he is talking about and he is selfish. Can I disinherit my no-good hubby in my Will? A: Well you can disinherit your spouse in your Will, (believe it or not, you will not be the first spouse to do that), but the law provides that the disinherited spouse may over-ride the Will and take his or her elective share. What does that mean? Even if your Will gives everything to your children and you purposely disinherit your husband, your husband can step in and take a substantial amount of the marital assets. MCL 700.2202(2)(b) provides: That the surviving spouse (your husband) can take an elective share of 1/2 of the sum or share that would have passed to him if you died intestate (without a will), reduced by 1/2 of the value of all property derived to him from you, despite what you said in your Will to disinherit him. This over-riding of a Will is only applicable to spouses. Who said a marriage license is only a piece of paper? Q: Is there anyway I can stop him from taking his elective share? A: A prenuptial agreement can prevent a spouse from taking the elective share and sometimes a trust can too. Q: I am a very religious and health conscious person. I never want my children to drink alcohol or partake in nicotine products. Can I put that in my Will? A: Yes, actually you can. Many courts have upheld "prior conditions to be met" in order for the beneficiary to receive his or her inheritance. Some conditions, however, may be too difficult for the court to enforce or put too difficult a burden on the individual. If the court finds this, the "prior condition to be met" will be struck down by a court. Check with your attorney but remember, if your child receives his inheritance in full then the conditions may simply no longer apply. Q: What is a trust and do I really need one? A: There are many types of trusts but the most common is the revocable grantor trust which is also called a living trust. The trust may be modified by the settlor (you) until the settlor's death or incapacity. This type of trust has many advantages: 1) It can avoid or minimize probate and thus save probate costs, if any, and keep your financial affairs private; 2) It can distribute or manage your assets by a person you have selected; and if you have minor children you can make provisions so that your children will not receive their full inheritance at age 18; 3) it may reduce estate taxes, if any. Whether you need a trust depends on several factors your attorney can review with you. Many people choose to put their marital home in a revocable trust (we do not recommend this if you soon plan to request Medicaid, see next question and answer). Q: How do I qualify for Medicaid? I am 64 years old. A: There are different income eligibility requirements depending on whether the applicant is in a nursing home, but generally speaking, the asset limits for a person over 65 are $2,000 for an individual and $3,000 for a couple. However, only countable assets are used and Medicaid excludes from the assets a) one homestead, regardless of value, 2) one vehicle, regardless of value, 3) household furniture, regardless of value and 4) prepaid funeral contracts and funeral insurance. A revocable trust, as mentioned above, is counted. Q: Is probate expensive? My uncle died and left only a used car. A: Probate does not have to be expensive unless there is a legal battle. A carefully drafted will, durable power of attorney, health care advocate and possibly a trust can keep the costs to a minimum. If the estate (or blue book value of the car) is under $15,000 then a minimum of probate forms and costs are needed to transfer title of the car. The answers given above are intended to give you general guidance but it is always necessary to consult an attorney regarding your specific circumstances. |
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