If you live in Michigan and have accumulated significant wealth over the course of your lifetime, you should begin to plan your estate sooner rather than later. Estate planning consists of far more than just drafting a will and creating a trust. It involves ensuring your assets are in order and that you can distribute them effortlessly to your heirs upon your death. Moreover, it involves ensuring that your loved ones can control or access your possessions should you become unable to do so for whatever reason. According to Forbes, the makings of a successful estate plan begin with six essential documents.
Every estate plan needs a will or trust. Whichever you choose, the will or trust can serve as the foundation for your estate plan as both documents can ensure your property gets passed to heirs according to your wishes. Though both a will and trust can accomplish this goal, you should opt for a trust if you have substantial assets as trust can help limit estate taxes and legal challenges.
In addition to a will or trust, you should also draft a durable power of attorney. A POA assigns an agent who will make decisions for you should you be unable to make them for yourself for whatever reason. Absent this document, the court may have freedom to decide what becomes of your assets. In addition to a POA, you should also designate a health care power of attorney whom you trust to make health care decisions on your behalf should you be unable to make them for yourself for whatever reason.
You should also have a document that names your beneficiaries. You may have several assets, such as a 401K or life insurance policy, that you can pass to beneficiaries without including them in your will. This makes it easy to forget about such assets. A beneficiary list can account for those assets should you forget to account for them in your other estate planning documents.
Next, create a letter of intent. Address this letter to the executor of your estate or a beneficiary. The purpose of this letter is to make known your wishes regarding a particular asset and/or to provide details of your funeral.
Finally, if you have minor children, appoint a guardian or guardians. As with all designations, be sure you name a backup or contingent guardian as well.
This content in this article is for educational purposes only. It should not be used as legal advice.