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Grand Traverse County Michigan Divorce and Estate Planning Blog

Key individuals in estate planning

Over the years, one begins to realize that life does not go on indefinitely. The simple fact is that while each Michigan resident would like to think that he or she has plenty of time left, no one really knows for certain. As such, before it is too late, it is important to make sure that loved ones are taken care of through the estate planning process.

One important part of estate planning is naming an executor. This is the individual who will make sure that all assets are accounted for and be responsible for seeing that they are dispersed according to one's will. Although this individual is often a family member or close friend, there are times when it may be better to hire someone with knowledge of the individual's estate to act in this capacity.

Is it too late to protect my business in divorce?

Your business is the result of late nights and early mornings. After years of hard work it would be devastating to see it lost in divorce. Unfortunately a large amount of business owners in Northern Michigan will face divorce at some point. Certain precautions can protect a business in divorce proceedings.

For example, a prenuptial or post-nuptial agreement is an effective method to protect a business. These agreements may be unpleasant to talk about, but they can shield your life’s work from garnishment. Another method is to establish a Domestic or Foreign Asset Protection Trust. This would allow you to transfer ownership of the business into the trust, shielding it in divorce proceedings. Ultimately these measures must be in place years before discussing divorce with your spouse. Many business owners will need to consider other options.

Estate planning is more than just giving assets away

The typical Michigan resident spends his or her life working, raising a family and planning for the future. As one ages, thoughts of how assets should be distributed upon death come to mind. For some families, giving part of the inheritance to beneficiaries prior to one's death makes sense. However, for estate planning as well as other legal purposes, one may want to reconsider that option.

Rather than simply giving assets away, placing them in a trust may be a better choice. If assets are simply transferred to one's child, or other individual, it is possible that these assets could be at risk if the recipient becomes the target of collection efforts. If the assets are placed into a trust and managed by a third party trustee, they will most likely be exempt from such proceedings.

Financial planning as part of a Michigan divorce

Financial security is an important consideration when making long-term decisions. In some cases, individuals may decide that it is better to remain in an unhappy marriage rather than face the financial implications associated with a divorce. However, the majority of unhappy Michigan couples discover that while divorce does bring about a number of changes, once the financial aspects are addressed, each individual is able to move on and begin to create the life each desires.

Income is one aspect that should be considered. While it is possible that each individual will be financially stable based upon his or her own income, it is possible that one individual will be required to pay alimony to the other. The individual paying alimony is typically able to claim this as a tax deduction. Likewise, the individual receiving alimony must claim it as income.

More couples approaching golden years deciding to divorce

Retirement accounts, investment accounts and home equity are usually part of the equation as a Michigan couple grows older and approaches their golden years. However, research is also showing that for more and more of these couples, divorce is also becoming a reality. The number of Americans over the age of 50 who decide to divorce has almost doubled in the past 30 years.

Once the decision to divorce is made, many other decisions must also be made. As these decisions are being thought through and each individual reflects upon which assets he or she wishes to stake claim to, the cost, tax implication and potential decrease in value of each asset should be considered. For example, retirement accounts are generally where a considerable bulk of marital property is held. However, depending on the age of the individual, these funds are not readily available to meet living expenses without significant tax penalty.

Don't forget the smaller details in estate planning

Planning for the future takes on many forms depending upon each family's circumstances. For some families, a basic will is all that is really needed. However, for many Michigan families, there is the need for a more well-developed estate plan. Based upon the family dynamics and other concerns, estate planning should be a priority in planning for the future.

Many families develop a power of attorney for health care matters and financial concerns along with wills and trusts. However, prior to one's death, there are often other matters that need to be addressed that are not always taken into consideration when these documents are drafted. For example, if the individual becomes incapacitated due to illness or injury, does he or she want to be taken care of at home or within a care facility. Additionally, does this decision change based upon the type of care required and the effect it will have upon other family members.

During your divorce, don't forget this very important document

It's done. You got the agreement hammered out, it's been signed and you are now officially divorced. Your next step is making sure your assets and property are in your name alone. But is there one thing you are forgetting?

New you, new will

Now that you are officially single, there is one document that has become obsolete: Your will. Moreover, your newly single status makes it is especially important to bring it up to date. If you do not make new choices, your old will may leave money and property to people you would not prefer. 

Divorce, child support and avoiding responsibility

Years ago, the typical Michigan household consisted of mom, dad and the children. However, today's reality is that many households have gone through the divorce process, and one parent is no longer an everyday presence in the home. Regardless, for the most part, the noncustodial parent is diligent in meeting child support obligations.

However, in some instances, the noncustodial parent is unable or unwilling to fulfill court-ordered child support obligations. When this happens, it is ultimately the child who loses out. For this reason, the Michigan courts have taken a dim view of this practice and have established methods to ensure that Michigan's children are taken care of.

Estate planning can be in vain if beneficiaries not updated

Time and money are often spent planning for the future. At some point in time, the average Michigan resident recognizes the need for estate planning. When this happens, a will or perhaps trust accounts are established, allowing the individual to specify exactly who should receive what upon his or her death. However, all of this hard work can be in vain.

The majority of accounts that involve money also involve beneficiaries. For example, when one purchases a life insurance policy, a beneficiary is named. In fact, it is even a good idea to name a contingent beneficiary. However, as circumstances change over time, it is possible that the individual named as beneficiary on the insurance policy is no longer the individual the policy holder wishes to benefit. However, even if another individual is named in the estate plan, if the beneficiary is not changed on the insurance policy itself, there will be problems.

Proposed bill could affect Michigan divorce and child custody

Tea parties, baseball games and homework are all an important part of a child's life. In some Michigan families, both parents are available to participate in and be a part of these activities on a daily basis. However, in other families, these activities are often split between the parents as the result of divorce.

When parents decide to divorce, there are many things that must be considered. Perhaps one of the most important items is the specific terms of the child custody agreement. Spending time with the child is often a concern for each parent and a vital part of the child's life.

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