Developing an estate plan often does not reach the top of the typical Michigan resident's "to do" list. In its most basic form, estate planning involves drafting a will. Regardless, drafting wills may make the "to do" list; however, far too often this important task does not make its way to the top of the list.
A will actually does not become effective until the death of the individual. Soon after this point in time, an individual is appointed to act as executor of the estate; usually, this individual is identified within the will. After the will goes through the probate process, the executor is the individual responsible for itemizing all of the individual's assets and debts. He or she then makes sure the debts are paid. Once this occurs, remaining assets can be distributed to beneficiaries under the supervision of the probate court.
The will, however, does not generally include all assets owned by the individual. Assets that have specific beneficiaries identified through other specific documents are handled differently. For example, real estate that is held as joint tenancy will automatically pass to the other individual or individuals listed on the deed. Additionally, bank, investment and life insurance accounts that have designated beneficiaries will pass to the individuals indicated on these documents.
Creating a will appears to be a fairly easy task that is all too easy to put off for another day. Yet, the majority of Michigan residents fail to draft their wills while there is still time. Prior to meeting with legal counsel, the individual will want to review his or her assets, liabilities and desires regarding who should inherit.
Source: lakeconews.com, "Estate Planning: The difference between a trust and a will", Dennis Fordham, Feb. 24, 2018