Estate planning and financial planning are two terms that are frequently heard in Michigan. What many people may not understand is the interconnectedness of the two. People may believe they don't need a financial plan as they have an estate plan in place and vice versa. The reality is that one without the other could leave significant aspects of one's estate and family unprotected in the event of one's passing. Estate planning can serve as a comprehensive guide for what happens to one's assets, both financial and nonfinancial.
It is important to be aware that a will or trust may not control the dispensation of all of one's assets. A will, for example, cannot override beneficiary designations on insurance policies or retirement accounts. If a person remarries, has children or experiences other life changing events those documents should be adjusted to reflect those changes.
Another important factor to remember is that a will only becomes relevant at one's death. Additional pieces of an estate plan are needed to specify one's wishes for end-of-life care or for making medical and financial decisions should one become physically or mentally incapacitated. One more important piece in this process is communication. Once the decisions have been made, they should be communicated to one's loved ones.
Estate planning can be difficult as few people wish to contemplate their own mortality in Michigan. The truth is that by establishing a solid plan that incorporates the dispersion of both financial and nonfinancial assets one is giving loved ones a priceless gift. Consulting with a knowledgeable estate planning attorney can be helpful in crafting a comprehensive plan that works for the present and allows for future changes.