Michigan Estate Planning Blog

What Do I Do If I’ve Lost an Important Document?

 

Many important documents may be decades old. Therefore, if they get lost, you should know how to replace them. AARP’s recent article entitled, “You’ve Lost an Important Document. Now What?” breaks it down for you.

Passport. To avoid becoming a victim of identity theft, report a lost or stolen passport by calling 877-487-2778 or completing Form DS-64 online at travel.state.gov. You can also print the form at the website and mail it to the U.S. State Department. To get a replacement passport, you must submit a Form DS-11 in person at a passport office.

Birth Certificate. Contact the vital records office in the state where you were born and order a replacement.

Marriage Certificate. Contact the clerk of the county where the license was issued. This office will let you know the documents required, the cost and how the copy can be issued (online, by mail, or in person).

Social Security card. First, consider the need for a replacement because you rarely need the physical card. However, a replacement should be obtained if you’re starting a new job or live in a state where you need it to apply for a Real ID. To obtain a new Social Security card, you’ll need a birth certificate, driver’s license, state-issued identification card, or a passport. You should then complete an application on the Social Security website (ssa.gov) and mail or take your application and original documents to your Social Security office (the website has information on locations). The replacement card is free.

Will. Laws relating to estate planning are different in each state. However, generally, if your will was accidentally lost or destroyed and not revoked, it will still be valid and represent your wishes. A copy of the will can be submitted to the court at your death. However, you must have left behind clear evidence that you didn’t revoke it—proof that it was accidentally destroyed or lost or testimony from an impartial third party stating that you didn’t plan to change it. Your heirs will also need evidence that it’s a true copy, which the original witnesses or attorney can confirm.

Car Title. The replacement process for the title to your vehicle varies by state. Contact your Department of Motor Vehicles. You may be able to submit a form, or you have to submit a photo ID, vehicle registration, or registration renewal notice.

Reference: AARP (Feb. 14, 2023 ) “You’ve Lost an Important Document. Now What?”

 

What Three Things Do People Overlook on Estate Planning Benefits?

An estate plan is important for everyone. Without a legally enforceable estate plan, a court may apply state laws and decide how your assets will be distributed and who will raise your minor children. In addition to allowing you to direct the wrap-up of your affairs after you are gone, an estate plan can also help you reduce taxes, expedite settling your estate and reduce conflict in your family.

Yahoo Finance’s recent article, “3 Overlooked Benefits of Estate Planning,” explains that planning your estate entails making arrangements to ensure that your wishes are carried out after your death.

While some think estate planning is only for those with mansions and millions in the bank, this isn’t true. Instead, even those with modest assets can benefit from having a defined estate plan.

Remember that the estate planning process isn’t about how much you have—it’s about making sure what you do have ends up where you want it. It may also decide who will be responsible for raising any minor children who survive you.

Your estate plan can also affect taxes, the time it takes to settle your estate, your end-of-life medical care and the odds that your family will fight over it.

Deciding who gets what is the big question of many estate plans. Your estate consists of the assets, property and personal items you own at your death. This may include real estate, bank accounts, life insurance, stocks and investments, retirement accounts, and personal property like collectibles, vehicles, art and jewelry.

The documents in estate plans include a last will and testament, a living will, financial and medical powers of attorney and documents establishing various trusts.

Start your estate plan today with the help of an experienced estate planning attorney and review it periodically to accommodate marriages, divorces and births. The process often includes reviewing your property and wishes, drafting a will, naming an executor, assigning healthcare and financial proxies and settling other matters, like funeral arrangements.

Reference: Yahoo Finance (April 24, 2023) “3 Overlooked Benefits of Estate Planning”

 

Do I Need to Know about ‘Per Stirpes’ for My Estate Plan?

Per stirpes is one of the ways you can choose to divide your assets among your heirs. For many, it’s the preferred way to set up asset transfer upon death.

“Per stirpes” is Latin for “by branch.” It’s used in estate planning to state that assets are to be distributed according to the decedent’s family tree.

Motley Fool’s recent article entitled, “What Does Per Stirpes Mean?” says that, in other words, if you want to leave your estate to your children, and one of them dies before you do, a per stirpes designation means that the deceased heir’s share will pass to their children (your grandchildren).

The other primary way that assets can be distributed according to the terms of a last will and testament is per capita. This means “by heads” and divides the estate only among living heirs.
Per stirpes considers only direct descendants. Therefore, if your child passes before you, their children inherit their share of your estate.

Spouses aren’t included in the distribution. Therefore, even if a child were married at his death, his spouse wouldn’t be entitled to receive a share of the estate.

A per stirpes designation in a will can be used to ensure that all your heirs (and their heirs) are considered when it comes time to divide the estate.

Therefore, if you want to make sure that your grandchildren get a portion of your property even if your children die before you do, a per stirpes designation in your will can make sure that will happen.

Of course, every estate planning situation is different, so there’s no one-size-fits-all answer. If a person dies while their heirs have no children or other direct descendants, per stirpes and per capita are effectively the same thing. However, if you plan to put a will in place, your chosen designation could have significant consequences.

In most instances, a per stirpes designation in a will ensures that your heirs and their families will get a proportional share of your estate after you die—even if your direct descendants die before you.

However, your best designation depends on your preferences and circumstances. Ask an experienced estate planning attorney for help with your estate plan.

Reference: Motley Fool (April 22, 2023) “What Does Per Stirpes Mean?”

What Is Probate?

Investopedia’s recent article, “What Is Probate Court?” explains that people want to avoid or shorten the probate process because of its length and expense. This can be accomplished by creating a living trust, assigning your assets to it and naming beneficiaries for those assets. A living trust is an estate planning tool that can help you avoid probate's usually lengthy, sometimes costly, and always public nature.

Some assets, including life insurance and retirement accounts, are not generally subject to probate. You instead designate beneficiaries for them in the account paperwork held by the life insurance company, retirement plan, brokerage, and bank. As a result, these funds will flow directly to the beneficiaries upon your death.

Another way to reduce probate is to give gifts during your lifetime. Anyone can provide individuals with tax-free money in the form of gifts, as defined by the IRS.

At a probate court hearing, the judge will list the responsibilities of the executor of the will, including contacting any beneficiaries and creditors, appraising the deceased's assets and paying any outstanding creditors and taxes.

At the second court hearing, the judge will ensure that all these tasks have been accomplished and close out the estate, so that the transfers of money and other assets in the estate may start.

Each state has specific probate laws to determine what's required. Unless someone has no assets or descendants when they die, probate may still be necessary to settle the deceased's remaining affairs, including debts, assets and paying their final bills and taxes.

While it can be hard to avoid probate court altogether, some ways to avoid probate include creating a living trust, naming beneficiaries clearly on all investment, bank and retirement accounts, and establishing joint ownership for certain assets.

The time for probate varies depending on the deceased person's assets, the complexity of their will and other factors. For instance, the executor may have to liquidate assets to pay creditors, and selling a home or other property for this purpose can take time. However, the average time it takes to complete is about nine months.

After someone dies, the grief over their loss can be all-consuming for their family and friends. Unfortunately, the probate process can add to this a financial and administrative burden. Yet, with or without a will, the probate process is essential to ensure that all of one's affairs are in order before death.

Investopedia (Sep. 21, 2022) “What Is Probate Court?”

What are Biggest Blunders with Health Care Proxies?

A health care proxy, also called a medical power of attorney, is a legal document in which you name a person to make medical decisions, in the event that you are unable to do so for yourself.

Forbes’ recent article entitled, “Health Care Proxies - 5 Biggest Mistakes,” lists the five biggest mistakes people make on this vital document.

No 1: Failing to have one. A study found that two-thirds of us don’t have a health care proxy. If you don’t have one, your doctor may be forced to make decisions in a vacuum. As a result, your wishes may not be respected. Even worse, a court might have to step in to make decisions requiring a guardian’s appointment.

No. 2: Not speaking to those you appoint as your health care agent. This conversation doesn’t have to be complicated or lengthy. However, it’s essential to give your agent some understanding of your feelings and wishes.

No. 3: Not addressing religion If you’ve changed faith , married someone of a different faith, or have children with differing religious views, addressing this in your health care documents and your discussions with your agent is critical. Don’t skip religious considerations because you aren’t religious—that’s also an essential part of this.

No. 4: Not having copies of the health care proxy available. You can put together an envelope and write your name, address, phone number and those of your agents on it. Place a copy of your health insurance info, drug cards and health care proxy in the envelope. If you created and signed a living will and/or a POLST (Physical Order for Life-Sustaining Treatment) that you signed with your doctor, add copies of those to the envelope and a HIPAA release.

No. 5: Failing to address financial matters. Your health care agent most likely won’t have legal rights to pay medical bills, caregiver costs, or other outstanding bills. You should sign a durable power of attorney, a financial document designating a person (called an agent) to handle financial matters for you. Provide your agent with the necessary information, like bank account information.

Reference: Forbes (March 21, 2023) “Health Care Proxies - 5 Biggest Mistakes”