Michigan Estate Planning Blog

How Dying Without a Will Leaves Heirs an Extra Dose of Grief

 

Don’t delay having a will prepared by an experienced estate planning attorney, warns a frank article from Barron’s, “What Happens if You Die Without a Will? You Could Leave Heirs—and Pets—With Even More Grief.”

If you die without a will, a probate court will name heirs to receive assets and guardians to raise children. However, no one will be required to protect your pets. In worst-case scenarios, assets with no designated beneficiaries, including bank accounts, real estate property and retirement accounts, can end up in the state’s unclaimed property department.

If you’d rather choose who will be your heir, assign a person you know and trust to raise your children and want to ensure that your beloved animal companions live comfortably after you’ve passed, then you need a will.

A family member embarking on a search to identify property might be able to glean some information from the prior year’s tax returns. They’ll still first have to find the tax returns and then go to court to be appointed administrator of your estate. If you have digital assets, including cryptocurrency, and haven’t made a plan for someone to take control and manage those assets, your family may never see those assets.

Having assets titled with preferred beneficiaries is as important as having a will. Retirement accounts with named beneficiaries, including 401(k)s, supersede directions in a will. If most of your wealth is in a 401(k) or other accounts with the ability to name a beneficiary, make sure that those names are correct.

In community property states like California, spouses are entitled to community property, and asset distribution follows state law.

If you have children, and especially if they are still minors, you want to have a will to explicitly state who you want to raise your children if both parents die. While other family members can petition the court for guardianship, your children could become the center of a family blowup if more than one person wants to take custody.

If you care about what will happen to your pet, you must also plan for them. Even the most well-intentioned family member isn’t required to take your pet into their home. Shelters have many senior dogs and cats left behind when their owners die and are less likely to be adopted than kittens or puppies. Most states allow you to create a pet trust, where you set aside funds for the care of your pet and name a person to be the pet’s guardian and another person to be in charge of the trust. You can name the guardian to be the same person as the trustee, or you can keep the roles separate.

Unless you want to create a maelstrom for your family and let other people make important, life-altering decisions for those you love, schedule a meeting with an estate planning attorney to review your estate and create a will, along with other necessary estate planning documents.

Reference: Barron’s (Dec. 6, 2024) “What Happens if You Die Without a Will? You Could Leave Heirs—and Pets—With Even More Grief”

What Is the Biggest Mistake People Make on Their Wills?

 

Making mistakes in your estate planning can torpedo every effort made to protect your family after you die, warns a recent article from Kiplinger, “Common Estate Planning Mistakes.” Everyone benefits from a professionally-made comprehensive estate plan, a process for preparing your legal and financial affairs so assets and possessions are passed on after your death to the people or charities you want.

Not having an estate plan can create a world of trouble for those you love. The biggest estate planning mistake of all is not having an estate plan. After that, there are several others.

Procrastination. Suppose you unexpectedly become incapacitated and don’t have an estate plan. In that case, your family will be left guessing what you would want your medical care to be, in addition to needing to go to court to apply for guardianship so they can pay your bills and keep your household running. Everyone should have documents like Health Care Power of Attorney, Power of Attorney, HIPAA Release Form and Living Will in place.

Trying to make an estate plan on your own. Unless you’re an experienced estate planning attorney, there’s a lot you could leave out if you attempt a DIY estate plan. If there are errors, a court could declare your will invalid and it’s as if you never had a will in the first place. The laws of your state will be used to distribute your assets. It may not be what you had in mind.

Keeping estate planning documents in a safe or safe deposit box. Documents need to be where someone can get them in an emergency or after your passing. Safety deposit boxes are often sealed on the death of the owner. Give copies of your estate plan to your appointed executor or trustee, a trusted family member and your estate planning attorney.

Missing key documents. If your estate plan lacks key documents, your heirs might find themselves battling over the estate. Make sure your estate plan includes these documents:

Last will and testament—This document outlines all final wishes and instructions for distributing your assets and how you want your affairs managed after you die. It also is used to name a guardian for minor children and an executor to oversee the instructions in the will.

Beneficiary designations—Any account allowing for beneficiaries, including IRAs, pension plans, investment accounts and insurance policies, will pass directly to named beneficiaries. Be sure that these are up to date.

Durable power of attorney for medical care—Allows another person to make medical decisions for you if you become incapacitated. Depending on your jurisdiction, it may include an advanced healthcare directive, which gives your instructions on whether or not to use life support.

Funeral instructions—Do you want a traditional burial? Cremation? Tell your family your wishes for a funeral or memorial service.

Proof of identity—Your Social Security card, birth certificate, marriage and/or divorce certificate and any prenuptial agreements will be needed for administering the estate.

Deeds or loan documents for large assets—Collect paperwork for homes, boats and other big assets.

Digital assets. These include websites, cloud storage, social media accounts and cryptocurrency, to name a few. By assigning a digital fiduciary and sharing key information, you help heirs avoid identity theft and lost assets.

Failing to update your plan. Your estate plan needs to reflect the changes in your life. If your estate plan is outdated, you may unintentionally disinherit beneficiaries.

Appointing the wrong person as executor or trustee. If your eldest child is a disaster with money management, don’t name them your executor. Consider a trusted person who is unbiased and able to manage money and family dynamics and talk with them about taking on this role before appointing them to this critical role.

Reference: Kiplinger (Dec. 30, 2023) “Common Estate Planning Mistakes”

Why Does Everyone Need an Estate Plan?

Twenty and thirty-year olds are busy building their lives, starting or growing careers, exploring personal goals, repaying student loans and maybe starting a family. They’re young and healthy and think nothing can happen to them—but that’s not true. A recent article from Kiplinger titled “You’re Not Too Young for an Estate Plan: 7 Essentials for Your 20s and 30s” explains why even a twenty-year old with student loans needs an estate plan.

Student loans. Federal student loans discharge upon death, so no further payments are needed, including any federal Parent PLUS loans parents may have taken out. However, for private student loans, the decision is up to the lender. If the private loan was taken out by the student, the institution may forgive the loan. However, if a parent or another adult co-signed the loan, they might be responsible for paying the entire loan. The exception: if the loan was made after November 20, 2018, the co-signer may be protected by the Economic Growth, Regulatory Relief and Consumer Protection Act. If you took out loans after getting married, the surviving spouse is likely to be required to pay the loan if they co-signed the loan or if you live in a community property state.

 

Health Care Directive and Health Care Power of Attorney. The Health Care Directive is used to tell your family what you would want if you were near death, whether by injury or illness. Healthcare providers are obligated to follow your directions if they are stated in this document. Without it, you could be kept on life support for many years, regardless of what your family wants.

 

A Health Care Power of Attorney is used to name someone you trust to act as your “agent,” if you become incapacitated. This document is focused on your care and medical treatments. It also lets your agent speak with your health insurance company, obtain access to medical records and discuss your care with healthcare providers.

 

Last Will and Testament. This document isn’t just for people with homes, families, and retirement accounts. Young people have property too—your car, your personal possessions, and whatever financial resources you may have accumulated. If you have a will, you can direct who you want to receive what you own. Without one, the court will decide who gets your possessions and your family won’t have any say about it. With a will, you can determine who receives your property, including your digital assets. You’ll also name an executor in the will—the person who is in charge of distributing your property. An estate planning attorney will create a document to comply with your state’s laws. It doesn’t have to be a complicated document, but it is a good way to ensure your loved ones know your wishes.

 

Retirement Accounts and Beneficiaries. These accounts may not be as robust as they will be later in your life. However, they are still yours. Make sure that you have named beneficiaries who you want to receive them if you die. Singles may name a sibling, parents, partner, or another family member to receive these assets.

 

Digital Assets. A digital life means you need a digital estate plan. Creating an inventory list of all of your digital accounts, usernames and passwords. If an account has two-factor authentication, indicate how another person might gain access to the account. Don’t include any of this information in your will, as it becomes a public document after being submitted to the court for probate. Tell a trusted family member where the inventory is located. If you own cryptocurrency, research how crypto assets are passed if the original owner dies.

 

Guardianship. Your will is used to name a guardian for minor children. Without it, the court will appoint a guardian, and it may not be the family member you wish it would be.

 

Don’t Forget Your Furry Friends. You can add a pet guardianship clause to a will to ensure that your pet stays with a trusted friend or family member who has agreed to care for your pet. You can also set up a pet trust to set aside funds for your pet’s care, including food, veterinary visits, toys, training and treats.

 

Reference: Kiplinger (Aug. 22, 2022) “You’re Not Too Young for an Estate Plan: 7 Essentials for Your 20s and 30s”

Your Digital Life – Will It Outlast You?

Most people today have numerous online accounts. They have email accounts for work and personal use. They have accounts on sites like Facebook and Twitter. Some people also have blogs or even their own websites. If you check the privacy policies on the sites where you have accounts, you will notice that most sites will not give out any information about your accounts without your prior permission and some will not give out information without a court order. As a recent New York Times article, “How to Digitally Avoid Taking It to the Grave,” points out, if you do not plan ahead regarding how someone else can access your accounts after you pass away, then you risk the loss of those accounts. In other cases, accounts you would want to carry on might disappear. It depends on the policies of the sites where you have accounts. Some states have passed laws granting executors access to digital accounts after the owners pass away, and there is an effort underway to pass a uniform law in every state. However, until the law catches up with today's current digital environment, you need to have a plan. At a minimum, you should make sure that a list exists of your digital accounts. You should make sure someone will be able to find the passwords for those accounts. You also need to store that information somewhere it can be found by someone you trust. This could be done by including that information in your will, but that could make updating the digital information cumbersome. You could also give that information to a trusted individual before you pass away. You do not need to tell them now what your passwords are. You just need to tell them where to find the information. Reference: New York Times (July
2, 2014) “How
to Digitally Avoid Taking It to the Grave"

For more information, see www.jerryreiflawyer.com

So, Have You Prepared Your Digital Estate Plan? Mid-Michigan

If you have an estate plan, chances are quite good you made specific arrangements for assets like your home, life insurance, retirement funds and perhaps even a business interest. What about your “digital assets”? Have you made proper arrangements for them? The problem of the digital estate is an entirely 21st century problem. Thankfully, more information is coming to light about the consequences of failing to make plans for digital assets. If this is a new subject matter for you, then you will want to read a recent MarketWatch article titled “Who gets your digital fortune when you die?” Basically, your digital “fortune” includes all of those digital assets that make up your digital presence. There are the social and practical ones, like e-mail accounts, Facebook accounts, and whatnot. From there your digital estate may include assets with real monetary value, like PayPal or eBay accounts, investment accounts, full bank accounts, and maybe an online-only bank account or two. While we are at it, remember the accounts that represent your ownership of digital “goods,” to include that massive Kindle library or an iTunes account. What happens to these? Without proper planning, your digital assets can easily become loose ends, losses and even liabilities. Unless you leave instructions behind, how will your heirs inherit your digital estate (let alone know it even exists)? There is no time like the present to get your digital ducks in a row.

So, Have You Prepared Your Digital Estate Plan? Saginaw, Michigan

If you have an estate plan, chances are quite good you made specific arrangements for assets like your home, life insurance, retirement funds and perhaps even a business interest. What about your “digital assets”? Have you made proper arrangements for them? The problem of the digital estate is an entirely 21st century problem. Thankfully, more information is coming to light about the consequences of failing to make plans for digital assets. If this is a new subject matter for you, then you will want to read a recent MarketWatch article titled “Who gets your digital fortune when you die?” Basically, your digital “fortune” includes all of those digital assets that make up your digital presence. There are the social and practical ones, like e-mail accounts, Facebook accounts, and whatnot. From there your digital estate may include assets with real monetary value, like PayPal or eBay accounts, investment accounts, full bank accounts, and maybe an online-only bank account or two. While we are at it, remember the accounts that represent your ownership of digital “goods,” to include that massive Kindle library or an iTunes account. What happens to these? Without proper planning, your digital assets can easily become loose ends, losses and even liabilities. Unless you leave instructions behind, how will your heirs inherit your digital estate (let alone know it even exists)? There is no time like the present to get your digital ducks in a row.

 Reference: MarketWatch (January 10, 2014) “Who gets your digital fortune when you die?”

For more information, see www.jerryreiflawyer.com

Will Your E-mail Accounts Die With You? Mid-Michigan

The law is not known for moving at a terribly relevant pace, especially in the digital age. So, if you are unfamiliar with the notion of a digital estate, think about your online bank accounts, emails, social media and your entire digital presence on the web. Question: what happens to your digital life when your temporal life is ended? This is a question in need of an answer sooner rather than later. Imagine a world without you in which your heirs cannot access your digital assets. They cannot access your e-mails, either practically or legally, to get to important legal or financial information, whether about bank accounts or friends. Sadly, that is the reality in most scenarios today. The dilemma of the digital estate and the difficulties facing heirs was taken up by Forbes in a recent article titled “When Heirs Must Battle For Access To E-mail Accounts.” The conflict between the digital and the legal is very real. For example, consider the case of the Ajemian family. The Forbes article reviews four aspects of this complex, but important area of estate planning: 1. Beneficiaries for your e-mail. 2. Shared passwords. 3. Account hijackers. 4. Legal tangles. In one sense, you want your heirs to access all the digital information you and they may need when actually needed. On the other hand, do you want to give them access to every e-mail? Whatever digital information you have and whether you want to make such information available to your heirs is solely your call. The key is to think through this important area of your estate planning and to plan accordingly in this digital age.

Reference: Forbes (December 11, 2013) “When Heirs Must Battle For Access To E-mail Accounts”

For more information, see www.jerryreiflawyer.com

Estate Planning For Your Digital Estate Saginaw, MI

Our lives are ever more wired. We have devices, passwords, and bits of data coming to define us in ways both personal and financial. It would seem that there should be clearly defined legal steps to take for the management of our digital estates in the event of incapacity or death. Unfortunately, such legal steps are elusive, at best. Since it would seem only logical (let alone practical) to make legal plans for the management and succession of our digital estates, what is one to do without a clearly defined body of law on the subject? There is a patchwork of laws in some places, and some services have thought ahead to help those planning their estates. Nevertheless, the burden inevitably falls on the planners and their loved ones to really come to terms with those important digital assets, whether personal (a Facebook account) or downright valuable (a bank account or even a registered domain name). The first step in planning your digital estate is to recognize the need. Thereafter, consider the following four step process outlined in a recent Morningstar article aptly titled “Do You Have a Plan for Your Digital 'Estate'?”: 1. Do a fire drill: if you lose your electronic assets, or if someone takes them away, or if a loved one can never lose them again (and so on and so forth), then what is lost? What would I want a loved one to have access to? 2. Take an inventory: list it out, [securely] document the passwords, and make your heirs aware of your inventory. 3. Back it up: create a backup of any digital assets you can, whether cloud based, locally stored, or otherwise. 4. Put your plan into writing: if it is not written down and available then it is not a plan at all, but rather a hope, and all the more so with digital assets that do not have common law precedents to guide your heirs.

Reference: Morningstar (October 3, 2013) “Do You Have a Plan for Your Digital 'Estate'?”

For more information, see www.jerryreiflawyer.com

 

Planning for Your Digital Assets Saginaw, MI

Back in the day, there were checkbooks, stock and bond certificates and hardcopy statements showing your dividends and interest. Then again, there were only a handful of television viewing options, a test pattern at the end of the broadcast day and the youngest sibling was the “remote control” to change channels. Now, most of life is digital, to include your estate. What planning have you done for your digital assets? Would your love ones be able to navigate the system of digital accounts, portals and passwords when needed? The conundrum of how to understand and plan for the maintenance of a digital life is not new, but it is growing. Everyone – people of all walks of life – has some tie to the internet and most have something worth protecting there. Much can be said about Facebook accounts for their social value and the sentimental value of pictures hosted there, but there is far more to it. A recent article in The New York Times titled “Leaving Behind the Digital Keys to Financial Lives” picked up on this theme since we do most of our banking and investing online. If you go to the effort to document your legal wishes in an estate plan for the control and management for your estate, then they at least need to know the “what” and the “where” regarding the estate to control and manage. Unfortunately, digital accounts have few paper trails by their very nature and passwords may change every week. Simply put, you have to plan to hand over the keys to your digital estate and that often can take more diligence than planning for the keys of the family home. As helpfully summed up over in the original article: People needed to think about five things to ensure that everything goes smoothly with their digital financial lives if they become incapacitated or die: they need to maintain a list of their digital information; send the information to someone they trust; make sure other people know who has the information; leave instructions for how everything should be handled; and note all of this in an estate plan and update it regularly.

Reference: The New York Times (May 24, 2013) “Leaving Behind the Digital Keys to Financial Lives”

For more information, see www.jerryreiflawyer.com

 

Even Geeks Confounded With How To Manage Post-Mortem Digital Assets Saginaw, MI

As our daily lives ascend ever higher into technological progress, the practical problems associated with how to manage and even transfer that technology increases. To the extent you have a “digital life,” what arrangements have you made for your “digital afterlife,” let alone the future of your digital assets? How do you plan for that? Digital estate planning is a hot topic, especially for today’s “connected” generations. Regardless whether they can remember life before the microchip, Americans now live a significant part of their lives digitally. Not only is this new life overwhelming for end-users, but the very architects of our digital world are confounded with the intersection of digital life and death. A recent article in ScienceNews titled “Computer scientists grapple with how to manage the digital legacy of the departed,” considers the issues confronted by computer scientists with Congress not far behind. When it comes to estate planning for your digital assets there are a few tools like the “inactive account manager” from Google. Overall, however, the field is simply too new. Fortunately, the key to planning for your digital assets really is not – legally – all that different from planning for your non-digital assets. A good start is listing all of your digital accounts and passwords, then making sure the agents and fiduciaries over your estate plan can access them when needed.

Reference: ScienceNews (June 10, 2013) “Computer scientists grapple with how to manage the digital legacy of the departed”

For more information, see www.jerryreiflawyer.com

 

Related articles

Digital Assets Should Be Included in a Complete Estate Plan

Planning for Your Virtual Estate Assets Saginaw, Michigan

We live our lives today on the internet and in the cloud in ever more pervasive ways. This should not come as a surprise. After all, most of us walk around with the internet in our pocket 24/7 (and soon we may wear it as headgear, for those watching Google glasses with interest). What happens to our virtual life when our physical life is over? What happens to everything on the cloud when you die? From your personal information to Facebook accounts to iTunes collections, so much of it exists online. Until recently, there have been few solutions to the meticulous record keeping to keep everything straight, let alone remembered. Recently, The Wall Street Journal reported in an article titled “Google Lets Users Plan ‘Digital Afterlife’ By Naming Heirs” that Google has become amongst the first and likely the largest company to offer users a proactive digital-estate planning tool - the “Inactive Account Manager.” The important take-a-way is the importance of the planning. What about your other accounts and bits of data snaking across the web? What plans have you made to document your virtual life into the afterlife?

Reference: The Wall Street
Journal (April 11, 2013) “Google Lets Users Plan ‘Digital Afterlife’
By Naming Heirs”

For more information, see www.jerryreiflawyer.com

 

 

Planning for Your Virtual Estate Assets Saginaw, Michigan

We live our lives today on the internet and in the cloud in ever more pervasive ways. This should not come as a surprise. After all, most of us walk around with the internet in our pocket 24/7 (and soon we may wear it as headgear, for those watching Google glasses with interest). What happens to our virtual life when our physical life is over? What happens to everything on the cloud when you die? From your personal information to Facebook accounts to iTunes collections, so much of it exists online. Until recently, there have been few solutions to the meticulous record keeping to keep everything straight, let alone remembered. Recently, The Wall Street Journal reported in an article titled “Google Lets Users Plan ‘Digital Afterlife’ By Naming Heirs” that Google has become amongst the first and likely the largest company to offer users a proactive digital-estate planning tool - the “Inactive Account Manager.” The important take-a-way is the importance of the planning. What about your other accounts and bits of data snaking across the web? What plans have you made to document your virtual life into the afterlife?

Reference: The Wall Street
Journal (April 11, 2013) “Google Lets Users Plan ‘Digital Afterlife’
By Naming Heirs”

For more information, see www.jerryreiflawyer.com