Difficulties with estate planning
Estate planning is a commonly overlooked tool that can give you peace of mind and help your children after your passing. Parents want what is best for their children: to live happily, healthily, and hopefully to be more successful than their parents before them. Sometimes, however, you might understand that your child is not the most prudent saver or frugal spender, and you may worry what your child will do with your estate when you are gone. You are far from alone, and that is not a reflection of you or your child: some children, even adult children, are not prepared for the responsibility of suddenly coming into a great deal of assets. Luckily, there are several ways your estate plan can be tailored to anticipate and prepare for your children until they can be relied upon to handle your estate assets with maturity and care.
What are my options?
One method you may be familiar with is the creation of a trust. Creating a trust can be done as a part of your estate plan. You will be able to deposit assets into the trust during your lifetime, which can include not only money but homes, bank and other financial accounts, and even other assets such as personal property. You can also choose trusted individuals such as family or friends to serve as one or more trustees, to manage your trust assets if you pass away or become incapacitated. Those trust assets are also safe from a beneficiary’s creditors, lawsuits, irresponsible spending, and any current or former spouses and loved ones who may be inclined to try to influence their use of those assets. Trust assets can also be distributed to your children according to regular installments every year, every five years, or whatever you decide is reasonable, giving you a great deal of control and protecting your assets from misuse.
Another method of protecting your assets is through the use of lady bird deeds. Otherwise known as an enhanced life estate deed, a lady bird deed allows you to transfer real estate property to someone outside of probate while retaining a life estate in the property. What this means is that it remains yours for your lifetime, and upon your passing, it will be automatically transferred to your child, but outside of probate. The fact that the property will only be transferred upon your death means buying some time for your child to mature and hopefully grow into a more responsible and thriftier adult.
And if none of these options are appealing…
If worst really does come to worst, you can disinherit your child within your estate plan. You can include language in your will specifically disinheriting one or more children from part or all of their share of your estate. Due to a recent Michigan case however, your children may still be entitled to what is known as exempt property, so your attorney might also assist you in crafting language for your will that directly addresses this law.
People change, and children do grow up. However, if you worry that your children are simply not ready for the responsibility of inheriting your life’s work, speak to an attorney about your estate planning options. Contact us for a free consultation to see how we can help you.
Contact us today to start planning: 248.399.3300 or Info@TheProbatePro.com.