It is not uncommon for Michigan residents to feel reluctant about the prospect of planning for their own deaths, but some financial planners say that estate planning is relevant to everyone. Some people may assume that estate planning is just about creating a will and assigning assets to one's heirs. However, while the process does involve wills and distributing assets, it also lets friends and family know an individual's wishes and can inform people of his or her preferences for medical care in the event of incapacity.
Some of the most essential estate planning documents include a will, a power of attorney and an advanced medical directive. A will establishes who will take care of someone's minor children if neither parent can, and it also states who gets the person's assets. In some cases, a trust may be a good idea as well to help deal with taxes and enable someone to dole out money over a period of time instead of in a lump sum. This is often good when a person wants to leave money to minor children or fund a charity.
A power of attorney gives an individual the right to make financial choices for someone who is not available, and this person is also able to write checks and manage property on the other's behalf. Similar to a power of attorney is an an advanced medical directive, which gives a selected person the ability to make medical decisions such as when someone should be taken off life support.
The issues that estate planning documents deal with are important and need to be handled correctly and thoroughly to avoid complications down the road. An estate planning lawyer could help someone ensure that his or her documents are accurate and help him or her keep them updated to reflect major life changes like remarriage.
Source: Daily Finance, "Documents that should be part of everyone's estate plans", Andrea Murad, September 06, 2013