When’s the Right Time to Start Estate Planning?

Picture a young person’s 18th birthday, a couple welcoming their first child, having a life-changing disability, or a retiree downsizing after decades in the same home. Each of these moments can spark one big question: “What happens to this asset/person if something happens to me?” Estate planning answers that question by putting your wishes in writing.   Without these documents, your family and assets are subjected to the default rules in the law (intestate succession).  These defaults are in place to get probate matters settled quickly, efficiently, and off the judge’s docket.  They serve their purpose but do not leave room for your circumstances, your family’s needs, or the legacy you wish to leave.

At Bassett Murray Law Group, PLLC, we have spent more than 30 years guiding families through this process, helping them sleep better at night. You do not need to be wealthy or elderly to benefit; you need the desire to protect yourself and the people and property you care about.

Why Estate Planning Matters

Estate planning is the act of deciding today how property, money, and health decisions will be handled if you cannot speak for yourself tomorrow. A solid plan can cover everything from who pays your mortgage if you are hospitalized to who receives the lake cabin after you pass away.

Customized key documents often include:

• Last will and testament
• Revocable or irrevocable living trust
• Power of attorney for property and healthcare
• Beneficiary designations for life insurance, retirement accounts, and transfer-on-death deeds

Using these tools often prevents family conflict, limits court involvement, and brings peace of mind long before they are ever needed.

Key Considerations for Michigan Residents

Before drafting any papers, Michigan residents should be aware of a few key rules. Michigan follows common law property principles, so what you own in your name alone remains yours unless a judge orders otherwise. If you die without a will, the laws of intestate succession determine how your assets will be distributed, regardless of anyone’s wishes.

Michigan does not have an estate tax; however, the IRS imposes an estate tax on the value of assets exceeding the Unified Estate and Gift Tax exemption.  Currently, that exemption is $13.99 million and doubles for a married couple. Most people do not have to worry about estate taxes, but if you do, the tax is very significant.  It starts at 18% and tops out at 40% based on the dollar value being taxed.  Thoughtful planning can help reduce, delay, or even avoid that bill, but only if action is taken before death.

Life Stages and Estate Planning Triggers

Certain milestones almost beg for an estate review. Below are common stages and recommended steps.

Young Adulthood

Turning 18 means that parents can no longer access medical records or bank accounts without the individual’s permission. Create simple financial and medical powers of attorney so someone you trust can step in if an accident occurs. Providing a medical release (HIPAA release) and an educational release will allow a parent or trusted individual to stay informed and help prevent a young adult’s education, financial aid, and medical decisions from going off the rails.  A will may not be necessary in the event of death, but even a modest account can be administered more smoothly with one or more named beneficiaries.

Starting a Family

Children change everything. Michigan parents often use wills to name guardians.  Some wills also include testamentary trusts.  This type of trust does not avoid probate.  In fact, probate is necessary to create the trust.  It does not have all of the features of a revocable trust, and it does not provide the flexibility that a revocable trust has to offer.  It is, however, an economical way for healthy parents of limited means to plan for managing an inheritance in the event of an unexpected tragedy.  The assets can be held in trust and distributed when their children reach adulthood.

Buying a House

A house is a big investment.  You have worked hard to purchase the house, and you want to be able to pass it on in the event of your death.  While you are able to put beneficiaries on investment accounts and life insurance by filling out a form, the process of putting “beneficiaries” on your real estate is a bit more complicated.  A ladybird deed can be used to name a remainderman who, like a beneficiary, would receive title to your real estate at your death without having to go through probate court.

Marriage and Divorce

Marriage and estate planning can be very complicated.  Upon marriage, your spouse becomes one of your heirs.  On the other hand, if you have children or if you have no children but living parents, your spouse does not automatically receive all of your assets upon your death.  Your spouse may have legal rights, such as the right to inherit your 401k plan, or being able to “elect against the will” to take a large share of a probate estate.  When divorcing, certain designations in estate planning documents and some beneficiary designations naming your spouse will be automatically revoked.  If you want to keep those designations in place, you will need to redo your documents and sign them after the date of the divorce.

Likewise, the marriage or divorce of someone named in your estate planning documents may affect your plan.  A new in-law may overly influence your patient advocate in a way that makes you uncomfortable.  A beneficiary in your trust may have a marriage that is on the verge of dissolving.

Other Family Matters

The life circumstances of the people listed in your estate plan must also be considered. Births, deaths, and disabilities involving anyone named in your estate plan should trigger re-evaluation of your planning.  Is one of your beneficiaries now relying on governmental benefits due to a disability? If your nominated patient advocate has a new baby, is that person going to have the time to devote to helping you if you need it?  Did your agent, under a power of attorney, move outside of the United States, and is that going to affect their ability to carry out their duties?  Is the person you named as successor trustee aging to a point where they are no longer going to be capable of doing the tasks required – now or in 5 years?  Life changes quickly, for you and for the people you rely on.  Reviewing your documents periodically will protect your planning.

Wealth and Acquiring Assets

A significant increase or decrease in wealth can affect the way you want your assets managed and distributed.

Wealth can increase by having a great business idea, an inheritance, or just smart asset management.  An increase in wealth means more assets to distribute, opportunities to make charitable donations, and greater responsibility for the people receiving larger gifts.  You want to make sure that the wealth you have accumulated is used to make your beneficiaries’ lives better, not riskier or more stressful. Reasoning through your distribution plan and asset management from the perspective of your beneficiaries is part of successful planning.

A drop in wealth calls for a re-evaluation of the distribution plan in your documents, especially if you had anticipated enough assets to make gifts to a large pool of beneficiaries or charities.  Long-term care costs, a shift in the market, and simply dipping into savings by living longer can all cause asset levels to drop.  These events warrant a review of your estate plan to ensure it still makes sense.

Approaching Retirement

Retirement can spark questions about long-term care, charitable giving, and financial planning. It is the perfect time to double-check that every account, deed, and policy points to the right person or to your trust.

Key Components of a Michigan Estate Plan

Below is a closer look at the papers that form a comprehensive plan.

Wills

A Michigan will directs who receives property in a probate estate, allows you to name a personal representative (executor), lets parents choose guardians, and allows you to name a funeral representative.  The maker must be at least 18 years old, mentally competent, and sign before two witnesses who are not beneficiaries or related to the maker. Handwritten wills without witnesses are sometimes upheld in court, but can be misinterpreted and not get you what you want.

Trusts

A trust allows you to transfer assets into a separate legal entity managed by a trustee you have selected and contains instructions for distribution to your designated beneficiaries. In a revocable trust, you retain control while alive and can modify the terms at any time. An irrevocable trust locks in terms, often used for asset protection or tax reduction.

Powers of Attorney

Michigan allows you to name an agent to manage your assets for you under a power of attorney.  The document is “durable” if it continues to be in force even if you become incapacitated.  The powers can be effective when you sign them or at a later date, such as when you become incapacitated.  A healthcare power of attorney allows your designated person to make your medical decisions when you are no longer able to do that for yourself.  Both medical and financial powers of attorney terminate upon your death.

Beneficiary Designations

Financial institutions and insurance carriers honor the latest beneficiary designation form they have on file from you, even if your will makes a different designation.  Review these forms regularly, especially after marriage, birth, death of a beneficiary, or divorce, to ensure accuracy and completeness.

Table 1: Major Life Events and Suggested Estate Planning Actions

Life Event	Primary Document to Review or Create
Turning 18	Financial & Healthcare POA; Release for Medical and Educational Information; Will, Trust or Beneficiary Designations
Marriage	Will, Trust or Beneficiary Designations; Joint Ownership, Power of Attorney for Financial and Healthcare Matters
Birth of a Child	Will (Guardianship);  Trust; Review Beneficiary Designations
Disability	Review for Medicaid Lookback Trust; Review Trust Distributions; Review Beneficiary Designations; Review Powers of Attorney
Home Purchase	Deed into Trust or Ladybird Deed
Approaching Retirement	Long-Term Care Plan; Review of Powers of Attorney; Trust and Trust Funding Review; Charity Support through Tax Exempt Assets

When to Review and Revise Your Estate Plan

An estate plan is more like a garden than a monument. It needs attention to stay healthy. Review every three to five years, or sooner if any of the following occur:

1. Marriage or divorce by you or anyone named in your documents.
2. Birth or adoption of a child or grandchild by you or anyone named in your documents.
3. Significant health diagnosis or disability for you or anyone named in your documents.
4. The death of anyone named in your documents.
5. Increase in wealth with a job change, business sale, large inheritance, market gains, etc.
6. A drop in wealth or a large increase in your monthly expenses, such as long-term care costs.
7. Relocation to another state
8. Purchase of new real estate, in Michigan or out-of-state.

Even if none of these events happen, changing tax laws may still warrant a quick check-in.

Take Action for Your Future

Waiting rarely makes estate planning easier. A few hours of preparation today can spare your family months of court paperwork later. Working with a knowledgeable attorney helps you match Michigan rules with your personal goals.

If you have questions or need a fresh review of existing documents, please call us at 734-930-9200 or 231-427-2292 or reach out through our Contact Us page. Bassett Murray Law Group, PLLC, is dedicated to creating plans that align with real lives and provide lasting peace of mind.