Scott & Huff, P.C.

1000 S. Garfield Ave.
Suite 3
Traverse City, MI 49686
(231) 933-5322

What Do I Do To Evaluate My Present Situation?

Planning for the disposition of your estate and the present and future needs of your family requires you to:

First: Identify what your objectives are and how you order them in priority

Second: Understand that in estate planning as in mathematics, it is impossible to maximize for more than one variable at a time. For most folks decisions must be made which are the closest compromise available between several competing objectives.

Third: Identify what assets and liabilities you presently have and to what extent over time you expect them to diminish or grow.

Fourth: Identify who you wish to perform the following functions:

1.Personal Representative- the personal representative is the current name for what used to be called the Executor. This person is appointed by the Probate Court upon nomination by the decedent in the will or if there is no will by a member of the family. The personal representative is tasked with the duties of marshalling the assets of the decedent, approving or disapproving claims against the estate, seeing to the payment of appropriate claims, attending to the payment of expenses of administration, determinations as to family allowances and exempt property, attending to estate and income tax elections, returns, and payments and distributions of the estate to beneficiaries.

2.Trustee - one thinks of a personal representative as functioning at and after death of the deceased for a relatively short period of time and with the limited purposes of wrapping up the affairs of the decedent and distributing his or her property to the creditors, taxing authorities, and beneficiaries. The trustee operates or may operate over a longer time frame if the trust is funding during the lifetime of the Settlor [or the creator of the Trust] then the Trustee manages the assets for the benefit of the Settlor and the Settlor's family. You cannot, for obvious reasons, be your own personal representative, but you can certainly can be, during your lifetime, your own trustee. Upon your death, disability, or resignation, a co-trustee or successor trustee takes over. This can be a family member or professional fiduciary, that is a bank with trust powers or more rarely a professional trustee that is an individual. Corporations that are not banks with trust powers may not act as a trustee. The trustee, upon the death of the Settlor, performs many of the same duties as the personal representative, especially if no personal representative is appointed. Additionally the trustee makes allocations of the trust estate into various subtrusts and thereafter manages the same for the benefit of the beneficiaries of the trust(s) until the trusts terminate. Trustees may be designated that succeed other trustees who die, resign, or become disabled.

3.Attorney-in-fact- in the context that we usually use this term, an attorney-in-fact is simply an agent of the person (the principal) appointing him or her for the purpose of transacting business for the principal. Usually we create what are called "Durable Powers of Attorney". Under the common law a grant of a power of attorney terminated automatically on the incompetence of the principal. A durable power of attorney is a grant of authority which transcends the incompetence of the principal. The agent can keep on functioning until he or she knows of the death of the principal. The virtue of this type of durable power of attorney is that there needs to be no court determination that the principal is incompetent. Another type of durable power of attorney only becomes effective upon the principal becoming incompetent. This type power of attorney is of only limited usefulness.

4.Patient Advocate- As of 1991 Michigan law has recognized your right to appoint another as your agent or proxy to make health care decisions for you if you are unable to make them yourself. The person you appoint is referred to as your Patient Advocate. The document which appoints that person is known as a Patient Advocate Designation. It is also possible to give that person guidance in making his or her decisions as to your healthcare in what is usually referred to as a living will. We combine both of these documents. The functions of a patient advocate and the document that appoints him or her are very specific to the Michigan statute. Earlier documents or documents from other states may be ineffective in Michigan.

5.Guardian of your children - By will you may nominate a person to take charge of the care and custody of your minor children in the event that you die before they attain adulthood. The Guardian is then appointed by the Probate Court after your death and is responsible to the Court for those children. This person can also receive up to $5,000.00 per year without the necessity of filing an accounting. If you have an adult child or spouse that is legally incapacitated, it is also possible to appoint by will a guardian for such person.

6.Conservator of the estate of your children - What the guardian is to your child's person, the conservator is to the child's estate. The conservator is also appointed by the Probate court and is responsible to it. Annual accounts must be filed with the court and allowed.