Myth-busting: What you need to know about wills

Thinking about your Michigan estate planning needs now is an indication that you have assets and/or loved ones, and you care about what happens to them after you die. We at Vandervoort, Christ & Fisher, P.C., have often provided counsel for people who are planning their wills.

Here are some common myths about wills that you should know before you start.

1. You should avoid probate

Probate may be a confusing word, and you may have heard that you want to avoid it. FindLaw explains that your will cannot do this. Even so, it is not as bad as some may have led you to believe. Basically, probate defines the process whereby your debts are reconciled and your assets inventoried and administered to your heirs. If you do not have a will, the court chooses someone to take care of these things. In your will, though, you can choose your own executor, identify your assets and name your beneficiaries. This speeds up the progress of your estate through probate considerably while ensuring that your wishes are honored.

2. All your assets should be included in your will

As you are listing your personal and financial properties and thinking about how to divide them, you may need to move some of them into a different column. This new list includes all your assets that go directly to beneficiaries rather than into your will (and through probate). They include the following:

  • Living trusts
  • Some stocks and bonds
  • Life insurance proceeds
  • Payable-on-death bank accounts
  • Retirement plans
  • Joint property

If you have a number of assets that go directly to beneficiaries, you lower the taxes that come out of your estate, as well.

3. You can provide for a special needs child in your will

You may be particularly concerned about providing for a special needs child. Perhaps counterintuitively, you should not leave your assets to him or her in your will. Most government programs such as Medicare or Medicaid only provide benefits for people who have limited incomes. If your child has significant medical expenses or requires other services, the money you leave may disqualify him or her for assistance, and it may not last long if it has to cover everything. Putting the assets in a special needs trust allows you to ensure that the interest provides for your child while keeping disbursements low enough to retain eligibility for necessary assistance.

More information about wills and trusts is available on our webpage.

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