Simple and Affordable Estate Planning Measures

Contrary to what you may have heard, estate planning doesn’t have to be expensive. Yes — there are pricier planning options out there that involve complicated trusts and documents; but the basics can often be covered in a simple, affordable way. Let’s discuss a few of the most accessible estate planning documents that can have a huge impact on your estate. 

First, we’ll talk about powers of attorney, which help plan for incapacity during your lifetime. Second, we’ll talk about wills and lady bird deeds, which help plan for the transfer of property after your passing. 

1. Durable Power of Attorney (“Financial Power of Attorney”)

A durable power of attorney selects a person, called the “agent”, who can make financial decisions on your behalf. Durable powers of attorney can be drafted to become effective only upon your incapacity, or they can be drafted to be effective immediately, regardless of your capacity. Many times, our clients choose to give their agent the ability to manage the client’s financial affairs as if they were the client themselves, with all the same powers and authority. However, we can draft the document to expand and limit your agent’s power as you would like. 

Durable powers of attorney are an essential part of any good estate plan. Executing a durable power of attorney often avoids the need for a conservatorship proceeding in the probate court in the event you become incapacitated since you’ve already chosen who will be able to act on your behalf with regard to your finances and in what capacity. Fortunately, these documents are low on cost but huge on impact. 

2. Patient Advocate Designation (“Medical Power of Attorney”)

A patient advocate designation selects a person, called the “patient advocate”, who will step in and make medical decisions on your behalf only when you become incapable of making medical decisions for yourself. Patient advocate designations drafted by our firm include a Living Will within the document. A Living Will is an advanced directive that allows you to outline your end-of-life medical wishes for their patient advocate. 

Like the durable power of attorney, patient advocate designations are a critical piece of estate planning. The creation of a patient advocate designation often avoids the need for a guardianship proceeding in the probate court in the event you become incapacitated since you’ve already chosen who will be able to act on your behalf with regard to your wellbeing and in what capacity. The patient advocate designation offers significant benefits at an affordable cost. 

3. Last Will and Testament

A will allows you to decide who will administer your estate, who will care for your minor children, if any, and how your property should be distributed after your passing. Any property passed by will must be done through the probate court system, which is a special court system set up to handle estates, among other things. 

Wills are a good “get-the-job-done” option for passing along property to family members, and they are often contrasted against trusts. Generally, wills are less expensive to create than trusts, and they do not require any maintenance during your lifetime. On the other hand, wills have a number of disadvantages, including that they (1) involve public post-death court proceedings (2) place the burden of administering your estate on your family, (3) delay when your beneficiaries will receive their inheritance, (4) often cost more than trusts in the long run since probate court administration requires paying court fees and hiring an attorney, (5) offer you less control over the property you leave to your beneficiaries, and (6) offer less protection for your beneficiaries. 

However, if our goal is simplicity and affordability, perhaps a will is a viable option to consider for passing on property. 

4. Lady Bird Deed

A lady bird deed allows you to transfer your real estate to your designated beneficiary or designated beneficiaries upon your death. The transfer only happens upon your death, and, during your lifetime, you retain full control and rights in the property, including the ability to sell, gift, mortgage, convey, or do anything else you would like with the real estate. Lady bird deeds are only recognized in a handful of states, including Michigan. 

Many planners use lady bird deeds to avoid probate, either transferring their real estate into their trust upon their death or directly to their beneficiaries upon their death. Because lady bird deeds are relatively inexpensive and completely avoid probate (including probate costs!), they pay for themselves right out of the gate. At our firm, we often use lady bird deeds regardless of the plan — whether we’re using a will, a trust, or something else to transfer property.

If you’re considering creating or updating your estate plan, call Kimball & Wells for help. Our firm specializes in estate planning, and we pride ourselves on creating lasting, meaningful relationships with our clients. We are located in Grand Rapids, and we offer a free consultation to discuss how best to achieve your goals. We’ll advise you on the best and most cost-effective means to make sure you and your family are cared for. To get started, call us at (616) 317-8489 or click the “Contact Us” link on our website.

Wyatt Wells
Kimball & Wells, PLLC
Wyatt@kimballwells.com
(616) 317-8489