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The Year of Change and Unknowns

Important considerations for your estate plan

November 16, 2020

There’s no question that the year has brought much change. With that change comes many unknowns. Whether you are still planning to travel for the holidays or simply looking forward to 2021, reflecting on your existing estate plan and making any necessary changes can help you gain control of what you can. In addition, if creating an estate plan has been on your long-term goal, there’s no better time than the present to do so.

Below are a few scenarios to consider as we head into the winter months:

Adults Only! If you and your spouse are taking a trip without your minor children, please consider leaving a power of attorney delegating your parental authority to someone at home. Michigan law (MCL 700.5103) allows you to temporarily delegate your power to make care and medical decisions for your minor children in case of an accident.

Snowbirds on the Move! If Michigan is your residence, you should have an estate plan which complies with and is governed by Michigan law. Many times, these documents will serve you well while you are traveling. However, if you have a second home or recurring destination, you may consider having a second set of powers of attorney and powers of attorney for health care which are prepared by an attorney licensed to practice law in that locale. However, take care to make sure that the second set of documents do not void or otherwise override your primary plan documents.

Enough of this – we’re out of here! If Michigan weather is just too much and you decide to make a warmer destination your permanent domicile, please be mindful of potential tax implications. If one of the benefits and motivations of your move is lower taxes, it’s critical that you establish your new domicile correctly in case a taxing authority challenges your relocation. While there are often legal documents which are the primary method of declaring your new domicile, things as simple as where you buy gas, keep your prized possessions, register your vehicles, and keep any pets are frequently the deciding factors in domicile disputes.

While travel is likely more limited this winter, there are also many life issues and events that you should regularly consider, and we encourage you to reflect on your existing estate plans. In doing so, we recommend that you review the issues listed below.

  • Any immediate family member or beneficiary of your estate plan has died.
  • Any immediate family member or beneficiary of your estate plan has been diagnosed with a terminal illness.
  • Any immediate family member or beneficiary of your estate plan has been or could be deemed incapacitated.
  • Any of your fiduciaries (trustee, personal representative, guardian for minor children, agent, or patient advocate) have died, fallen ill, become incapacitated, or otherwise become unlikely to serve in their role.
  • Your estate has increased significantly in value.
  • Your estate has decreased significantly in value.
  • You have received or expect to soon receive an inheritance.
  • You have a parent who is elderly or suffering from a terminal illness.
  • You have one or more assets which have increased significantly in value since you acquired it.
  • You are considering giving a gift to an individual.
  • You are considering making a significant charitable donation.
  • You have established an irrevocable trust.
  • You are the beneficiary of an irrevocable trust.
  • You have had children or grandchildren (biological, adopted, or step-).
  • You have started or acquired a business.
  • You or a business partner are looking to leave your company.
  • You have entered or changed your profession.
  • You have acquired assets that are not owned by your trust and will be subject to probate.
  • You are engaged, have married, divorced, separated, have been widowed, or have had children turn age 18.
  • Your relationship with anyone named in your estate plan documents has changed.
  • You or anyone named in your estate plan documents have moved outside the United States.
  • Your or anyone named in your estate plan documents have moved outside of Michigan.
  • Your residency status has changed.
  • You are considering retirement.
  • You or anyone named in your estate plan have entered a high-liability profession or career (business owners, physicians, attorneys, accountants, architects, etc.), are exposed to elevated amounts of risk, or are high-profile (celebrity, politician, professional athlete, etc.).
  • You have mortgaged property.
  • You have bought or sold real estate.
  • You have loaned or given money or assets to anyone.
  • You store property offsite from your home.
  • Your personal values or outlook on life has changed.
  • You have acquired assets outside of the United States.
  • You have acquired unusual assets (art, collections, exotic cars, yachts, aircraft, energy-related assets, foreign real estate, etc.).
  • You have created any intellectual property (created art or designs, written songs, written a book or poetry, etc.).
  • You have accumulated digital assets (photos or videos, music collections, cryptocurrency, blogs, social media accounts with significant followings, etc.) which hold significant monetary or sentimental value to you and/or your loved ones.
  • Your spiritual life has changed.
  • You have made any notations or other markings on your estate plan documents.
  • Last year you gave, or this year anticipate giving, gifts in excess of $15,000.00 to any individual other than your spouse.
  • Your estate is trending toward or in excess of $11.7 million.

Regardless of the current state or seasonal travel, it’s important to create and maintain an estate plan, as this year alone has demonstrated to us how quickly and unexpectedly life can change. If any of the above issues or events apply to you, please call a Smith Haughey estate planning attorney to discuss whether your plan should be updated.

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