What is Estate Planning and Why is it Important

Estate planning is the process of placing your wishes down on paper to ultimately dispose of your property either during your lifetime or after your death. Estate planning is important to avoid probate of your estate, to maintain family harmony, and to transfer your property according to your desires. The ultimate goal is to find the simplest and most effective manner possible to dispose of your property.

Any person over 18 years old, including a person with a developmental disability, can prepare an estate plan as long as they know who their heirs are and the general nature of their property. The most common estate plan documents prepared are a Will, a Trust, a Durable Power of Attorney for Financial Matters, and a Durable Health Care Power of Attorney.

A Will is a document that directs distribution of your property upon your death. A Will controls disposition of your property not effectively disposed of by will substitutes. An example of a Will substitute is a beneficiary named on your insurance policy. If the named beneficiary dies before you and you do not change the beneficiary, the insurance would be transferred according to your Will.

A Trust is a document that can be used as a will substitute to avoid probate, provide for management of your property for minor children, and to save taxes.  A Durable Power of Attorney for Financial Matters is a document that gives another person the power to act on your behalf while you are alive. It provides for management of your property in the event you become incompetent or otherwise unable to manage your estate.

A Durable Health Care Power of Attorney is a document that expresses your wishes regarding use of artificial life support to prolong your life. It also may appoint a person to make your health care decisions if you are unable to do so.

Estate planning is not the same for all people. Each person’s needs and problems must be approached on an individual basis. As an estate planning attorney my job is to help you understand the options available to you so that you can dispose of your property as you choose.  Parmenter O’Toole can help you with your individualized estate plan.

* Nancy Ann Hornacek is an attorney with Parmenter O’Toole, PLC in Muskegon, Michigan. The comments in this article are not intended to be a substitute for legal guidance or advice for a specific situation.  You should obtain informed legal counsel to assist in your decisions relating to any issues which may be raised in this article.  For additional information regarding the above topic, Nancy can be reached at Nancy Ann Hornacek or 231.722.5406.