Understanding Estate Planning: The Basics Every Michigan Parent Should Know

As parents, we want nothing more than to protect our children and provide for their future. Estate planning may sound like it’s reserved for the wealthy or elderly, but that’s not the case. It’s simply a way to ensure your kids are taken care of if something unexpected happens to you.

At Inhulsen Law, we help Michigan families like yours create a plan that ensures your wishes are honored and your children’s well-being is secured. Let’s walk through some of the basic elements of estate planning and why every parent should consider it.

Wills vs. Trusts: What’s the Difference?

One of the first decisions you’ll need to make when planning your estate is whether you need a will, a trust, or maybe both. While they both serve the purpose of distributing your assets after you’re gone, there are some key differences that may affect your choice.

What Is a Will?

A will is a legal document that lays out your wishes for how your property and assets should be handled after your death. Most importantly for parents of minor children, a will is the legal document where you name guardians for your minor children.

If you have specific items you want to leave to loved ones or charities, your will is where you’ll spell that out. However, one downside of a will is that it typically has to go through probate, a court-supervised process that can take time and money before your assets are distributed.

What Is a Trust?

A trust is a legal entity that holds assets—such as money, property, or investments—for the benefit of specific individuals, called beneficiaries. For parents, establishing a trust is an effective way to ensure your children are financially protected and cared for, even after you’re no longer here.

Here’s how it works: As the person creating the trust (the grantor), you transfer ownership of your assets into the trust. These assets are then managed by a trustee, who is legally responsible for handling the assets according to your instructions. The trustee can be someone you know and trust, or a professional fiduciary. Their role is to ensure the assets are managed properly and distributed to your beneficiaries—such as your children—under the terms you’ve set.

Key benefits of a trust for parents include:

• Control over inheritance: You can determine when and how your children receive their inheritance, which is especially useful if they are minors or not yet financially responsible.
• Avoiding probate: One of the most significant advantages of a trust is that it allows your assets to avoid the probate process, which is a court-supervised procedure that can be time-consuming, expensive, and public. By keeping assets out of probate, a trust helps ensure that your children receive their inheritance faster, without the added costs and delays of probate court.
• Cost savings: Avoiding probate can save on legal fees and court costs that would otherwise diminish your estate’s value, meaning more of your assets go directly to your children.
• Asset protection: A trust can safeguard your children’s inheritance from creditors, lawsuits, or even their own poor financial decisions, depending on how the trust is structured.
• Flexibility: Trusts can be customized to meet specific needs, such as funding your child’s education, covering healthcare costs, or addressing major life events, while protecting the rest of the assets for future use.

By establishing a trust, you can provide long-term security, avoid unnecessary costs, and ensure your children’s future is protected according to your wishes.

Which Is Right for You?

Deciding between a will and a trust (or using both) depends on your family’s situation. If you have minor children, a will is essential for naming a guardian. If you want to avoid probate or have specific wishes for how your assets are handled, a trust might be a good option.

Many families find that a combination of both a will and a trust gives them the flexibility and control they need.

Key Estate Planning Documents Every Parent Needs

Estate planning isn’t just about wills and trusts—there are a few other important documents to consider. These documents work together to create a comprehensive plan that covers both your financial and medical needs, as well as your children’s future.

Powers of Attorney

There are two primary areas where powers of attorney allow you to appoint someone to make decisions on your behalf if you become incapacitated: financial and healthcare.

A financial power of attorney, also known as a general durable power of attorney, gives someone the authority to manage your finances if you are incapaciated and unable to do so. A healthcare power of attorney allows them to make medical decisions you would prefer in the event you cannot for a period of time. Having these in place can ensure that someone you trust handles these matters in your and your family’s best interest.

Beneficiary Designations

It’s important to make sure your beneficiary designations on life insurance policies, retirement accounts, and other financial assets are up to date. These designations will take precedence over what’s written in your will or trust, so double-checking them is a simple yet crucial step.

Guardianship Designations

Perhaps the most critical part of your estate plan as a parent is naming a guardian for your minor children. This person will be responsible for your child’s care if you’re no longer able to.

If you don’t make a legal guardianship designation, the court will decide who takes on this role, and that may not align with your wishes.

Why Work with an Estate Planning Attorney?

Estate planning can seem overwhelming, but you don’t have to go through it alone. An estate planning attorney can help you understand Michigan’s laws, avoid common mistakes, and create a plan that truly fits your family’s needs.

Personalized Planning

At Inhulsen Law, we believe that no two families are the same – we work with you to create a personalized estate plan that reflects your unique situation, guiding you through the process step by step.

Peace of Mind

One of the biggest benefits of estate planning is the peace of mind that comes with knowing your family will be taken care of, no matter what. Estate planning ensures that your wishes will be honored and secures your children’s future. That’s a powerful gift you can give your family.

Take the Next Step

If you’re ready to start planning for your family’s future, contact Inhulsen Law today to schedule a consultation with one of our estate planning attorneys. We’ll work with you to create a personalized plan that gives you peace of mind and protects the ones you love most.

Your family’s future is too important to leave to chance—let’s make sure it’s protected. Reach out to us today!