Keilen Law

Keilen Law

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Why would I contest a Will or a Trust?
 
If your loved one’s Will or Trust is not what he or she really intended, there are corrective actions you can take so that your loved one’s wishes are properly carried out. Who can contest a Will or a Trust? A beneficiary of a Trust, a devisee of a Will, or someone who would have inherited if the deceased died Intestate (without a Will/Trust) has standing to contest a Will or a Trust. Under Michigan Law, spouses, children, grandchildren, parents and in certain circumstances, siblings, are considered interested persons, if the deceased died Intestate. What consequences should I be concerned with if I contest a Will or a Trust? Most Wills and Trusts have clauses in them stating that any interested person or beneficiary who contests the Will or the Trust will forgo their rights in the same – commonly referred to as a “no contest” clause; however, under Michigan Law, a “no contest” clause is only given effect if there is no probable cause for challenging the Trust/Will. MCL § 700.2518. In other words, the consequences of a “no contest” clause will only kick in when there was no reasonable basis (probable cause) to challenge the Trust/Will. What facts give you probable cause to challenge a Trust/Will?
The most common reasons for challenging a Trust/Will are: The deceased lacked capacity when the Trust/Will was made; Undue influence by another (oftentimes, a close family member); Fraud; The existence of a more recent Trust/Will; or The Trust/Will was not executed properly (not witnessed or signed properly). The Take Away. If your loved one’s wishes are not carried out as they intended, and you have a reasonable basis for that belief, per the common reasons above, you can challenge the Will/Trust.
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Can a Trust own and manage my business? The short answer – yes, it can; however, there is more to it. Trusts can own businesses and manage them for the benefit of your heirs, but there are nuances to consider.

S-Corp thoughts/considerations. For example, if your business is an S-Corp, you avoid corporate taxation, double taxation, because the shareholders receive the income and losses from the business (S-Corps are “pass through” tax entities). In other words, the business income gets treated like personal income for the shareholders, although certain exceptions apply. An S-Corp:

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Should I get a trust? The short answer – it depends. There are several factors to consider; primarily, trusts help clients avoid probate (saving time and money), thereby privately distributing assets upon the grantor’s death. However, not everyone needs a trust. Consider the following factors:

How much of your estate will bypass probate? One of the main advantages of a living trust is being able to bypass the time and cost of probate (“probate,” definition: generally, assets are transferred from the decedent to the heirs; it is the process of administering an estate through the courts, a process that can take several months or years and can easily cost thousands of dollars). However, not all assets are subject to probate. For example, exemptions apply to jointly owned assets with rights of survivorship and assets with designated beneficiary forms, such as annuities, life insurance, and retirement accounts. Also, several states, such as Michigan, allow bank accounts to be “payable on death,” or “POD,” so beneficiaries can merely produce a death certificate and valid ID to access the account. Michigan also allows stocks and bonds to transfer-on-death (“TOD,” or “TOD” registration for securities).

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If you die without an estate plan, your loved ones may have to go through the probate court process, wasting time and money. In probate, you run the risk that the court’s decisions may not be consistent with your goals; rather, intestate succession (the process automatically applied when there is no trust or will) determines how your assets are distributed. Estate planning does not have to be expensive; however, even the most basic plans will offer you the following benefits:

  1. Designate Beneficiaries. Who would you like to leave your assets to? A will outlines these intentions; however, improperly titled assets can quickly undo the intentions of your will. Titling assets and designating beneficiaries with the advice of an attorney can avoid unintended consequences.
  2. Appoint a Guardian for Your Minor Children. The decision of whom you choose as a guardian for your children is perhaps the single best reason for creating a will. Choosing a guardian can eliminate interfamily disputes and any questions about your intention; you are able to appoint who you want to take care of your minor children in the event of your death.
  3. (In some cases) Create a Trust for Your Children. Parents should consider leaving assets in trust for the benefit of their children. Assets can be distributed immediately upon your children reaching a certain age, or, many families choose to make disbursements at various ages to prevent wasteful spending. Parents are able to name a trustee to manage the trust assets and make distributions for the benefit of the children over time.
  4. Designate Who Will Handle Your Financial and Health Care Decisions. Your estate plan will include financial and health care power of attorney designations. These appointments grant legal authority to whomever you want to make financial and medical decisions for you in the event of death or incapacity.

As the proverb states, “an ounce of prevention is worth a pound of cure.” Read more at http://www.keilenlaw.com/articles/

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