ESTATE PLANNING, PART I

(This article is the first in athree-part series which relates to estate planning paying special attention tonon-marital relationships. Part two will be posted next Friday, May 21. Theauthor, Kristin D. Arnett, is a Lansing attorney specializing in estateplanning. She can be reached at KArnett@HubbardLaw.com.)

I have never personally made aneffort to count but some have said there are thousands of laws which providethe traditional marital models as the default for estate and propertytransactions. For those innon-marital relationships, this safety net of default laws does not apply, thus,to achieve similar results, you need to plan proactively. The default laws provide for loved onesof a decedent who left a spouse and even children, if they fail to create, orchoose not to create an estate plan. Both State and Federal laws exist to provide benefits and means totransfer wealth to a surviving spouse. One recent statistic indicated that 70% of all adults do not have anestate plan, other than that provided by the default laws which are designed tobridge the failure and provide for their traditional loved ones. Same-sex and unmarried couples do notenjoy the same protections for their loved ones. The people who would be protected upon the death of someonein a same-sex or unmarried relationship would likely be family of the decedentwho might not be for whom the decedent would have chosen to provide. It is for that reason that those of youin a same-sex or unmarried relationship must plan and formally executedocuments to accomplish your goals in the event of your death. This is especially true if minorchildren are involved. Odds arethat you will not die tomorrow, or the next month, or even this year but oddsbeing what they are, it will happen to some people, through accident, illness,crime or other unforeseen event. But for those of you in non-marital relationships, you will lose if yougamble and, more importantly, your loved ones will lose.

AN ESTATEPLAN IS a process of developing a planthat begins while you are still living and continues after your death, byproviding for the distribution of your assets and for the care and support ofthose you love. Estate Planning isnot simply filling in the blanks. A proper estate plan requires thought and tailored drafting of documentsthat meet your specific needs. When you begin to think about an estate plan, there are manyconsiderations – who will care for you when are unable to participate in makingyour own medical and care decisions, who will help you pay your bills when youneed assistance, who will care for your minor children after you pass away andhow will their care be funded, how will your partner be supported when you areno longer able to provide support or have passed away? These are tough and important questionsthat require thought and planning.

WITHOUT AN ESTATE PLAN, a decedent dies “intestate,” meaning without a will. Michigan’sEstates and Protected Individuals Code has a set of default rules that providefor intestate succession. Underthe rules of intestate succession, an estate will first pass to your spouse,children and grandchildren. Ifnone exist, then to your parents and their descendents, which would includedecedent’s siblings and their children. If none exist then it goes to decedent’s grandparents and theirdescendents which includes decedent’s aunts, uncles, and their children. Unfortunately, there is no provisionfor a domestic partner or any partner of an unmarried couple. The law seems to actually excludepartners in a same-sex or unmarried relationship. If a same-sex couple had been in a committed relationshipfor fifteen (15) years the surviving partner would not inherit any of thedecedent’s estate, however, if a decedent who had been married for one (1) yearleft a surviving spouse she would inherit under the laws of intestatesuccession.

In addition, if you have childrenand only one partner is the biological or adoptive parent, who is not thedecedent, none of the decedent’s estate will pass to that child becauseaccording to Michigan law the decedent was not the child’s parent.

YOUR PARTNER AND YOUR FAMILYMAY NOT GET ALONG. Sometimes there are other reasons to have an estateplan. If you anticipate familydisapproval, having an estate plan can ensure that your wishes are followed,not your family’s. You have theright to dispose of your property however you see fit. You have the right to provide forwhomever you wish. However, youmust take action to make your desired dispositions a reality. The default laws are NOT likely toprotect your wishes if you do not create a proper estate plan. If the family of the decedent had notaccepted the domestic partnership, the surviving partner may find himself orherself in a legal battle with the decedent’s family over the administration ofthe decedent’s estate.

ISN’T IT EXPENSIVE to create an estate plan? A lot of people are concerned about the cost of an estateplan. An estate plan should belooked at as an investment. Youplan all sorts of things that you pay for throughout your lifetime, such asvarious types of insurance. Anestate plan is generally a one-time fee and is something of an insurance planfor your care as you age as well as the proper administration of your estatewhen you pass away. An estate planshould be reviewed every three to five years or, sooner if a significant changein your property or your intentions occurs. For example, one such obvious change would be the adoptionof a child. You can be assuredthat the cost of creating an estate plan will be less than the cost of acourtroom battle or the cost of not achieving your intentions with regard tothe distribution of your estate if you die without an estate plan. Even if everyone thinks they know whatyou would have wanted, you will not be there to speak for yourself. Even when people act in good faith,there is always the chance of misperceptions. An estate plan, properly created, can act as your voice andspeak to your intent and, perhaps, more importantly, be enforced, if necessary.

One last item I would like toaddress is something that is troubling to a lot of people, regardless of yoursexual orientation – funeral and burial arrangements. After an amendment to Michigan law in 2006, next of kin, notyour partner, have the final say in what happens to your body. In this case, not even someone that youhave appointed as a fiduciary, such as your personal representative, patientadvocate or agent has priority to make these decisions. So, what can be done? You can begin by talking with yourfamily and letting them know what your wishes are. However, that may not be something with which you are comfortable. You can also look into a prepaidfuneral contract. If you have acontract with the funeral home, the funeral director may be obligated to carryout the contract. Finally, you canprohibit your personal representative from paying for any funeral and burialexpense other than the arrangements you made yourself.

(The information above is meant to illustrate aspectsof estate planning and is for informational purposes only.  It is notmeant to be construed as legal advice.  Prior to taking action, you shouldconsult directly with an attorney for specific advice based upon fulldisclosure of your own legal situation.  The above information shall notbe reproduced without specific authority obtained from the author of thisarticle.  © 2010 Kristin D. Arnett)