Having gone through a divorce a few years ago, I understand that taking on one more legal task might be a bit overwhelming. And yet Estate planning after a Michigan divorce enables you to protect your assets, ensure your children will always be well cared for, and provides you with a sense of security and control amidst the turmoil of a divorce.
Utilizing Trusts in Estate Planning for a Divorce to Preserve Assets for Your Children
Most people think that only a will is needed to nominate guardians for minor children, especially when life insurance is the primary funding to take care of them. Naming a trusted family member or the children as beneficiaries of the policy is often believed to be enough. However, other aspects of Michigan law concerning Estate Planning and divorce enable a former spouse to access the life insurance proceeds if only a will is in place. Because of this, it is often better to secure your assets by creating a trust to receive life insurance proceeds with a trustee who you know will protect your assets for your children and prevent your former spouse from ever having access to them. The trust should specifically state that as your intent.
Estate Planning for Your Own Needs after a Michigan Divorce
While the children are typically the primary reason for estate planning after a divorce in Michigan, a durable power of attorney for financial matters and a durable power of attorney for health care, provide protections for you and your children. If you are unable, due to some unforeseen health issue, to properly handle your finances or to make health care decisions for yourself, a durable power of attorney allows you to choose in advance who would make those tough choices. Your agent and patient advocate is empowered by these documents to ensure that your needs and those of your children are addressed in these situations.
Preventing Squandered Opportunities and Loss of Family Interaction.
While Michigan law has some protections for grandparent’s rights, they are not particularly strong. A determined former spouse could easily squander money left to care for your children under a will, so long as it was used for the children’s “general welfare.” Your ex-spouse could also move your children far from your family and any other positive influences you might want in their lives. Creating a strong trust allows the trustee to use funds to ensure that your family can stay involved, even if the children are moved out of state. Keeping the funds separate from the children can also create incentives for your former spouse to keep the children in the state, which must be carefully drafted to ensure it does not violate public policy.
Estate Planning After a Michigan Divorce is a Must for Everyone
An estate plan is not only for the wealthy. Estate planning after a Michigan divorce should include a will, power of attorney for both your financial and healthcare needs, but it should almost always include a trust for your minor children and other loved ones. A Trust gives your family and loved ones options for utilizing the funds to ensure that your children remain involved with the family and that their best interests are kept in mind.
A divorce was probably not what you envisioned for your future. Yet you can solidify your decisions to best help your children and other loved ones now, no matter what the future holds.