How to plan for your personal and financial affairs now, so that YOU (not the state of Michigan) determine what happens to your children and assets when you become incapacitated or die.

1. ESTATE PLANNING ESSENTIALS
FOR THOSE WITH MINOR CHILDREN
MELISA M. W. MYSLIWIEC
FRASER TREBILCOCK
THESE MATERIALS ARE NOT INTENDED AS LEGAL ADVICE AND ARE FOR EDUCATIONAL PURPOSES ONLY.
© 2013 Fraser Trebilcock Davis &
Dunlap, P.C.

2. Estate Planning
 Who: Everyone over 18 (with sufficient mental
capacity).
 What: A plan for your personal and
financial affairs now, during incapacity and
after death.
 Why: So that YOU (not the State of
Michigan) determine what happens to
your children and assets when you
become incapacitated or die.
 Result: You protect and provide for your
family in a manner that is cheaper and
easier (at an already difficult time) with the

3. Federal Estate, Gift & GST
Taxes
YEAR ESTATE & GIFT
TAX
EXEMPTION
TOP
ESTATE, GIFT
& GST TAX
RATE
LIFETIME GIFT
TAX
EXEMPTION*
BASIS OF
INHERITED
ASSETS
2011
(begin
portability)
$5 million 35% $5 million Fair market
value
2012
(begin indexing
for inflation)
$5.12 million 35% $5.12 million Fair market
value
2013** $5.25 million
(projected)
40% $5.25 million
(projected)
Fair market
value
2014 and
beyond
Increases each
year by a COLA
40% Increases each
year by a COLA
Fair market
value
*Annual gift tax exemption for 2013 is $14,000 (COLA adjusted since
1997)
**American Taxpayer Relief of Act of 2012 made these exemption
amounts/rates permanent – until Congress agrees to further changes.

4. Most Common Estate Planning
Documents
 Will
 Revocable Grantor Trust (“Living Trust”)
 Assignments (general/specific)
 Durable Power of Attorney
 Designation of Patient Advocate
 HIPAA Authorization to release medical
information

5. Minor Children – What’s
Important?
 Appoint a Guardian and Conservator.
 A guardian is responsible for the child’s support
and care.
 A conservator is responsible for managing the
child’s property for the benefit of the child.
 Hold and manage assets for the benefit of your
children beyond the age of 18.

6. Guardian for Minor Child
 If parental rights of both parents or a surviving
parent are terminated or suspended for any
number of reasons (ex. death), a guardian
will need to be appointed for any unmarried
minor child.
 A minor guardian essentially has the powers
and responsibilities of a parent.

7. Who Chooses the Guardian?
 A parent may appoint a guardian for a minor
child by will or by another writing signed by the
parent and attested by at least 2 witnesses.
 In certain circumstances, the court may
appoint a guardian for a minor.

8. Parental Appointment of
Guardian
 If both parents are dead or have been
adjudged to be legally incapacitated or the
surviving parent has no parental rights or has
been adjudged to be legally incapacitated, a
parental appointment becomes effective
when the guardian files an acceptance with
the appropriate court.
 Note: A minor 14 years of age or older may
object, but the objection doesn’t preclude the
court from appointing the parental nominee or
another suitable person.

9. Court Appointment of Guardian
 The court may appoint as a guardian for a
minor any person whose appointment “serves
the minor’s welfare.”
 Note: If the minor is 14 years of age or older, the
court shall appoint a person nominated by the
minor, unless the court finds the appointment
contrary to the minor’s welfare.

10. Conservator for Minor Child
 The court may appoint a conservator (or make
another protective order in relation to a minor’s
estate and affairs) if the court determines that
the minor owns money or property that
requires management or protection that cannot
otherwise be provided, has or may have
business affairs that may be jeopardized or
prevented by minority, or needs money for
support and education and that protection is
necessary or desirable to obtain or provide
money.

11. Who Chooses the Conservator?
 A person nominated by the will of a deceased
parent has priority over all individuals, if
suitable and willing to serve.
 Exceptions: An individual nominated by the child,
if 14 years of age or older and of sufficient mental
capacity to make an intelligent choice, has
greater priority.
 The court may nominate any person that the
court determines suitable and willing to serve if
there is no one with statutory priority suitable
and willing to serve.

12. Conservator –
Statutory Priority for Appointment
1. A conservator or guardian of property appointed in another
jurisdiction.
2. An individual nominated by the child, if 14 years of age or
older and of sufficient mental capacity to make an intelligent
choice.
3. The spouse (if the minor child is married).
4. A parent or a person nominated by the will of a deceased
parent.
5. A relative with whom the child has resided for more than 6
months before the petition is filed.
6. A person nominated by the person who is caring for or
paying benefits to the child.
Other than someone nominated in 2 or 6, above, a person designated
by someone listed above has the same priority as the person listed
above.

13. How is property conveyed at
death?
Trust
(Terms of Trust
Control)
Beneficiary
Designation
Joint
Ownership
Probate
(Intestacy Laws or
Terms of Will Control)

14. Minor Children as Beneficiaries
 If a minor is the beneficiary of an
asset, through either joint ownership, a
beneficiary designation, or probate (i.e. a
will), a conservator is almost always appointed
to hold and manage the asset(s) for the benefit
of the minor child until they turn 18 years of
age.
 At 18 years of age, the child gains full access
to the asset(s). The only way to avoid this is to
hold the assets in trust for the benefit of the
child until a later age.

15. What does my Estate include?
 Everything you own!
 ½ Interest in Jointly held
property, Tenancies in
Common
 Other assets in which you
have retained an interest
 Things you own
individually:
 Real Estate
 Financial Accounts
 Investments
 Life insurance
 Only assets in your
name alone.
 Excluded assets:
 Jointly held property
 Trust Assets
 Contracts:
 Life insurance
 401ks, IRAs
 Annuities
Gross estate -Federal Estate
Taxes:
Probate Estate:

16. What is Probate?
 The legal method by which individually
owned assets are conveyed (either by
intestacy laws or by directions in a Will.)
 Public – Will filed with Court
 Time consuming (5 months minimum – 1
year average)
 Can be Costly (2-10% of probate estate is
often spent in administration costs)
 Streamlined (if in unsupervised
administration, only contested issues
require court involvement)

17. What happens if you have no Will?
 The State of Michigan will decide who will inherit your estate
by the intestacy laws.
 Surviving spouse takes the entire share if there are no
descendants or parents.
 Surviving spouse takes the 1st $210,000 plus ¾ of the
balance if there are no descendants, but there is a surviving
parent.
 Surviving spouse takes the 1st $210,000 plus ½ of the
balance, if any of the decedent’s descendants are also
descendants of the surviving spouse.
 Surviving spouse takes the 1st $140,000 plus ½ of the
balance, if none of the decedent’s surviving descendants
are descendants of the surviving spouse.
 The above dollar amounts are adjusted each year for
inflation. These are 2012 numbers; 2013 numbers are not
yet published.
 The surviving spouse’s intestate share is in addition to the
exemptions and allowances, which for 2012 can total
$60,000.

18. What if there is no surviving spouse?
 Decedent’s descendants by right of
representation.
 If no descendants, to decedent’s parents, or the
survivor of them.
 If no parents, to descendants of decedent’s
parents by right of representation (siblings).
 If no siblings, ½ to paternal grandparents, or the
survivor, and ½ to the maternal grandparents, or
to the survivor. If either side has no surviving
grandparents, then that share shall go to the
descendants of those grandparents (cousins), by
right of representation.
 If there are no heirs, the estate will go to the
State of Michigan!

19. What goals can be achieved with a
Will?
 Designate fiduciaries: Personal
Representative
(Executor), Guardian/Conservator for
Minor Children, Trustee for a
Testamentary Trust
 Make gifts to family, friends, charity
 “Pourover” assets to a Revocable Trust
 Establish a Testamentary Trust to manage
assets for your minor children, a special
needs child, or an aging parent

20. What goals can be achieved with a
Trust?
 Avoid Probate
 Reduce or eliminate Federal Estate
Taxes
 Manage personal and financial affairs
during times of capacity, incapacity
and after death
 Preserve assets for Minor Children
 Support
 Education
 Health care

21. What goals can be achieved with a
Trust? (continued)
 Schedule distributions over time to
preserve assets for child until more
mature. (Example: 1/3 at 25, ½ of
balance at 30, remainder at 35.)
 Provide amenities for Special Needs
child without jeopardizing governmental
benefits
 Protect assets from a child’s spendthrift
habits, creditors, spouse and spouse’s
creditors
 Provide for Spouse of a second marriage
during his/her life yet have remainder of
trust assets go to children of first
marriage

22. Trust funding is important
 Funding is name for putting assets in name of
trustee
 Retitling of accounts
 Deeds
 Beneficiary Designations
 Assignments
 Funding avoids Probate -- Without proper funding
of trust you may have a probate administration
AND a trust administration
 Asset by asset determination
 Ongoing process – don’t forget to keep funding as
additional assets are purchased/received

23. Trust vs. Will: Which is better for
YOU?
A Will might be better if:
 1st Marriage
 Adult children and want to pay out
immediately upon death
 Don’t have strong objections to Probate
 Estate under $500,000 (but depends on
circumstances)
 Most assets are non-probate assets

24. Trust vs. Will (Contd.)
A Trust is typically better than a Will if you have:
 Minor children
 Special Needs children
 Taxable estate
 Second marriage
 Spouse/child needs assistance managing
assets
 Strong desire to avoid probate

25. Durable Power of Attorney – Financial
 Designate a trusted spouse, child, parent, or
friend to make financial decisions when you
are unavailable due to absence or incapacity,
or simply for convenience.
 Usually avoids need for Conservatorship/stay
out of court
 Designate your own Guardian/Conservator
 Durable Powers of Attorney can be effective
 Immediately (much more common)
 Upon disability (somewhat problematic)

26. What can an Agent do?
 Conduct banking
 Buy/sell property
 Conduct/manage a business
 Prepare Tax returns
 Apply for governmental benefits
 Give gifts
 Create/Amend a Trust and transfer property to a
Trust
 Plan for Medicaid
 Anything you could do personally (unless DPOA is
limited in scope)

27. Designation of Patient Advocate
 Designate a Patient Advocate to make medical
decisions on your behalf when you can no
longer communicate your wishes for treatment
 Reduce likelihood that your family would need to
obtain a Guardianship over you -stay out of
court.
 Often called:
 Health Care Durable Power of Attorney
 Advanced Directives
 Living Will BUT Michigan does not have a Living
Will statute

28. What can a Patient Advocate do?
 Communicate your wishes for medical treatment –
end-of-life and routine care
 Terminate or withhold life support
 Place you care facilities – assisted living, nursing
home, and hospice
 Take you home (even if against medical advice)
 Direct treatment for pain
 Make anatomical gifts (after death!)
 Make mental health treatment decisions if you
give specific authority

29. What is a HIPAA Authorization?
 Federal HIPAA Laws mandate confidentiality of
your individually identifiable health care
information, even limiting access by your
spouse and children.
 Having a HIPAA Authorization will allow
doctors to release health care information to
those you choose.
 Access to health information is also given in
the designation of patient advocate (but that is
only effective upon incapacity).

30. When Should I Update my
Documents?
 Change in law (see attorney every 3-5 years, more often
if older)
 Want to add or delete beneficiaries (family/charity)
 Death in family (fiduciaries or beneficiaries)
 Got married/divorced/remarried/retired/moved to new
state
 Want to change trustee, personal representative, agent
 Children are older and wiser/Children are older but not
wiser!
 Have less money (market issues)/Have more money
(received inheritance)
 Have new assets (real estate, insurance, business)
 Don’t want a trust/Want a trust/Need a Different Trust
(special needs, tax planning, children have
creditors/divorce)

31. What should you look for in an estate
planning lawyer?
 Focus of practice is estate planning
 Familiar with additional practice areas you
need such as business succession
planning, real estate, Medicaid
planning, etc.
 Keeps current on changing laws
 Is someone you feel comfortable talking
with
 Is someone you trust
 Will discuss how much their services will
cost
 Will assist with funding your trust

32. Why bother?
 Self determination – Be in charge of your estate
 Save money in the long run –
 Large estates -- Estate taxes can be reduced/avoided
 Family fights -- Litigation is expensive!
 Reduce court involvement
 Help your family by making a plan
 Reduce stress at an already difficult time
 Reduce second guessing on what you would want
 Eliminate/reduce family fights
 Protect your children from creditors, help them manage money
until they are able to do so
 Select the best guardian and conservator for your child
 Enjoy a great feeling of relief and accomplishment!

33. QUESTIONS?
© 2013
Fraser Trebilcock Davis & Dunlap, P.C.
Fraser Trebilcock Davis & Dunlap, P.C.
40 Pearl Street NW, Suite 910
Grand Rapids, Michigan 49503
www.fraserlawfirm.com
Phone: (616) 301-0800
Fax: (888) 230-3442
Melisa M. W. Mysliwiec
mmysliwiec@fraserlawfirm.com
616-301-0800
Offices located in:
Lansing, Grand Rapids, Detroit, and Washington D.C.