Reinventing Mi Retirement: tools and resources to achieve nancial security
Managing Financial Affairs
Nobody likes to think of end-of-life planning matters, but having the proper arrangements and
nances in place can ease the process for your family during this difcult time.
There are a number of legal documents you should consider preparing to “get your affairs in order.”
Although you could create some of these documents by yourself, it is recommended that you consult
with a nancial professional or attorney.
Estate Planning
An estate is the term used to describe all the money and property owned by an individual - in other
words, a person’s assets. Estate planning is a process using certain tools to ensure that your nancial
goals are fullled after death. Goals may include providing for dependents, avoiding probate, or
reducing estate taxes. Estate planning may be as simple as implementing a will or as complex as
executing a trust and exploring sophisticated tax or estate planning techniques. Estate planning may
be more important with a smaller estate because a larger portion will go toward nal expenses. Some
devices that may be used to safeguard and distribute an estate are joint tenancy with full rights of
survivorship, trust, and will.
n Joint Tenancy – This is one way that property can be held by more than one person. A joint
owner cannot sell his or her interest without the permission of other owners. Property held in
joint tenancy does not go through probate; it passes directly to the surviving owner(s). Having
property in joint tenancy may also reduce inheritance taxes.
n Trust – A trust is a written agreement wherein you give a trustee power to manage certain property
for a beneciary. There are several types of trusts. Purposes of the trusts include controlling assets
after death, avoiding probate, providing for disability, and reducing inheritance taxes.
n Will - The primary purposes of having a will are to provide for the distribution of your property
after death and to designate a personal representative to see that your wishes are carried out.
A will may also be used to appoint a guardian for minor children. There are three types of wills
and each is equally valid. Choosing which will to use depends on the size of your estate and your
wishes concerning the distribution of your property.
u A handwritten will must be dated and signed at the end of the document.
u A formal will can be typewritten. It must be signed and witnessed by at least two people.
(Keep in mind that a beneciary under the will should never be a witness to its signing.)
u A statutory will is a form. It is relatively simple to use but allows limited choice. The form is
available in the Planning for Your Peace of Mind publication that is available on the Michigan
Legislative website at http://www.legislature.mi.gov/Publications/PeaceofMind.pdf.
Advance Care Planning
In advance care planning, advance directives are established which specify your health care desires.
Talk with your doctor, family, close friends and other trustworthy advisors about your health care
wishes, questions and concerns. After learning your options and discussing your wishes, prepare an
Advance Care Directive.
Advance Care Directives are specic instructions made in advance that are intended to direct your
medical care when you are unable to do so. They state your wishes about medical, surgical, and/or
behavioral health care when you are not able to speak for yourself.
n Durable Power of Attorney for Health Care – This is a document that allows you to give
another person, called the Patient Advocate, the power to make medical treatment and related
Financial Education
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