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Ypsilanti Michigan Legal Blog

Steps to creating your first estate plan

There will come a time when you decide to dive in and create your first estate plan. Even if you waited longer than you should have to do this, you're now faced with the process.

There are many steps that will put you on the right track to creating your first estate plan, including:

  • Deciding between a will and trust. There are pros and cons of both, so compare the finer details before making a decision. A will is typically easier to create, but a trust offers benefits like avoiding probate for your beneficiaries.
  • Choosing the right beneficiaries.: This is easy for some people, as they name a spouse and/or adult children. Others, however, need to think outside the box, especially those without any immediate family members or heirs.
  • Creating a durable power of attorney. If you're incapacitated and unable to make your own decisions, a durable power of attorney gives your agent the power to takeover management of your money and make health care decisions for you that are in your best interest.
  • Making a list of assets and debts. Without this, you could neglect to leave a particular asset to the specific person you intend. With a checklist in hand, this shouldn't be a concern.
  • Naming a guardian for your minor children. If you have children under the age of 18, you will need to name a guardian who will take over your parenting duties should you pass away.

Tips for helping a parent find a nursing home

When helping a parent find a nursing home, you're sure to face a variety of emotions. On one side, you know it's the right thing to do, so you're happy to help. Conversely, you may be upset that your parent is no longer able to care for him or herself.

There are many steps you can take to help your parent find the perfect nursing home or extended living center. Here are five things to consider:

  • Visit several facilities. The last thing you want to do is make a rash decision just because the first facility you visit appears to have everything your parent will need. Compare at least three nursing homes before making a final choice.
  • Talk with your parent about the move. They're likely to have some anxiety about moving to a nursing home, so you need to keep an open line of communication.
  • Talk to the staff. You don't want to focus solely on what you see on the surface. You need to talk to the staff to get a better idea of how they act, what they offer and what your parent can expect. Watch for red flags during these conversations.
  • Ask questions. This goes along with talking to the staff, but takes things a step further. The more questions you ask, the more you'll learn. Learning more about the options your parent has can make it easier to choose the right facility.
  • Learn more about the food and floor plan options. Every nursing home is slightly different in these areas, so you should dig into the finer details to learn more. Is the food high quality? Are there many options? Is there more than one room layout to choose from?

Do you know why you’re always overspending?

No matter how hard you try, there will be months when you overspend. You look at your budget and realize that you didn't do a good job staying on track.

While it's okay to make mistakes every now and again, it should be your goal to stay within your budget at all times. Doing so goes a long way in helping you avoid long-term financial trouble.

Situations that may point you toward bankruptcy

Most people understand the seriousness of filing for bankruptcy, which is why they take their time when making a final decision. While it's okay to consider all your options, you don't want to delay too long.

Here are a few situations that often lead to a bankruptcy filing:

  • Your debt continues to grow: No matter how hard you try, you keep digging yourself a deeper hole. If your debt continues to grow no matter what you do, it's time to consider the impact bankruptcy can have on your life.
  • You're using your retirement funds to get by: If you're desperate enough, there may come a point when you turn to your retirement accounts for money. It's your right to do so, but it will definitely impact your ability to retire in the future.
  • You're in jeopardy of losing your home: No one wants to lose their home to repossession but if you're not current on your mortgage, this could happen sooner than you think. Through a bankruptcy filing, you can stop your lender from proceeding with foreclosure, thus allowing you to save your home.

Get peace of mind with a health care power of attorney

Although you may be healthy today, it doesn't necessarily mean you'll always feel your best. There may come a point in the future when you require medical care. Furthermore, it's not out of the question that you could become incapacitated temporarily or permanently.

If you're unable to make medical decisions on your own, either because of a mental or physical incapacity, it's important to know that someone you trust will step in and make all the right decisions on your behalf.

Don’t forget to address these Chapter 13 bankruptcy questions

If you aren't eligible for Chapter 7 bankruptcy, there may come a point when you learn more about Chapter 13. While this is a different approach to improving your financial situation, there are a variety of benefits that can work in your favor if you go forward with a Chapter 13 filing.

The main thing to remember about Chapter 13 bankruptcy is that you are required to repay some of your debts through a repayment plan. This plan typically lasts for three to five years, so you must be committed over the long term.

Comparing wills and trusts

The public has a general understanding of both wills and trusts, but it is mostly gathered from the way that films and television shows talk about them, not from any personal experience with these legal tools.

While both wills and trusts are an essential part of most estate plans, they serve different purposes, and one generally cannot fill in as a substitute for the other. If you are beginning your estate planning journey, you need to understand the uses of these fundamental tools, since virtually all estate plans involve a will and many involve trusts.

Is every type of debt dischargeable under Chapter 7 bankruptcy?

As you begin to consider the pros and cons of Chapter 7 bankruptcy, you'll likely enjoy the fact that you can discharge some of your debts. Discharging a debt means that it is wiped clean, and you don't have to pay back those creditors in the future.

While this is the number one benefit of Chapter 7 bankruptcy, remember this: Not all types of debts are dischargeable. There are some that remain with you, even after your filing is complete:

  • Most types of tax debt, such as federal taxes owed from past tax years
  • Debts for obtaining money or assets through fraud or false financial statements
  • Child support
  • Alimony
  • Debts for some types of penalties and fines
  • Student loan debt
  • Debts you did not list on your Chapter 7 bankruptcy forms

Is bankruptcy the answer to your financial problems?

There may come a point when you realize that your financial problems are too advanced to solve on your own. If this happens, it may be time to learn more about Chapter 7 and Chapter 13 bankruptcy. Both of these can go a long way in improving your finances, thus allowing you to start fresh in the future.

Since bankruptcy is such a big decision, you don't want to go down this path until you first consider your other options. There are many alternatives to bankruptcy to consider, such as:

  • Debt consolidation. With this, you're putting separate debts under the same loan. This improves your organization, while also saving you money on interest charges.
  • Contact your creditors. Don't assume that your creditors are against you. They want things to work out, so contact them to discuss a repayment plan (or any other idea they have).
  • Default on the debt. This isn't the ideal situation, but there are benefits if you don't have anything left of value for a creditor to come after.

Important questions to address when creating a will

Creating a will is one of the best things you can do from an estate planning perspective. Even if you do nothing else, this legal document will ensure that your property ends up with the right person or people upon your death.

There are several important questions to address before creating a will, including the following:

  • Is it right for you? While a will is a commonly used estate planning document, you should compare the pros and cons to a trust. This will help you determine what's best.
  • Do you have to create a will? There is no law stating that you have to create a will, but if you don't have a valid will, your estate is settled based on the laws in your state. This may not align with what you want to happen.
  • Can you create a will on your own? DIY will creation tools are popping up all over the internet. The problem with these is that you never know for sure if you're making the right decisions or doing something that is against the law.
  • Who's the best person to name as your executor? This is the person responsible for the probate process upon your death. You need to choose someone you can trust to handle everything in a timely and efficient manner. Most people select a close relative or a trusted friend.
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