YOUR OLD TRUST - HOLT, JUNE 2010

Living trusts have become the equivalent of a will for many Michigan families…

Jo Anne Hinds, Attorney at Law

Holt Public Schools Community Education

June 30, 2010

Your Old Trust And Michigan’s New Trust Code A Guide to Renovating Your Trust Agreement

Tonight we’ll learn:

• how your documents should work together

• why it’s so important to choose the right person for the right role

• how to ensure your trust is funded correctly and stays that way!

PLUS… what you need to know about Michigan’s New Trust Code

Don’t Let Your Trust End Up in Court!

Avoiding Probate a Priority?

Even with a trust agreement,your estate can end up in court

when things go wrong!

Wills vs. Trusts – A Review of the DifferencesA Revocable Trust has become the “functional equivalent of a Will.”

Last Will & Testament

• Assets passing through will subject to probate

• Court costs• Public court file• Less control of assets• Only provides for

distribution of your assets at death

Revocable Trust Agreement

• Assets passing through trust not subject to probate

• Usually no court costs• Private agreement• More control of assets• Provides for your care for

your lifetime and distribution of your assets at death

The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan

Today Incapacity Death

Let’s pretend that today we are meeting to sign some typical estate planning documents. You may recognize the names of some of these documents, as they may be part of your estate plan.

The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan

Today Death

One of the most simple, yet powerful documents is the General Durable Power of Attorney. There are two types of General Durable Powers of Attorney. The first is Effective Immediately. The second is Springing, or Effective Upon Your Incapacity. The person you nominate for this role is called your “agent” or “attorney-in-fact.”

DPOA – Eff. ImmediatelyDPOA – Eff. on Incapacity

Incapacity

The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan

Today Death

A Health Care Power of Attorney is effective only upon your incapacity. The person serving under a health care power of attorney is your patient advocate.

Michigan law provides that 2 physicians or a physician and a licensed psychologist must determine in writing that an individual lacks the mental capacity to make their own medical treatment decisions before the document can be used.

DPOA – Eff. ImmediatelyDPOA – Eff. on Incapacity

Health Care Power of Attorney

Incapacity

The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan

Today Death

These documents appear on the LIFETIME side of the timeline.

Next, let’s take a look at another commonly used estate planning document, this time on the POST-DEATH side, the Last Will & Testament. The person who administers your will is called a personal representative.

DPOA – Eff. ImmediatelyDPOA – Eff. on Incapacity

Health Care Power of Attorney

LIFETIME DOCUMENTS

Last Will & Testament

Incapacity

The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan

Today Death

Assets passing through a Last Will & Testament are subject to Probate. Your family can expect the following if your assets are subject to probate:

•Filing fees and court costs ($150 + $12 + Inventory Fee)•A minimum of 6-8 months, longer in many circumstances•Attorney fees, paperwork and timelines to be met

DPOA – Eff. ImmediatelyDPOA – Eff. on Incapacity

Health Care Power of Attorney

LIFETIME

Last Will & Testament

POST-DEATH Incapacity

The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan

Today Death

Unlike the Last Will & Testament, a typical Revocable Living Trust starts on the LIFETIME side of the timeline, during which you may transfer assets into your trust, and perhaps even serve as your own trustee.

The person administering your trust is called your trustee. This may be you, or the person who takes over as your successor due to your resignation, incapacitation or death.

DPOA – Eff. ImmediatelyDPOA – Eff. on Incapacity

Health Care Power of Attorney

LIFETIME

Last Will & Testament

POST-DEATH

Revocable Living Trust

Incapacity

The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan

Today DeathDPOA – Eff. Immediately

DPOA – Eff. on Incapacity

Health Care Power of Attorney

LIFETIME

Last Will & Testament

POST-DEATH

Revocable Living Trust

A successor trustee may take over here due to your incapacity…

…or here, due to your death.

You serve as your own trustee for your lifetime, as long as you are competent to do so.

Incapacity

Not all trusts are created equally…

JO ANNE HINDS REVOCABLE LIVING TRUST NO. 1JO ANNE HINDS, currently residing at 999 MAIN STREET, ANYTOWN, MI 49999 hereby makes and establishes this revocable living trust, to be known as the JO ANNE HINDS REVOCABLE LIVING TRUST NO. 1 DATED MAY 12, 2010, reserving unto herself the exclusive right to amend or revoke the trust at any time during her lifetime, with JO ANNE HINDS as Settlor (hereinafter referred to as“SETTLOR”) and JO ANNE HINDS as trustee (“TRUSTEE”), for the purpose of providing asset management assistance during the lifetime of Settlor and to effect the distribution of the trust estate upon Settlor’s death.

Declaration and Agreement of TrustJo Anne Hinds Trust

1. My name is Jo Anne Hinds. My address is 999 Main Street, Anytown, Michigan 49999.

2. I am the creator this trust. Under Michigan law, the creator of the trust is known as the “Settlor.” I also serve as the initial trustee of my trust.

3. The name of my trust is the Jo Anne Hinds Trust.

4. The date of this trust agreement is May 12, 2010.

5. I may change (amend) or cancel (revoke) my trust at any time during my lifetime, as long as I remain competent.

6. I create this trust agreement to provide my trustee with instructions about how to manage my trust during my lifetime and how to administer my trust and distribute my assets at my death.

A living trust islike a basket.

Understanding Trust Funding

What if the future brings unforeseen changes?

• Keep trust agreements funded correctly

• Amend or restate trust terms that are no longer appropriate/accurate

• Update fiduciary roleswhenever necessary

What Can You Do Yourself to Prepare?• Review your trust agreement carefully,

if you aren’t sure if it meets your expectations, consult with an attorney who can explain it to you.

• Express, in your own words, what you expect your trust to accomplish. Ask your attorney if your needs have been met by the document as it is currently written.

• Document changes in assets, beneficiary designations, births, deaths, divorces and other family events. Ask your attorney to explain any impact on your plan.

• Update your plan whenever needed and without delay.

The New Michigan Trust Code

New Code (MTC) based upon Uniform Trust Code (UTC)

UTC has been adopted in some form by 22 states and District of Columbia

In Michigan:

MTC serves as default in most circumstances.MTC assumes all trusts are revocable.MTC remains a part of EPIC.MTC creates uniform standard of competency.

MTC stated purposes: to establish a comprehensive trust code permit expansion of trust practices

and provide certainty.

Effective April 1, 2010

• Wills, trusts, powers of attorney• Estate planning for clients of all ages• Estate administration and mediation services• House calls exclusively, at no additional charge• Weekday evening and Saturday consultations • Free 30 minute initial telephone consultations

Please complete the survey and be sure to include your email addressfor a copy of my helpful and informative e-newsletter.

Thank you!

Thank you from Jo Anne Hinds Advising Families Like Yours Since 1994