What Changes Make an Estate Plan Stale?

When to update your Estate Plan in Michigan

An Estate Plan is a collection of documents, each with a different level of flexibility and instances where change is recommended.

In this post, you can learn about the different documents and when to update them.

Power of Attorney, Patient Advocate Designation, and Medical Documents

A Power of Attorney is a document that gives a person you trust (your “Agent”) the ability to manage your financial affairs. This section applies to Powers of Attorney, Patient Advocate Designations, and other medical documents, but for clarity “POA” means any of them.

These are very flexible documents because you can reject them at any time. In order to sign a POA, you need the capacity to understand what you are doing. In order to reject a Power of Attorney, you don’t need any particular capacity at all, except the practical ability to state your rejection. A Power of Attorney that is empowered by the Principal’s incapacity is good for 180 days of incapacity, after which a more permanent solution such as a Conservatorship is needed. A Conservatorship is created by Court. You can reject a POA at any time, and update a POA when you have the capacity to do so.

You should update your POA when your children become adults. Most people want their children to be their Agent, but can’t appoint a minor child.

Update it when you have or lose children.

You should update your POA when you marry or divorce, or when your spouse dies.

Update your POA when you move to a new state. Michigan recently adopted the Uniform Power of Attorney Act, which is adopted by many states, but you should make sure your document meets the new state requirements.

Update or review every 3-5 years. The laws change. In 2024, Michigan adopted the Uniform Power of Attorney Act. While old POAs are typically valid, the new versions allow more flexibility for your Agent, and include the ability to manage new assets such as cryptocurrency.

Trust

A trust is an agreement between a Trustor who creates the trust document, and a Trustor who agrees to be bound by the terms of the trust document. It gives a Trustee the ability to manage property that is owned by the trust - both during your lifetime and after your death.

They come in two flavors: revocable and irrevocable.

A revocable trust is easy to amend, revoke, or change. During the Trustee’s lifetime, it can be added-to, rewritten, or rejected. You do need the capacity to understand that by signing a trust document you are giving your property to the trust to be managed by the trustee. You need similar capacity as what is required to make a Last Will and Testament.

You should update your Trust when your children become adults. Most people want their child to be their Trustee, but you can’t appoint a minor child.

Update it when you have or lose children.

Update your trust when you marry or divorce, or when your spouse dies. You might consider creating two separate trusts in the case of divorce.

Update your trust when you move to a new state. States often recognize the trusts of other states, but each state has rules of interpretation. Even choice of law provisions can’t always help, as state courts have difficulty applying the laws of other states. Many trusts allow the Trustee to change the venue and choice of law provisions of the trust.

Update or review every 3-5 years. A trust is an important document that deserves attention and consideration. If you don’t remember or don’t know what a provision means, hire an attorney to review it and help explain it to you.

A revocable trust becomes irrevocable upon the death of the Trustor, or upon signing if it is an irrevocable trust. Irrevocable trusts cannot be changed except through a complicated decanting procedure. See, MCL 700.7820a. You cannot amend the beneficial interests of the trust, even through decanting, though other provisions can be changed - sometimes for more favorable tax treatment, although that opens another can of worms.

Will

A Will is a document that gives your estate to people you name as beneficiaries, and appoints someone you trust to manage the estate (a “Personal Representative”). You can also establish a Guardian for your kids through a Will (or do it in a separate standalone document). A Will can be amended through the use of a Codicil, but I typically recommend that the entire will be redrawn. I also recommend that old wills be physically destroyed when a new will is executed. It would be terrible to have one child fighting another over different versions of your will, and the surviving original copy is presumed to be the correct one.

All of this is to say that changing a Will is more involved than merely updating it.

You should update your Will when your children become adults. Most people want their child to be their Personal Representative, but you can’t appoint a minor child.

Update it when you have or lose children.

Update your Will when you marry or divorce, or when your spouse dies.

Update your Will when you move to a new state. States often recognize the Wills of other states, but each state has rules of interpretation. Even choice of law provisions can’t always help, as state courts have difficulty applying the laws of other states.

Update or review every 3-5 years. A Will is another important document that deserves attention and consideration. If you don’t remember or don’t know what a provision means, hire an attorney to review it and help explain it to you.

Conclusion

These documents can all be changed and most can be revoked entirely. Not all life events require a change, but they certainly warrant a review. Contact an Attorney to make sure the changes are necessary, and that they stick.