You live in another state, but want a Michigan attorney to handle your estate plan. There are many reasons that you may want a Michigan attorney to coordinate your estate plan.
It may be that you summer in Michigan, but have your permanent residence in another state where you spend most of your time. It could also be that you have real estate or other property in Michigan. Or you could have loved ones in Michigan whom you want to manage your property and financial affairs in the event of your disability or death.
The Michigan attorney you want to use may be a trusted family advisor who has prepared estate plans for other family members who are Michigan residents. Although you are not a Michigan resident, you were named a trustee of a Michigan trust or personal representative of a Michigan estate and were assisted by a Michigan attorney in whom you now have confidence.
You may have lived in Michigan and had a Michigan attorney whom you want to continue to handle your affairs, even though you now live out-of-state. Or you could have been referred to the Michigan attorney by your professional advisor or other clients of the attorney.
These are just some of the reasons that we have seen in our office why non-Michigan residents want us to prepare their estate plans. Although the majority of our estate planning clients are Michigan residents, we have estate planning client from across the country and around the world.
The one thing that all of our non-Michigan resident clients do have in common is some connection with Michigan and want a Michigan trust. One nice benefit of a trust is that you can pick and choose which state law you want to govern your trust. And regardless of the state law you choose, the trust is portable throughout the United States and can own property in any state of the union. All of our clients who live outside of the United States are U.S. citizens who own property in the U.S. and want a Michigan trust to hold their U.S. based assets.
All of your property owned by your trust is governed by your trust. Upon your death, assets in trust avoid probate and are distributed in accordance with the instructions that you have in your trust. This avoids having to open probate estates in every state in which you own property. If you avoid the probate in those states, you also avoid the bulk of the probate fees.
Some states have statutory probate fees for attorneys and personal representatives or executors. For example, attorneys in Florida or California are entitled to statutory fees up to of 3% or 4% of the probate estate. However, I have seen attorney fees even higher. And in New York, executors are entitled to statutory fees of up to 5% of the probate estate. And there are additional costs on top of the attorney and personal representative or executor fees, such as court costs. Probate courts generally have set filing fees and/or inventory fees which are based upon a percentage of the probate estate.
With a trust, the only fees that are generally incurred in the state where the property is located are attorney fees to prepare a deed and the recording the deed at the local register of deeds office. There is no need to deal with the probate court in any of those states.
A Michigan attorney can design your estate plan and draft documents that are governed by Michigan law such as your trust and related documents and any deeds for any Michigan property. However, when you are a resident of another state, there are certain estate planning documents, such as your financial and healthcare powers of attorney, your will and deeds for non-Michigan real estate which are generally not governed by Michigan law.
These other documents are generally going to be governed by the laws of your state or country of residence or the laws of the state or country in which the property is located. Most states have specific statutes governing financial and healthcare powers of attorney, wills and deeds for real estate.
Unless the Michigan attorney is licensed in the other states, the Michigan attorney should not be drafting those documents. When we are preparing an estate plan for out-of-state residents, we generally coordinate with an attorney in our client’s home state and in each state in which property is located to draft those documents for which we are not licensed to prepare.
Your Michigan attorney should work with the other attorneys so that every deed is prepared an attorney licensed in the state in which the property is located. There are two reasons for this. One, the Michigan attorney typically does not know all the intricacies of real estate law in the other state. Two, the Michigan attorney could have criminal liability for the preparation of out-of-state deeds. For example, there are reports of the Florida Attorney General prosecuting non-Florida attorneys who prepare and record Florida deeds because the non-Florida attorney has engaged in the unauthorized practice of law in Florida.
When we are preparing an estate plan for out-of-state residents, we generally will review the documents prepared by the other attorneys before client signing to make sure that they coordinate with our client’s wishes and estate plan.
In these cases, you may think that the Michigan attorney’s fees will be less because the Michigan attorney will not be drafting all the documents. However, it generally takes at least as long to review an estate planning document as it does to draft it. You will have fees from not only the Michigan attorney, but also the attorneys in your home state and any state in which you have property. However, our out-of-state clients are willing to pay the additional up-front costs because it is worth it to them to have a fully funded Michigan based trust
There would also typically be substantially lower fees and costs upon disability or death because the trust is fully funded. Trust funding is completely and correctly designating your trust and individuals as owners, beneficiaries and insured parties of your assets.
So if you are not a Michigan resident, you can still have a Michigan attorney prepare your estate plan in order to keep you in control during your lifetime when you are alive and well; provide for you and your loved ones in the event of your mental disability; and when you are gone, you can give what you have to whom you want, when you want, the way you want; all at the lowest predictable overall cost to you and your loved ones.
By: Matthew M. Wallace, CPA, JD
Published edited February 22, 2015 in The Times Herald newspaper, Port Huron, Michigan as: Get right lawyer for estate plans