Category: Estate Planning

Shaking The Family Tree: How Ancestry DNA Testing Can Affect Your Estate

Posted on by DAR Law

Bill, a 64-year-old husband and father of four, picks up a call from his sister. After some small talk, the tone of his sister’s voice changes notably. She’s got something to say but doesn’t quite know how to say it.

Finally, she asks “Do you remember Sally Green?”

Bill’s mind files through his Rolodex of family and friends.

“Yes, I dated Sally during my freshman year of college,” he says.

“Well, Sally has a daughter,” says his sister, information that would forever change Bill’s life.

Genetic Testing Changes More Than Our Family Trees

Genetics are a powerful thing and the increasing accessibility to genetic testing is changing more than our family trees. Bill never took a DNA test, but his sister did as part of their family’s ancestry research. It was Bill’s sister’s DNA that connected Sally Green’s daughter, Jenny, to Bill. Jenny was perplexed when Bill’s sister came up as a direct DNA match on a popular genealogy website they were both members of.

While neither of them could figure out who the mutual connection was that linked their DNA, the pieces of the puzzle finally came together and it was confirmed that Bill was Jenny’s father. Bill and Sally had dated in college but Sally kept a secret for more than 40 years, never informing Bill she had become pregnant and given birth to his child.

Family Under the Law

Bill’s story is just one example of how the prevalence of DNA testing and the expansive online databases created from that testing is reshaping the way we define family under the law. Under Michigan’s Estates and Protected Individuals Code (EPIC), with few exceptions, an individual is the child of his or her natural parents, regardless of their marital status.

It is establishment of the parent-child relationship which in turn dictates inheritance under Michigan law. This is the case for both individuals with and without any estate plan in place.

For those individuals who die without a will or other planning in place to direct distribution of their assets, Michigan’s intestate succession laws will do it for you. Under Michigan law, without a will, your assets are directed to be distributed in an order of priority structured in a way to first provide all or a portion to your surviving spouse, then to your “descendants.”

Under EPIC, the definition of a “descendant” means those individuals with the relationship of parent and child at each generation. In Bill’s case, since he is the natural parent of Jenny, she would have the right to inherit a portion of Bill’s estate. Should Bill die without a will and without a surviving spouse, Bill’s estate would be split into equal shares, with Jenny receiving the same amount as Bill’s other four children.

Alternatively, even those individuals who have current planning in place – whether a will, a trust or a beneficiary designation – they are at the mercy of the definitions used in those documents. As estate planners, we use legal terms that have been defined by law to ensure uniformity and create consistency. Unfortunately, the law is sometimes antiquated and slow to catch up.

Ensure Your Estate Plan is Clear

Therefore, it becomes even more important to be proactive in ensuring the definitions used in your estate planning documents are clear with respect to who we define as our “children” or “descendants.” Being diligent in this respect helps us avoid unanticipated consequences and/or unintended individuals from being included for inheritance purposes.

Whether you name your children and grandchildren outright, provide a condition as to those children or grandchildren currently known to you, or specifically include step-children or step-grandchildren, each situation and each family is unique.

Just as society and technology evolve, so should your estate plan. While Bill may develop a relationship with Jenny over time and wish to include her as part of his estate, it should be an informed decision made by him and not simply a legal default.

Cortney Danbrook is an attorney at Danbrook Adams Raymond PLC in Traverse City. She provides specialized counsel to individuals and families in the areas of estate planning, administration and succession planning, and advises business clients on liquor licensing and regulatory compliance. She can be reached at (231) 714-0163 or cdanbrook@darlawyers.com. This article was featured in the September 2022 issue of the Traverse City Business News.

DANBROOK ADAMS RAYMOND PLC, CELEBRATES FIVE YEAR ANNIVERSARY

Posted on by DAR Law

Boutique Law Firm Kicks Off Year Five with A New Location

This month, Danbrook Adams Raymond PLC, DAR Law, celebrates its five-year anniversary of bringing peace of mind to individuals, families, and businesses in Northern Michigan in their practice areas of Employment and Labor Law, Employer Defense and Litigation, Liquor Licensing and Regulation, and Estate Planning and Administration.

After practicing for years in larger firms, DAR’s three attorney owners, Cortney Danbrook, Janis Adams, and Lindsay Raymond, decided their clients deserved more.

“Five years ago, we opened a boutique law firm specifically designed to offer clients the legal experience and skill they would expect from a large firm, but with a down-to-earth, authentic, and personal touch,” shared Cortney Danbrook, DAR partner who specializes in providing advice and counsel to businesses, individuals, and families in the areas of estate planning and administration, liquor licensing and regulatory compliance.

Women of DAR Law Knew their Approach, Experience, and Skill Would Set Them Apart

“We are honored to stand out, not only because we are a women-owned law firm, but also because we have years of experience (55 years combined) in highly focused areas of the law,” said Janis Adams, employment, and labor law partner at DAR. “We’re proud and humbled to be ‘THE’ legal resource in our practice areas.”

The boutique law firm is celebrating this anniversary milestone with a new office location as well. With the goal to better serve its clients, DAR has moved to a new office located at 625 Second Street (Second and Division). The new location features ample and easily accessible private parking on-site, as well as a larger and more welcoming space to counsel and collaborate with their clients.

DAR Law location“We’re excited about our growth and look forward to serving and expanding our client-base in this new space,” said Lindsay Raymond, employment, and labor law partner at DAR.

Your Legal Resource for Peace of Mind

DAR Law extends a special note of gratitude to their legal assistant, professional advisors, and service providers for all their support, and their clients who have allowed them to stand by their side, guide them with their legal issues, and advocate on their behalf for the last five years.

“As business owners, we know the importance of a great team and community. We cannot thank you all enough for embracing us and continuing to trust us to be your legal resource for peace of mind.”

Learn more at darlawyers.com or call 231.714.0157 to set up an appointment.

Is Your Estate Plan Protecting You From Yourself?

Posted on by DAR Law

Incapacity is Never Black & White

A single tear falls from his cheek as he struggles to find the word. A missed mortgage payment, a transposed number, a forgotten appointment, silent confusion. Is it a sign of decreasing competency or typical age-related changes? We are independent and stubborn creatures by nature, born knowing what is best for us and hesitant to put someone else in control. Out of fear, we often ignore the warning signs and cover up cognitive impairments. It is that denial and secrecy that makes it difficult to determine if and when an individual can no longer manage their daily responsibilities.

Incapacity is never black and white. It is a slippery slope fraught with emotion. We live in fear of losing our freedom, and those around us wonder if this is the new “norm,” or if they’re simply jumping to conclusions. By definition, an incapacitated individual “is impaired by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, or other cause, not including minority, to the extent of lacking sufficient understanding or capacity to make or communicate informed decisions.” MCL 700.1105(a) A well-crafted legal definition that unfortunately translates poorly into real life.

Who is Protecting Us from Ourselves?

None of us are equipped to evaluate someone’s mental competency, but if we don’t, who is? Who is protecting us from ourselves? Unfortunately, it often takes a significant financial loss before a cognitive deficiency is discovered. Having the right tools in place can not only avoid court involvement, but protect us from being vulnerable to financial exploitation. As with many things in life, advance planning is key. In fact, estate planning is much more than directing distribution of your assets once you are gone. Instead, a well-crafted estate plan should also provide direction and protection while you are living.

Financial Durable Power of Attorney

An invaluable document that gives us the power to decide who we want acting on our behalf to make financial and business related decisions. All too often we take for granted the day-to-day transactions we are able conduct, but what happens when we are no longer able to do so? Or, who is ensuring that the transactions we conduct are in our best interest? A comprehensive Durable Power of Attorney will incorporate provisions to control how and when our incapacity is triggered, and who will step in when necessary. By defining incapacity, the steps needed to prove it, and appointing the individual to fulfill that role, the Durable Power of Attorney serves as a roadmap for determining incapacity without judicial intervention.

Durable Power of Attorney for Healthcare

Much like the Financial Durable Power of Attorney, the Durable Power of Attorney for Healthcare ensures that we not only choose who we want making decisions related to our healthcare, but that we are also able to communicate our specific wishes with respect to life-sustaining treatment and end of life care. Healthcare related decisions are not only delicate, they are extremely personal; so it is imperative that we know and trust who will be making those decisions when we are no longer able. A carefully drafted Durable Power of Attorney for Healthcare not only allows us to empower our Patient Advocate with the authority to carry out our wishes, it again avoids the complexity of court involvement.

Revocable Living Trust

If a Trust is an element of your estate plan, it is critical that your Trust document also anticipates your incapacity. By nature, estate planning documents are designed to ease the burden on your family and friends, therefore your Trust should not only address appointment of key individuals and direct administration of your assets upon your death; it needs to include a mechanism for determining and managing future cognitive issues. Particularly, it should provide provisions to elect certain individuals
who can trigger evaluation by a licensed physician to certify incapacity, protect you from exercising certain powers upon determination of your incapacity, and give them authority to use the financial resources necessary to pay for your care.

Maintain Control

It will always be a delicate balance between respecting an individual’s independence and protecting that individual from financial vulnerabilities. However, it is no longer about losing control, it’s about keeping it. The first step in maintaining that control is to ensure you have a properly drafted estate plan in place that clearly defines, anticipates and prepares for a cognitive impairment. Whether you executed your documents five years ago, you are appointed in a friend or family member’s documents, or you are a trusted advisor to individuals with diminishing capacity; you should frequently review those documents to ensure you understand how and when incapacity will be triggered. For some, incapacity may be a slow, gradual decline. For others, it will happen unexpectedly. While we may not have control over when we will be affected by incapacity, we can control how our personal and financial affairs will be managed and who we want managing our affairs when we are no longer able to.

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Cortney Danbrook provides specialized counsel to individuals, families in the areas of estate planning and administration. She can be reached at (231) 714-0163 or cdanbrook@darlawyers.com.

Have You Checked Your Beneficiary Designation Lately?

Posted on by DAR Law

Remember that first day of your new job? Sitting anxiously and nervously as that kind human resource manager patiently walked you through endless stacks of “on-boarding” paperwork. Remember the beneficiary designation form you filled out for the company’s 401(k) that day? Remember who you named as the beneficiary of your 401(k)? Probably not, and not many people do. However, the beneficiary, or lack thereof, named on your retirement account not only affects who will receive those assets, but how and when they are taxed. If not done properly, the distribution of one of your largest assets could pass contrary to your intent with unnecessary tax implications.

Retirement assets, such as individual retirement accounts (“IRAs”), 401(k)’s and other qualified plans contain pre-tax dollars. Money you put away in a specific type of savings vehicle which allows you to avoid paying tax on that money until such time as it is withdrawn in the future. These types of accounts allow you to name a beneficiary who will receive the balance of the assets in that account upon your death. Simple, right? Well, not really. Since these accounts contain pre-tax dollars, the IRS is anxiously waiting for the money to come out of the account so they can collect income tax. How and when the retirement assets are taxed depends on a number of factors. Complicating matters was the passage of the Setting Every Community Up for Retirement Enhancement Act (“SECURE Act”) on January 1 st of this year. Prior to the SECURE Act, beneficiaries of retirement assets (with certain exceptions) were able to continue deferring taxes and take required minimum distributions over their life expectancy. The SECURE Act, however, changed that. Again, with limited exceptions, non-spouse beneficiaries now must withdraw all assets within a ten (10) year period. With retirement assets beginning to make up the largest percentage of an individual’s wealth portfolio, proper planning for succession of retirement assets is critical.

  • Putting Your Spouse First. You learn this rule the day you get married, but it also holds true for your retirement assets. When named as a beneficiary, spouses are afforded the unique ability to roll over those assets into their own IRA and treat them as their own. This maximizes tax deferral and provides the greatest amount of flexibility for planning. Keep in mind however, these assets will go outright to your spouse, so special circumstances, including blended families may require additional planning.

 

  • Giving it to the Kids. Besides our spouse, our children are the next natural beneficiaries of our assets. While your estate plan may provide for a trust to hold their inheritance until a certain age, or restrict their access to the assets until specific conditions are met, a standard beneficiary designation will distribute those assets outright. This means that if you name your child as a beneficiary of your retirement account, they will receive those assets regardless of their age or life circumstances. Take Jeff’s story for example. Jeff was a widower with one son, Peter, who just turned eighteen. Jeff passed away unexpectedly with his largest asset being an IRA naming his son Peter, as the primary beneficiary. Since Peter was eighteen, the IRA paid out directly to Peter – free of restrictions. Can you guess what Peter did? He did what any young eighteen year old would do; he withdrew from college, cashed out the IRA and bought the fastest, most expensive car he could find. Not only did Peter unnecessarily accelerate the income tax on the entire amount of the IRA, his inheritance is now fully invested in a depreciating asset.Each family is unique, so careful planning and consideration should be given when naming children as a direct beneficiary of your retirement account.

 

  • Maximize Your Retirement Assets with Charitable Intent. An often overlooked use of retirement assets is to carry out your charitable intent. If you intend for a portion of your estate to go to charities, consider naming those charities as direct beneficiaries of your retirement account. Distributions which go directly to charities are not taxed, therefore the charities receive one hundred percent of every dollar distributed. If you have both individual and charitable beneficiaries, consider setting up separate IRAs or coordinating your estate plan and assets in a way that directs the charities’ portion of your estate shall first come from your retirement accounts.

 

  • Make Sure Your Estate Plan and Beneficiary Designations are Consistent. A common misconception is that your estate plan documents control distribution of all of your assets, including your retirement accounts. Unfortunately, this often leads to inconsistent distribution of assets between an individual’s estate plan and retirement accounts, as well as an acceleration of taxes. Remember that beneficiary designation form? Well, by operation of law, that document controls how your retirement account is distributed, not your Will or Trust. It is not uncommon to fill out your beneficiary designation form and never look at it again. The problem? At the time you signed it, you were single with no children so you named your parents as the beneficiaries. Now, ten years later, you are married with three kids and your estate plan leaves all of your assets to your wife and children. Since the beneficiary designation on your retirement account, not your estate plan, controls that asset, your parents stand to receive that account, not your wife and children. Another common mistake is to designate your “estate” as the beneficiary of your retirement account. Seems reasonable, right? Unfortunately, naming your “estate” as the beneficiary only makes the IRS happy. While the account will eventually get distributed in accordance with your will, it significantly accelerates the payment of income taxes. Instead of your spouse being able to continue tax deferral for their lifetime, or your children having the ten (10) year tax deferral period, your estate is subject to a mandatory five (5) year withdrawal period.

The same thought and planning that you have put into saving for retirement should be applied to the succession of those assets. Periodic review and updating of beneficiary designations is crucial to avoiding inconsistent distribution patterns, unintended omissions and unnecessary taxes. As Benjamin Franklin famously said, “By failing to prepare, you are preparing to fail.”

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Cortney Danbrook provides specialized counsel to individuals, families in the areas of estate planning and administration. She can be reached at (231) 714-0163 or cdanbrook@darlawyers.com.

Creating Responsible Caretakers

Posted on by DAR Law

Recently, a client shared a story with me that I will never forget. While skiing out west, he rode a chairlift with a young woman in her mid-twenties. As they chatted, he asked her what she did for a living. She replied, “Travel and ski.” When he inquired (in a not so subtle way) how she could afford to travel the world, she replied, “My great-grandfather’s trust.” Curious to know more about this tycoon great grandfather who built wealth spanning generations, he asked, “What did your great-grandfather do for a living?”  Her reply? “I have no idea.”

Over the course of just a few generations, how could there be such a disconnect between the sacrifice it took to create wealth, and respect for being the recipient of wealth created by that sacrifice? Does the lack of respect or an obligation to carry it forward mean the demise of family wealth? Each generation strives to create a better life for the next. We work tirelessly to build a solid foundation for our children. To provide them with the resources and opportunities we never had, while sparing them the pain we endured. But can there really be appreciation for something without the sacrifice? Can someone really be grateful for something they have not earned? The answer is yes, but the responsibility may just be on the wealth creator, not necessarily the wealth recipient.

Share the Story

In order to appreciate something, you need to have respect for where it came from. A family’s wealth can be a centennial farm, a first generation business or “old money” passed through generations. Each was built with a story. Not just a story of success, but one of heartache, loss and failure along the way. Share the stories with the next generation – both good and bad. There is always something to be learned from success, but there is even more to be learned from failure.

To Disclose or Not to Disclose

If a child knows they will inherit wealth, are they less motivated to make something of themselves? The fear of creating entitled, non-productive members of society leads the vast majority of families to keep their wealth a secret. The problem?  Wealth cannot be managed responsibly by someone who doesn’t know it exists. Change how wealth is viewed within your family. Discuss wealth as a privilege, not something that is expected, but something that is earned. If earned, wealth becomes a resource that creates opportunity.

Introduce the Concept

Education and preparation precede every successful transition of a family’s wealth, property or business. Engage the next generation in the transition plan. Involve them in the day-to-day management of that wealth and slowly increase their responsibilities over time. Introduce the skills they will need, but don’t hold their hand. Give them the tools, but let them struggle with how to use them. Be a sounding board for advice, not a dictator of the process. The first time your family learns to manage wealth should not come when you are no longer there to guide them.

Foster Relationships

Generational wealth is built and maintained with the help of key advisors. The relationship between an individual and their accountant, financial advisor and attorney can span decades. Inherent in these relationships is institutional knowledge about business decisions, historical planning and family dynamics. Unfortunately, wealth often dissipates between generations when relationships between these advisors and the next generation are not well-established. Make the introduction between your family and key advisors early and allow those relationships to evolve naturally. It will take time to build trust and develop mutual respect between them.

Create Caretakers

Children should feel they are part of something bigger. Gratitude for what they received, but also a sense of stewardship of that wealth for the next generation. Communicate your expectations, but listen, too. Develop a family mission statement together. Incorporate intergenerational ideas, values and beliefs, allowing each family member to play a role in the family story. Ultimately, you will have to have faith that you successfully prepared the next generation to continue that story. After all, they will be the caretakers of the legacy you created.

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Cortney Danbrook advises business clients on liquor licensing and regulatory compliance and provides specialized counsel to individuals, families and businesses in the areas of estate planning and administration. She can be reached at (231) 714-0163 or cdanbrook@darlawyers.com.

This article was featured in the October 2018 issue of the Traverse City Business News.

Positioning the Family Cottage for Generations

Posted on by DAR Law

Northern Michigan summers are synonymous with family gatherings at the cottage. Whether it is pine paneled walls filled with decades of family photographs, a centennial farm or a newly purchased lake house; families flock to these idyllic places seeking to honor family members, reminisce and reconnect. There is something unique about “our happy place.” In the midst of organized family chaos, endless meal service and loads of laundry - time finally stands still, Mother Nature shines her brightest, and we remind ourselves what truly matters in life.

Our ancestors established homesteads to serve as a foundation for generations. Families lived and worked the land, generation after generation. In a world where family members are now spread out across continents, our cottages have become the modern day homestead. A place to bring everyone back together. However, without a family’s livelihood tied to the cottage and no family matriarch or patriarch to manage the familial chaos, how do we ensure the “homestead cottage” will survive? The reality is many don’t. Not for lack of trying or absence of sentimental attachment. Most simply do not survive because there was no plan. Life requires planning and our cottages are no different. Planning not only takes the emotion out of decision making, it creates a roadmap for a successful transition from one generation to the next. The process for creating that roadmap is as unique as our family units and the cottages where we congregate.

1. Initiate the Conversation

Life and financial circumstances differ between family members. While our wish is that everyone will share in ownership and enjoyment of the cottage, some family members may not share the same vision. Have a conversation with the next generation. Ask questions about their wishes, and tailor your cottage succession plan accordingly.

2. The Governing Instrument

The type of document used to manage a cottage depends on circumstances specific to each individual, their family and the property. While Michigan’s uncapping statute has been broadened substantially to eliminate the sudden rise of property taxes upon death, pitfalls remain. Current titling and proposed future
ownership structure must be analyzed as part of choosing the appropriate governing document.  Depending on circumstances, this could be a Tenants In Common Agreement, formation of a Limited Liability Company or development of a Cottage Trust.  Whatever the structure is, anticipate potential management and operational issues, clearly define the expectations of the next generation of owners and address how decisions will be made.  Understand that relationships and family dynamics will change over time, so be forward thinking on issues that could potentially affect the cottage or the ownership structure in the future.

3. Expect the Unexpected

Proper planning assumes there will be disagreements and provides clear instructions for resolution. Encouraging or mandating participation from all family members who will share the cottage helps everyone feel vested in the decisions being made. It can also encourage generative discussions on topics before they become an issue. How will ownership and voting rights will be weighted?  What happens to a family member’s share if they contribute additional funds or labor to a capital improvement on the cottage? Will decision making be centralized through appointment of a Manager or a Committee? What happens in the event of a deadlock?  How will the cottage be used and by whom? How are expenses allocated?  Should sale/transfer be restricted to lineal descendants?  What happens if a family member is unable to contribute their portion to the expenses?  Can a sale of a non-contributing family member’s share be forced? How and when will the decision be made to sell the cottage?  We can never anticipate every future issue, but we can establish a structure that is flexible enough to adapt to change over time.

4. Provide Time and a Financial Cushion

Grief consumes us physically and emotionally, and the process of grieving takes time. After a death, life takes time to normalize and immediate decisions regarding the cottage should be minimized. Include provisions in your plan to allow for self-management of the cottage after death for a set period of time. Fund an account that will pay cottage expenses and provide specific instructions for management and use of the cottage during that same time period. This will give family members time to plan personally and financially to successfully transition ownership and management of the cottage.

5. Include an Exit Strategy

At some point, circumstances or events in life may force one family member to withdraw or sell their share.  Whether it is disassociation/non- involvement, death, disability, divorce or bankruptcy, the exit strategy should be clearly laid out. Proper planning for exiting family members will eliminate the possibility of a third party inserting itself into the ownership structure. Will the other family members have a right of first refusal or an option to purchase – on what terms?  Will value discounts or alternative buyout terms be provided to allow another family member more flexibility in buying out the exiting family member’s share?  Can an ownership share be offered to a third party?  If the other family members cannot/do not buyout the exiting family member’s share, should a sale of the cottage be forced?  A clear exit strategy not only protects the cottage, it protects the interests of the remaining family members.

6. Leave a Legacy Letter

For a succession plan to be successful, future generations need to feel a connection to the cottage. They need to know its history and the story. Leaving a legacy letter is one way that story can continue to be told. It allows us to document and pass on our personal stories, beliefs, values, life’s lessons, etc. from one generation to the next. Incorporating a legacy letter into your succession plan ensures the origin, historical significance and nostalgia of the cottage is not lost with the passing of each generation. Cottages are a generational legacy. They are filled with memories, family traditions and stories of the sacrifice it took to create such a special place. It may be true that you can never  go home again, but a cottage should be a place for generations to come home to.

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Cortney Danbrook provides specialized counsel to individuals, families in the areas of estate planning and administration. She can be reached at (231) 714-0163 or cdanbrook@darlawyers.com.

Administering Your Family’s Estate: A Blessing Or A Curse?

Posted on by DAR Law

You struggle to keep your composure as you arrive at the attorney’s office. You remember being seated in a dark conference room, lined with books – lots of books.

You remember the attorney’s strong handshake and his empathetic gaze. You remember sipping on a cup of mediocre coffee.

You remember being sent on your way with a list of tasks. A list of tasks which you can no longer decipher. “Contact beneficiaries – 63 days.” “Publish Notice to Creditors.” “Possible probate.” “Apply for Tax ID.”

It is during this moment that you feel both burdened and privileged. Privileged to carry out your mother’s wishes and burdened by the weight of being thrust into completely unfamiliar territory full of legal and financial minefields.

The fiduciary duty of administering your mother’s estate lies in your hands. The never ending stream of questions from family members has begun and you have no idea where to start, let alone what your job really entails.

Death should be simple, but it’s not. It’s messy, complicated and emotional. Families and finances are complex and deeply personal. Upon death, the intersection of greed and grief can breed distrust and quickly destroy family relationships. When family members and friends are appointed to administer estates, the decedent is comforted by the notion the family member will “know” what their wishes are, and will do what’s “right.” While the decedent takes comfort knowing their affairs will be taken care of, the personal representative or successor trustee they appoint is rarely (if ever) educated or adequately prepared for what is expected of them after death.

Like religion and politics, death is usually a topic we steer clear of at family gatherings. Everyone has an opinion about it, we whisper about it, but no one wants to openly discuss it – perhaps out of fear it will eventually happen. So, if bringing up a family member’s eventual demise at Thanksgiving dinner is not a viable option, how do you prepare yourself if you are asked to serve as a personal representative or successor trustee?

Start the conversation before death. If a family member or friend appoints you to serve as a personal representative or successor trustee, ask questions while that person is still living. Are they willing to share a copy of the documents with you? Where are the original documents located? Can they introduce you to their attorney, accountant and financial advisor? Help them understand that in order for you to carry out their wishes you need to be part of the conversation now.

Understand your right to decline. While it may be an honor to be appointed to serve, you are not required to do so. You always retain the right to decline the appointment, and the ability to later resign, even if you accept.

Give yourself time to breathe. Stop and breathe. When a family member or friend passes, you have just lost someone you care deeply about. Yes, there will be timelines and deadlines, but most things can wait. Your emotions are running wild and rushed decisions, especially emotional ones, are never good.

Surround yourself with professionals. You have the authority to hire professionals (estate attorneys, accountants and financial advisors) on behalf of the estate to assist you with the estate administration. This does not have to be the decedent’s attorney or tax preparer. They are professionals of your choice who represent you. Take advantage of this. You will thank yourself later.

Cut yourself some slack. You have never been through this process before. No one expects you to know exactly what to do. Every decision has legal and financial implications. Choose an attorney and accountant that you are comfortable with to guide, advise and reassure you throughout the process.

Read the documents. Wills and trusts tell you what to do. Simple, I know. They grant you certain powers, control your actions, direct distribution and provide critical instructions for income, estate and gift taxes. These documents are packed full of legal jargon and can be lengthy for good reason. If you don’t understand the language – ask.

Abide by the terms of the documents. The provisions of the documents express the decedent’s intent. These are not merely “guidelines.” You are bound by a fiduciary duty to abide by the terms of the document. If there is a question as to interpretation, do not infer – ask.

Understand your fiduciary role. You serve in a fiduciary capacity, entrusted with the management and care of estate assets. Review your fiduciary duties. Know what it is expected of you and when; understanding that breaching one of your fiduciary duties can expose you to personal liability.

Recognize your right to be compensated. Serving as a personal representative or successor trustee takes time away from your job and your family. Exercise your right to be compensated for this time and seek reimbursement for any out of pocket expenses you incur. Keep detailed records; you will be surprised at the amount of time and expenses.

Protect yourself. You can be subject to civil and criminal liability for your actions. Document your actions and seek the advice of legal and financial counsel before taking any action you are uncertain about.

Be transparent. Little to no communication with the estate beneficiaries raises suspicion. Be transparent about your actions. You have a duty to keep the beneficiaries reasonably informed and doing so will help keep peace within the family.

Seek court approval. If the terms of the documents are unclear or there is a potential for conflict, seek instruction from the probate court.

We rely on family and friends to carry us through life, so it is not surprising we also rely on them upon death. Serving as a personal representative or successor trustee is an honor. You have been entrusted to carry out of the legacy, memory and final wishes of a loved one. Take your role seriously, ask for help and recognize that you were chosen to serve in that role for a reason.

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Cortney Danbrook provides specialized counsel to individuals, families in the areas of estate planning and administration. She can be reached at (231) 714-0163 or cdanbrook@darlawyers.com.

This article was featured in the April 2018 issue of the Traverse City Business News.