Series: Matters of Life and Death
By Jehan Crump-Gibson, Guest Columnist
The conversation around getting your affairs in order is becoming more mainstream. While it is much needed and well-intentioned, it is sometimes led by individuals without the necessary expertise. This fuels misconceptions and assumptions, which can cause confusion and lead to unintended consequences — namely, probate court. Probate court often involves a time-consuming, public and sometimes costly process before a person’s loved ones can receive what they leave behind for them. This is one of the main reasons we get our affairs in order— to avoid it.
When it comes to messaging around getting your affairs in order, one thing that is emphasized is the importance of getting a Will (or a Last Will and Testament). From reels on Tik Tok and Instagram to YouTube channels and community forums, the public is encouraged to have this important document drawn up so that their assets can avoid probate court. Unfortunately, there is a built-in misconception in this message. It assumes that a Will avoids probate court. The truth? It DOES NOT.
A Will is useful to the extent that it is an instruction sheet that must be honored. It typically lays out who is responsible for distributing any assets that someone leaves behind and who is supposed to get those assets. Assets can mean anything from homes, insurance policies and bank accounts to business interests, stock and retirement accounts. However, those assets do not get distributed without court involvement just because someone has a Will. Why? This is because anything in someone’s name alone when they pass away must go to probate court before it is distributed to anyone. So, if Mama Debbie left a Will but her house and bank accounts are in her name alone with no joint owner or beneficiary, the Will is only useful in telling the court who will get those things. Legally, the house and the accounts cannot pass to whoever they are intended for without the court’s involvement.
A Will also cannot override beneficiary designations. This means that if Mama Debbie names one of her children as beneficiary on her life insurance policy, it does not matter if the Will says she wants all three of her children to receive all her assets. Unless the child who is named beneficiary decides to honor Mama Debbie’s wishes out of moral obligation or the kindness of their heart, the other children will receive none of the life insurance proceeds. Many people discover this and ask what is the point of the Will if it can cause all these issues? My answer? While it certainly serves a purpose, where there’s a Will, there’s not necessarily a way when it comes to avoiding probate court. In many cases, a Trust is the better option.
The Revocable Trust, a popular estate planning tool, is sometimes referred to as “Living Trust” or just “Trust”. It is a legal arrangement established by someone that directs distribution of assets without the need for probate court involvement. It is a Revocable Trust because it is set up during someone’s lifetime and they can change the terms of it at any time while they are alive, if they have sound mind to do so. I compare a Trust to a flower vase. Your assets are the flowers (your house, your bank accounts, life insurance policies, etc.). If your flowers are placed in the vase (the Trust) through beneficiary designations and other means, they will be distributed in accordance with your wishes, without the need for probate court. In most cases, it is truly the best way to avoid probate court.
There are also other types of trusts that may be appropriate to suit someone’s needs. Whether or not you need a Trust is going to depend on your specific assets and circumstances. Please be sure to consult with an experienced estate planning attorney to discuss your options.
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Attorney Jehan Crump-Gibson is the Co-Founder and Managing Partner at Great Lakes Legal Group PLLC, where she concentrates her practice in probate and estate planning, business and real estate matters. Great Lakes Legal Group is a growing black-owned law firm serving clients throughout the state of Michigan and in federal courts across the country. Jehan has served as Faculty for the National Business Institute and the Institute of Continuing Legal Education concerning business, probate and estate planning matters. She is a legal analyst with Fox2 Detroit’s The Noon and the author of the book A Matter of Life and Death.
