What Does Estate Planning Mean?

Yes, we all have an estate. Your estate consists of everything you own. So, big or small, everyone has an estate and regardless of size, you cannot take it with you when you die.

Planning the Inevitable

When the inevitable happens  you like most people, will probably want to control how those things are devised.  To ensure that your wishes are carried out, you need a plan.  A Plan states who you want to receive  your assets and when.  You will want this to happen in the most tax efficient way possible. 

That is estate planning—making a plan and decisions in advance, naming where you want your belongings to go after you die, and taking steps now to make carrying out your plan as easy as possible later. However, good estate planning is much more than that. It should also answer the following:

  • Who pays the bills if I become incapacitated before I die?
  • Include arrangements for disability income insurance to replace your income if you cannot work due to illness or injury, long-term care insurance to help pay for your care in case of an extended illness or injury, and life insurance to provide for your family at your death
  • Draft a buy/sell agreement.  This provides for the transfer of your business at your retirement, disability, incapacity, or death
  • Select a guardian for your minor children’s care and inheritance.  This ensures crazy Aunt Sally won’t be caring for the children.
  • Provide for family members with special needs without disqualifying them from government benefits.
  • Most importantly, estate planning is a continuous process, not a one-time event. You should review and update your plan as your family and financial circumstances change over your lifetime.
You’re never too Young for Estate Planning

Young adults seem to think they’ll live forever.  Estate Planning is not just for retirees, although people do tend to think about it more as they get older. Unfortunately, we cannot predict how long we will live. Illness and accidents can strike at any age.

Estate planning is not just for the wealthy either, although people who have accumulated wealth may think more about how to preserve it. Good estate planning is often more impactful for families with modest assets because the loss of time and funds as a result of poor estate planning is more detrimental.

Your State Has a Plan for You

If you die without a valid estate plan, any assets owned in your individual name and without a beneficiary designation or other governing contract will be distributed according to your state’s intestacy laws, typically through a court-supervised probate proceeding. In many states, if you are married and have children, your spouse and children will each receive a share, even if your children are from a prior marriage or no longer minors. That means your spouse could receive only a fraction of your estate, which may not be enough to live on. If you have minor children, the court will control their inheritance. If both parents die (e.g., in a car accident), the court will appoint a guardian without knowing whom you would have chosen.  The crazy Aunt Sally scenario again.

An Estate Plan Begins with a Will or Living Trust

A will provides your instructions, but it does not avoid probate. A will only directs how assets titled in your name and without a beneficiary designation or other governing contract will be distributed. The assets must still go through your state’s probate court before they can be distributed to your intended beneficiaries. The process varies greatly from state to state, but it can become expensive with attorney’s fees, executor commissions, and court costs. It can also take anywhere from a few months to two years or longer. In most cases probate proceedings are open to the public, and your creditors and any excluded heirs are notified of their opportunity to file for payment of a debt or a share of your estate. In short, the court system, not your family, controls the process.

Operation of Law

Not everything you own will go through probate. Jointly-owned property and assets that let you designate a beneficiary (for example, life insurance, IRAs, 401(k)s, annuities, and certain other accounts) are not controlled by your will and usually will transfer to the surviving owners or beneficiary without probate. However, joint ownership of assets can create problems and using this method for estate planning solely, is not a good idea. In addition, avoidance of probate is not guaranteed. For example, if a valid beneficiary is not named, the assets will have to go through probate and will be distributed along with the rest of your estate. If you name a minor as a beneficiary, the court will probably require a guardianship until the child reaches the legal age of majority for the state, often between eighteen and twenty-one years of age.

A Trust is Often the Best Choice

For these reasons, a revocable living trust (combined with a pour-over will) is the preferred choice by many families and estate planning professionals. Establishing and funding a revocable living trust can avoid probate at death, prevent court control of assets if you become incapacitated during life, bring all of your assets together into one plan, and provide increased privacy. Because the trust is revocable, it can be changed by you at any time. The accompanying pour-over will is a backup measure in the event that any assets are not funded into your trust during your lifetime and provides that those assets should be poured over into your trust upon your death.

Unlike a probate a trust can continue long after your death. Assets can stay in your trust, managed by the trustee you selected, until your beneficiaries reach the age you want them to inherit or longer. 

Planning Your Estate Can Help You Organize Your Records and Correct Titles and Beneficiary Designations

Planning your estate now will help you locate and organize your information and documents, as well as find and correct errors that may have been overlooked.

Often people do not give much thought to titles and beneficiary designations. Unintended innocent errors can create problems for your family at your incapacity or death. Beneficiary designations are often out-of-date or otherwise invalid. Selecting the wrong beneficiary on Retirement and other tax-deferred plans can lead to devastatingly expensive tax consequences. Correcting titles and beneficiary designations now can save time and taxes for your family later.

Estate Planning Does Not Have to Be Expensive

Pay now or pay later is a true adage when it comes to Estate Planning.  Being too cost conscious may have consequences that you did not intend. The assistance of an experienced estate planner will be able to provide critical guidance and peace of mind that your estate is prepared properly to meet your objectives.

No Time Like the Present to Plan Your Estate

No one likes to think about their own mortality. S, this is precisely why many families are unprepared when incapacity or death strikes. Waiting is not an option. You can put something in place now and change it later—which is exactly the way estate planning should be done.

Help Protect the Ones you Love the Most

Having a properly prepared plan in place  will protect your family and give you  peace of mind. Estate planning is one of the most thoughtful and considerate things you can do for your loved ones.

#Estate Planning #Trust #Wills #Power of Attorney

Theo L. Morson, JD


T.L. Morson and Associates, Pllc

Estate Planning: The Big Disconnect Between the Rich and Poor

    Estate Planning -The Disconnect between the rich and poor.  Like many things in life the lines between the “haves and the have nots” has been clearly defined for many years, decades; well, since the beginning of time.  Society is not structured for everyone to be wealth and prosperous, at least not at the same time.  The United States is no different than other nations around the world when it comes to class warfare.  The rich continue to get richer and the poor continue to get poorer in the ever-increasing divide.  The effective use of Estate Planning and financial education could be one of many answers to bridging that gap.

     Yes, becoming educated about Estate Planning and finances sounds like a simple answer to a very complicated situation.  Regardless of your political persuasion, the answers to help narrow the ever-increasing wealth gap do not lie solely with the government.  Are there inequities in the system in regard to taxes and income distribution? Yes.  Can the government be part of the solution? Absolutely.

     Topics such as Life Insurance, Probate, Wills, Trust, and Powers of Attorney are not totally foreign to most people.  In fact, most people are aware of these terms and have had some dealing with them in the past.  Rich and more well-to-do families are introduced to these topics at much earlier ages and generally have teams of professionals that have assisted their families for generations.

     On the other hand, most working-class people are primarily familiar with Life Insurance and the need for it.  Life Insurance is often available through one’s employer.  However, the amount of insurance provided is normally enough to cover burial expenses and incidentals.   How much insurance should they actually have?

     Let’s say we have a family of four, husband, wife, and two children under the age of 10.  The family has a new home valued at $175,000 with a combined income of $80,000 per year, which comes to $3,333 per person before taxes.  Let’s assume that their total monthly expenditures equal $5000.00.  This leaves the family with $1666.00 per month for savings and miscellaneous expenses.  Sadly, the husband dies.  How much insurance should each have on their lives?

     The answer may surprise you.  The goal of life insurance is to replace what’s lost.  The sudden death of the husband leaves the family with $40,000 less in income per year.  A $1.4 million dollar policy received tax-free and invested to earn 3% per year would yield $42,000 per year before taxes on the income.    So, the family would need this amount of coverage on both husband and wife to provide the minimum amount of coverage and income replacement.  Future educational cost and inflation will actually require additional coverage.  There are many variables to consider and this is just one approach and insurance may be utilized in different ways.

     This is just one small example of how a little bit of information can go a long way.  The same is true in regard to knowing the differences between Wills and Trusts; how to fund a trust; how to name beneficiaries, how to avoid creditors and so on.  These are all questions and decision that can make a tremendous difference in terms of what you leave to your children.

     Everyone needs some sort of Estate Plan.  Of course, some plans will undoubtedly be more complicated than others.   And the cost for planning is much more reasonable than most people think.  An Estate plan can run from as little as $200 dollars to as much as $5000 dollars depending on the amount of time and work that goes into preparing the plan.

     It’s easy to think at 22 or 23 years of age that you have plenty of time to prepare your estate.  But Estate Plans are not just about money and who gets what when you die.  An Estate plan also answers very important questions such as, who’s going to make medical decisions for me when or if I can’t? Who’s going to pay my bills?  Who’s going to take care of my small children? Court appointed crazy Aunt Sally? Or responsible, loving Cousin Jane?  These are all items that can and should be addressed in a comprehensive Estate Plan.  This is only the tip of the iceberg.  This short article doesn’t even discuss accounting and financial services needs.

     Yes, there is a tremendous divide between the haves and the have nots.  Money plays a tremendous role in why this division exists.  However, the phrase, “A fool and his money shall soon part” holds very true.  There are many people who start out wealthy and don’t end up that way.  Look no further than some professional athletes.

    Estate Planning -The Disconnect between the rich and poor.  Knowledge is the key to helping solve this great divide.  Surround yourselves with a team of professionals and let’s start to teach our child the value of planning.  Without knowledge the mistakes of the past will be the same mistakes in the future.

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Theo L. Morson, JD, LLM

Estate Planning Specialist

T.L. Morson and Associates, PLLC


Choose Your Life Insurance Beneficiaries Wisely

One of the most import estate planning decisions that one makes is choosing Life Insurance beneficiaries.  Naming who should get money after you die sounds like a simple and easy task; however, Life Insurance mistakes are common and can have devastating results.

Let’s examine several common mistakes made in regard to Life Insurance:

Naming a minor child

Life Insurance companies will not make direct payment of Life Insurance to minors until age 18.

Failing to plan in advance could be costly and time consuming once the courts get involved.

Beneficiary Designation Trumps a Will

It’s important, however, to know that regardless of what your Will says, the life insurance money will be paid to the beneficiary listed on the life insurance policy. That’s why it’s important to contact your insurer to change your beneficiary, if needed.

Always Name Contingent Beneficiaries

Life Insurance Beneficiaries often predecease the insured.  Failing to name a contingent beneficiary could lead to complications. 

  • Heirs could face delays is getting the money.
  • The life insurance proceeds, which normally would be protected from creditors, can now be open to creditors’ claims.

Making a Dependent Ineligible for Government Benefits

Federal law sets guidelines limiting the amount of gifts and inheritance that a recipient may receive.  Naming a lifelong dependent, such as a child with special needs, as beneficiary puts the loved one at risk for losing eligibility for government assistance. 

Establishing a special needs trust and naming the trust as beneficiary could be the answer.  Contact our office to see if a special needs trust is an appropriate solution for your situation.

Update, Update, and Update

You should review your policy every year and after major life events, such as marriage, having children or divorce. Change your Life Insurance beneficiaries when circumstances change.

Unfortunately, many people forget to do so. These are only a few of the common mistakes that clients make in regard to Life Insurance.  Don’t wait until it’s too late.  Estate Planning is not for you, it’s for the ones you leave behind.  Help protect the ones you love the most.

#Life Insurance #Estate Planning

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COVID Round Three

COVID round three. And cases spike across the nation for the third time this year.  Cases continue to grow and state are struggling to provide care. Unfortunately, the spread this time is from coast to coast and far worse than the spikes experienced in the Spring and Summer.  With COVID round three close to 250,000 Americans have lost their lives to this deadly virus with that number expected to exceed 300,000 before all is said and done. The unprecedented loss of life is expected to exceed that of all the wars fought by this nation combined. Unfortunately, the worse is yet to come.

Exciting news from pharmaceutical giants Pfizer and Moderna about the development of vaccines that could start arriving as soon as December has provided a glimmer of hope for the nation.  This exciting news is tempered, however, by forecast that the vaccine will not be available to the vast majority of Americans until the late Spring, early Summer barring any delay in the distribution.  Some states have starting to institute restrictions in an effort to avoid shutdowns that have devastating economic and social effects.

Covid round three

Estate Planning Check-up

Now more than ever is the time to start or revisit your estate planning needs.  Estate Planning is more than just a Will or Trust.  Estate Planning is a comprehensive plan that evaluates all aspects of your Estate, Tax, Life Insurance, and succession planning needs.  Failing to plan in one area can have dire consequences in others. An Estate plan is not for the living, it’s for the ones we leave behind.

At T.L. Morson and Associates, with over 25 years of experience, we are uniquely qualified to handle all aspects of your Estate Planning needs.  Life can change in the blink of an eye, call today for your free consultation.

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Change with The Times

Life can and often does change in the blink of an eye.  Whether you’re planning a wedding of starting your family it’s essential that your Estate Plan change with your life.  So, if you’ve recently married, divorced, started a new business, or purchased your dream home, reviewing your Estate Plan today can save your loved one’s time and money tomorrow.

So, Estate planning is not just for the wealthy. Good estate planning is often more impactful for families with modest assets because the loss of time and money as a result of poor estate planning is more detrimental.

A will provides your instructions, but it does not avoid probate and will only direct how your assets are devised. The assets must still go through your state’s probate court before they can be distributed to your intended beneficiaries. The process varies greatly from state to state, but it can become expensive with attorney’s fees, executor commissions, and court costs. It can also take anywhere from a few months to two years or longer. In most cases probate proceedings are open to the public, and your creditors and any excluded heirs are notified of their opportunity to file for payment of a debt or a share of your estate. In short, the court system, not your family, controls the process.


Call today to schedule a free consultation

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Trust of Will ?

Estate Planning Document

Deciding whether to draft a Trust or a Will is an individual decision and should be made on a case by case basis with an Estate Planning expert.  Here are some facts about both Trust and Wills that may help make your decision a bit easier.

Compare and Contrast

Yes, most of my clients with larger estates select a Trust over a Will as part of a complete estate plan. Wills, however, can be an excellent fit for the right client.  Some of the reasons include:

  • Trusts bypass probate.  Probating an estate is not as expensive as some people make it out to be.  The overall cost varies greatly depending on the jurisdiction, size, claims, and whether challenges are made.  Drafting a Trust allows you to select successor trustees, either individuals or corporate to carry out the terms of your Trust.
  • Trusts are not public.  Probate is a public process.
  • Wills are used to devise an estate.
  • Trusts also devise an estate; however, Trusts provide the Grantor greater flexibility and control.  Trust give the Grantor has the ability to “pull strings” from the grave. This means the Grantor may set terms as to how assets are devised to their beneficiaries.  For example, the Grantor may state that 50% of a beneficiary’s inheritance is payable immediately and the remaining 50% is payable after she graduates from college.
  • Trust are used for Estate tax planning for larger estates.
  • Size matters – for individuals with smaller estates a simple Will may do the trick.  Establishing Transfer of Death Agreements for bank and brokerage accounts allow assets to transfer by operation of law to beneficiaries thus bypassing the probate process.
  • Cost – the cost of drafting a Trust can be more than twice that of drafting a Will.  Though drafting a Trust is more expensive upfront, the added cost of probating a Will could significantly reduce the cost difference.

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What COVID -19 has Taught US

What COVID -19 has Taught Us About Estate Planning? So, as the COVID-19 Pandemic sweeps its way across the United States, over 50% of all Americans still do not have an estate plan. This has struck a resounding alarm.  But, most people recognize the importance of planning their estate. However, most people also believe that they have plenty of time and that estate planning is something that they should do much later in life.  But, the fact is that estate planning is relevant at all stages of adult life, regardless of age.


An estate plan is not just for the living,  an estate plan is mainly for the loved ones we leave behind.  Dying without a Will or Trust means that you have left important decisions for the court to decide which may be contrary to your personal wishes.  Who will care for your children? Where will they live? How will their college needs be met?  These are all questions that a complete estate and financial plan can help address.

Tomorrow is not promised to any of us.  An estate plan can range from simple to quite complex depending on your particular circumstances.  The average estate plan can cost from $500 – $2,000 and can be completed in as little as a week. A comprehensive Estate Plan will include a Trust, Will, Powers of Attorney for health and finances, HIPPA agreement and more. All plans are tailored to your specific needs.  Life can change in just the blink of an eye. Don’t leave your loved ones unprotected. So, What COVID -19 has Taught Us About Estate Planning? Take care of the ones you love the most. Call Today to schedule your free no obligation consultation.

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Take care of the ones you love the most

For the ones you love

In the Blink of an eye life can change forever. Estate Planning is not only for you, An Estate Plan is more for the ones we leave behind. Take care of the ones you love the most.

However, we know two things are certain; death and taxes.  Despite these uncertainties, over 50% of people fail to plan for the inevitable. Because of this failure, a countless number of estates find themselves in the time consuming, expensive, and public process known as Probate.

Estate Plan is one of the most important and thoughtful decisions you can make. The purpose of an Estate Plan is not just to tell the government how to distribute property after your death. An Estate Plan is a way to maintain control over your affairs while alive and after you pass away. So, an Estate Plan allows you to protect your assets and help you and your family maintain your current lifestyle.

The amount of planning required will vary from client to client.  The objective of any Estate Plan is to transfer wealth to the next generation in the most tax efficient way possible.

At T.L. Morson and Associates we specialize in Estate Plans and Wealth Transfer Plans that are customized to meet the needs of each client.  This means our plans are designed specifically for you and the needs of your family.

Take care of the ones you love the most. Call Today for your free no obligation consultation.

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Why Buy/Sell Agreements Matter

Why buy/sell agreements matter

The majority of businesses created in the United States are small businesses. Therefore, many of these companies are not publicly traded and thus create the need for Buy/Sell agreements.

Closely-held businesses are formed as LLC’s, Partnerships, or C-Corporation. So, determining the value of a closely held corporation is challenging. Large publicly traded corporations do not face this issue since their value is determined by the markets daily.

Major Concerns of Closely-Held Small Business

The greatest issues facing Closely-held businesses is succession. Therefore, Buy / sell agreements are used for the transition of ownership when a partner dies, retires, or exits the business.

Types of Buy/Sell Agreements 


The remaining owners purchase the shares of the business at a predetermined price.

Redemption Agreement

The business entity buys the share of the business.

Life insurance is also used to fund Buy/Sell agreements. These agreements are tailored to the needs of business owners. The use of Life Insurance is the most common method.

So, planning for the transfer of business assets demands the same degree of attention as planning your personal estate. So, succession plans should be reviewed when you review you estate plan. The same life events apply.

Act Now!

Planning today will save time and eliminate uncertainty.   Because, death, divorce, and retirement will occur at some point in all businesses.  Having a plan in place is essential to the long-term survival of a business.

The amount of planning required will vary from client to client and business to business.  So, you won’t find a cookie cutter approach at T.L. Morson and Associates. The objective of any plan is to transfer wealth to the next generation in the most tax efficient way possible.

Life can change in the blink of an eye.  Having your affairs in order is not just for you, it’s for the ones you leave behind.  A comprehensive plan is more than just the drafting of documents.   A well-constructed plan requires expert knowledge of tax and finance.

The T.L. Morson team brings a wealth of knowledge in the areas of Estate Planning , Business Consulting, and Accounting Services.

Theo L. Morson, JDLLM – Mr. Morson holds a bachelor’s degree in Accounting, a Master of Laws Degree specializing in Corporate Law and Finance, and a Juris Doctor (JD) Degree from Western Michigan University Cooley Law School. Theo has worked as a Financial Consultant and Accountant for 25 years.

Call today to Schedule a review today!

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The Time to Act is Now!

April 24, 2020

The Time to Act is Now!

The time to act is now. We hope this post finds you and your family staying home and staying safe.  It’s amazing how fast times can change in such a short period of time. Thousands of Americans have tragically loss their lives in just the past few months from Covid-19 virus. Michigan is one of the hardest hit states in the country. The nation is being tested and there is no end in sight.

50%of Americans are Unprepared

Times like this that remind us of the need to prepare for what will eventually happen to all of us, death and taxes.    A recent study conducted by Merrill Lynch found nearly half of all American’s over the age of 55 still do not have a Will.  To make matters worse, only 18 percent of people in that age range have all of the recommended legacy plan essentials: a will, a health care directive, and durable power of attorney.

Often times when the topic of estate planning comes up people often think that they cannot afford an estate plan or that a Will is more than enough to satisfy their needs.  However, two of the most essential pieces to a complete estate plan are a health care directive and durable power of attorney.  A Power of Attorney is essential if you become ill and unable to make medical and financial decisions. 

T.L. Morson and Associates provides a full range of estate planning services. Our services include Wills, Trust, Powers of Attorney for Health, and Durable Powers of Attorney.  Documents do not complete an effective estate plan.  Advice and experience does.  Contact us for your free consultation.

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