Michigan Estate Planning Lawyer Blog

President Obama's campaign proposal was to freeze the 2009 Federal Estate Tax at $3.5 million exemption.  Meaning, anything less then $3.5 million could be passed Federal Estate Tax Free.  Many estate planning lawyers were wondering whether, with the state of the economy, he would push to maintain the $3.5 million exemption or lower it.

Well, with the release of his budget proposal, President Obama may be tipping his hand, that yes, he is indeed still planning to still freeze the Federal Estate Exemption at the 2009 levels.  In Footnote 1 of table S-5, there is a line that states "In continueing the 2001 and 2003 tax cuts, the estate tax is maintained at its 2009 parameters."  Also, at several other passages, the proposal hints at the 2009 exemptions, notably in footnote on pg 121 and the projections on 117 and 119.

Granted, this is not a tax bill yet, but it does give us Michigan estate planning lawyers a heads up that President Obama is still maintaining his campaign promise of freezing the 2009 Federal Estate Tax exemption amount.

You can read the proposal here.

Much thanks to the ABA Estate Planner's and Administrator's Discussion listserve.

-Christopher J. Berry, Esq.
Michigan Estate Planning Attorney

Today I was opening an Oakland county probate estate, more specifically an informal unsupervised estate.  Informal unsupervised proceedings are generally the norm when opening a probate estate.  This type of estate is generally handled by the probate register with little to no time in front of an actual probate judge. 

An informal proceeding is started by a Michigan Probate lawyer filing an Application for Informal Probate and/or Appointment of Personal Representative, along with the other introductory papers on behalf of the person to be appointed personal representative.  The purpose of the application is to admit the will and appoint a personal representative.

If the application is granted the probate register will sign a form called a Register's Statement showing formal admitance of the will and appointment of the personal representative.

The appointed personal representative then becomes qualified to act once they have accepted appointment and provided any required bond.  The personal representative then continues along handling and administering the estate along with the aid of a Michigan probate lawyer until the estate is closed.

-Christopher J. Berry, Esq.
Michigan Probate Lawyer

In Michigan, when you are the personal representative of a decadent's estate, handling the Michigan probate court system and Michigan estate administration, a common question is to what information is the personal representative entitled to?

A personal representative is only entitled to handle assets that are passing through the Michigan probate court system.  Most life insurance will avoid Michigan probate due to having a named beneficiary.  However, if the there is no named beneficiary for the life insurance then the personal representative may have to include the account in probate and put the information on the probate inventory.

We help our clients avoid the Michigan probate process by setting up revocable living trust based Michigan estate plans. When necessary or referred to us, we assist our clients with handling Michigan probate estates in Wayne, Oakland, Macomb, and Lapeer counties.

-Christopher J. Berry, Esq.
Michigan Probate Lawyer

"How Long does a Michigan Probate take to complete?"  Many of our clients ask how long the process will take.  Just like the good lawyer I am, I answer "it depends."  What I do know is that at the very earliest the process will take at least 5 months after appointment of a persona representative.

There is quite a bit going on during those 5 months, which is the earliest not the average time of a Michigan probate of an estate.  In that time a personal representative is appointed, notice is sent to interested parties, claims period runs with newspaper publication, etc.

One of the reasons many of our clients opt for a living trust based Michigan estate plan is to avoid the Michigan probate system.  Our clients do not want to be involved in the lengthy, time consuming Michigan probate system.

-Christopher J. Berry, Esq.
Michigan Probate Lawyer | Michigan Estates Lawyer

Estate Planning Strategies: Collective Wisdom, Proven Techniques, the book I have been working hard on has been published and is available on Amazon.  Estate Planning Strategies: Collective Wisdom, Proven Techniques was co-authored by my colleagues and I, estate planning lawyers across the nation.

In this new book Estate Planning Strategies: Collective Wisdom, Proven Techniques we, estate planning attorneys, have outlined essential estate planning strategies for everyone, no matter level of wealth, in easy-to-understand language, Estate Planning Strategies: Collective Wisdom, Proven Techniques helps people comprehend the entire estate planning process from start to finish.

Estate Planning Strategies: Collective Wisdom, Proven Techniques is a great reference book for all professionals. The chapter I wrote on Testamentary capacity is particularly important since it is so frequently misunderstood.

Estate Planning Strategies: Collective Wisdom, Proven Techniques explains:

• Introduction to Estate Planning
• How to Avoid Probate
• Estate Planning for Business Owners
  
• Property Ownership
• Estate Planning Documents and Drafting Issues
• Avoiding Probate and What Happens after you Die
• Estate Tax Principles
• Avoiding Estate Tax With Lifetime Transfers
• Charitable Trusts
• Revocable Living Trusts
• Life Insurance
• Retirement Plans
• Business and Investment Interests
• Asset Protection
• Other Considerations in Estate Planning including Elder Law, Bert Trusts, Pet Trusts, etc.
  

-Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer

Many of our Michigan estate planning clients are concerned about the Federal Estate Tax or "death tax".  This is especially important for small business owners, as the estate tax can cause small business owners to sell their business due to the cash needs in an estate.  The following is a year by year account of how the Federal Estate Tax has changed over the years.

• 1797- First Federal Estate Tax enacted to help fund naval build up.
• 1802- Federal Estate Tax is repealed.
• 1862-Federal Estate Tax reenacted to help pay for Civil War.
• 1870- Federal Estate Tax repealed.
• 1898- Federal Estate Tax reenacted to pay for Spanish-American War.
• 1902- Federal Estate Tax repealed.
  
• 1916- Federal Estate Tax reenacted with a 10% tax rate.
• 1941- Federal Estate Tax maximum tax rate increased to 77% to help fund World War II.
• 1976- Carryover basis rule enacted.
• 1980- Carryover basis rule repealed.
• 1981- Increased Marital Deduction and Unified Credit.
• 1993- Federal Estate Tax maximum rate increased to 55%.
• 1997- Phase-in of the $1 Million Exemption for farmers and business owners.
• Between 1981-199- 126 New estate tax laws enacted, an average of 7 per year.
• 2001- Phase out of Federal Estate Tax and Generation Skipping Tax, with modified Carryover basis rules, effective in 2010.

The moral of the story?  The laws are constantly changing.  They are going to change again this year, in 2009.  Will we freeze the current $3.5 Million exemption?

-Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer

As a Michigan estate planning lawyer it seems like a couple times a month  I run into the issue where a parent has named a child on their deed to their property so that the parent creates a joint tenancy with rights of survivorship.  More often than not this leads to problems down the line.  People think this is effective Michigan estate planning, but it often just leads to a messy administration.

Let's look at a hypothetical, a husband named his second spouse and daughter (the wife's step daughter) as joint tenants with rights of survivorship.  Well now the husband has passed away, leaving the surviving wife and her step daughter who she doesn't speak to as joint owners.  If the surviving wife wished to sell the property, she would have to get the step daughter's permission since she is a joint owner.  Maybe that was the husband's wishes, maybe not.  We don't really know.

So, some problems of joint tenancy with rights of survivorship in Michigan are:

• Once you place property into joint tenancy, you cannot change your mind.  You can only make changes if you can negotiate or persuade the other joint tenants to follow your wishes.
• You no longer control the whole property.  The other joint owners now have as much legal right to the property as you do.
• Anyone you are on a deed with jointly opens you up to the claims of their creditors.

Joint tenancy is fraught with issues, and as a Michigan estate planning lawyer, I see too many people using it as their "estate plan" when they do not understand the ramifications.

-Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer

The next celebrity estate plan we will look at is Benjamin Franklin.  Big Ben had a Will and provided for numerous gifts.  However, Benjamin Franklin could not assign his copyrights to things such as Poor Richard's Almanac.  The reason for this was there were not yet any copyright laws to protect or recognize those rights.

It is interesting that he had revoked many previous WIlls.  Also, in one of the Codicil's to his Will, he mentioned that he got nothing from his parents and therefore his children should get nothing from him.  He, instead, made some charitable gifts.

As a Michigan estate planning lawyer, I have seen clients who have had similar estate planning desires, such as leaving a chunk of their estate to their church or the Michigan Humane Society.

You can read Benjamin Franklin's Will here.

-Christopher J. Berry, Esq.
Bloomfield Hills Lawyer

Suze Orman has a number of financial and estate planning books and kits on the market, including the Suze Orman Living Trust Kit.  Many estate planning lawyers and financial professionals have came out against her generalized advice.  Well, count James Scurlock as another that recognizes the ills of Suze Orman's advice.

In his post which you can read in it's entirety here.  Mr. Scurlock goes on:

"Suze, my friends, has been lying to us, and we know she knows she's been lying because she herself tells us that she ignores her own advice."

As a Michigan estate planning lawyer, I am worried when people follow her advice, which at best is too generalized for clients, and at worst would be legal malpractice if I told my clients what she advises.

-Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer

The Michigan Court of Appeals heard an interesting case as it relates to Michigan Probate and Michigan Estate Planning.  As a Michigan probate lawyer, it is important to stay on top of the latest case decisions.

In Tkachik V. Mandeville decided Feb 5, the Michigan Court of Appeals decided that even though a husband and wife had been separated for 18 months, the title of the property, which was held in tenancies by the entireties, remains intact.  Therefore, the property passes to the surviving spouse.

The court rejected the plaintiff's argument that a decedent's spouse's estate can sue the surviving spouse for contribution for expenses made related to the entireties property based theory of unjust enrichment.

In other words, the court reinforced, that how your assets are titled controls.  It is important to review titling of your assets, such as house, bank accounts, IRA's with your Michigan estate planning lawyer, otherwise there could be unintended consequences.

-Christopher J. Berry, Esq.
Oakland County Probate Lawyer

As a Michigan estate planning lawyer, I am always interested in what the rich and famous in history have done for their estate plans.  First, let's look at our first president George Washington's estate plan.

George Washington used a precursor to an A/B Will.  President Washington's will anticipated the beginning of the Federal Estate tax and planned around it with an A/B Will.  He gave outright to his wife, then gave a life estate to many others for some of his property.  Also he freed his slaves in his estate plan.

You can read President Washington's will here.

-Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer

In Michigan Estate Planning 2009 Tip #1, I talked about whether you have updated your financial power of attorney.  Michigan Estate Planning 2009 Tip #2 covers reviewing your revocable living trust.

Most of our estate planning clients have executed a Michigan revocable living trust for the usual probate avoidance and greater control benefits versus just executing a Michigan will.  One of the important keys when you execute a Michigan revocable living trust is to make sure the living trust is properly funded.

Any assets that are not funded into the trust will not avoid Michigan probate, which is one of the main reasons for setting up a revocable living trust.

With our clients, we offer an annual program called Foundations, where we meet with clients on an annual basis to ensure that all of their accounts and assets are properly funded into their trusts.  This process makes sure that our clients achieve their goal of avoiding probate.

So, in 2009, have you met with your Michigan estate planning lawyer to review your estate plan and make sure all of your assets that should be funded into the trust have been funded?

-Christopher J. Berry, Esq.
Detroit Estate Planning Lawyer

I recently attended an Oakland County Bar Association meeting of the Probate, Estates and Trusts Committee.  This is a group of Oakland County estate planning lawyers that meets monthly to discuss current Michigan probate, Michigan estate planning and Michigan elder law issues. The featured speakers were Jean Barnas Haratsaris and Marc Berke from the Alzheimer's Association.  It was a great meeting that raised my awareness of the disease, its warning signs and some steps we can all take to reduce the chances of getting the disease.

 

 The ten warning signs are:

1. Memory Loss.

2. Difficulty performing familiar tasks.

3. Problems with language.

4. Disorientation to time and place.

5. Poor or decreased judgment.

6. Problems with abstract thinking.

7. Misplacing things.

8. Changes in mood or behavior.

9. Changes in personality.

10. Loss of initiative.

 

Now Jean and Marc were quick to point out that we all forget were we put our keys sometimes and that doesn't mean we are developing Alzheimer's.  Recognizing these signs however could mean a quicker diagnosis and treatment which can slow the disease's progression.  The best way to reduce your risk is to eat what most of us have come to know as a heart healthy diet: eat lot's of colorful foods including those containing Omega Three and watching our weight, cholesterol, blood sugar and blood pressure.   

 

If someone you care about has begun to show signs of dementia it is important that their estate plan be reviewed by a Michigan estate planning attorney.  If changes are necessary it is crucial they are done while the person still has capacity.

 

-Michael Witzke, Esq.

Bloomfield Hills Estate Planning Attorney

Have you updated your Michigan financial power of attorney recently?  If your financial power of attorney is more than a few years old there have been problems with banks and other financial institutions accepting the financial power of attorney due to bank policy.

They have no legal ground to stand on, but it is often easier to visit your Michigan estate planning lawyer on an annual basis to review and update your financial power of attorney and other Michigan estate planning documents then to take the bank or financial institution to court to enforce the documents.

-Christopher J. Berry, Esq.
Bloomfield Hills Estate Planning Attorney

When a loved one has recently deceased, it is important to contact your Michigan estate planning lawyer or Michigan probate lawyer before you begin to handle any Michigan estate administration.  Otherwise the creditors of your deceased loved ones can coerce you into paying debts that you or the estate may not be liable for.

There has been an online report of Bank of America deliberately, doing just that. They are misleading individuals to pay the debts of recently deceased parents.  You can read the alleged exchange between Paul Kelleher who had recently lost his mother and a Bank of America rep.

Paul Kelleher: Yes, I'm calling to inform you that my mom died on the 24th of January.

Bank of America Estates representative: I'm sorry. Oh, it looks like she never even missed a payment. That's too bad. Well, how are you planning to take care of her balance?

PK: I'm not going to. She has no estate to speak of, but you should feel free to just go through the standard probate procedure. I'm certainly not legally obligated to pay for her.

BOA: You mean you're not going to help her out?

PK: I wouldn't be helping her out -- she's dead. I'd be helping you out.

BOA: Oh, that's really not the way to look at it. I know that if it were my mother, I'd pay it. That's why we're in the banking crisis we're in: banks having to write off defaulted loans.

Continue reading "Bank of America Deliberately Tricking Children into Paying Parent's Debts" »

A 93 year old Bay City, Michigan man passed away because he was in arrears on his electric bill and froze to death when the power company shut off his power last month.

It turns out Marvin Schur has left $600,000 to the Bay Regional Medical Center in his will.  While his death happened under odd and unfortunate circumstances his Michigan estate plan makes sense and shows the good a person can do through Michigan estate planning.

Mr. Schur was an Army medic who was saving lives during his service.  His nephew states in the Detroit Free Press article "He led a nice life, except for his tragic ending. With his contribution to the hospital, he'll still be helping people save lives. He'll be doing it in death."

-Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer

When preparing a Michigan special needs trust or Michigan supplemental needs trust for an individual who is receiving governmental benefits, it is important to keep in mind how assets are titled.  A key is to review the beneficiary designations so that the assets that are supposed to be funded into the Michigan special needs trust are properly designated. 

It is important to have a Michigan special needs trust lawyer review those designations with you on a regular basis.

Jacksonville estate planning lawyer, David M. Goldman, has prepared a list of common assets that should be reviewed when you have a special needs child.  You can read his post Common Asset to Review With a Florida Special Needs Trust.  While David M. Goldman is an Florida estate planning lawyer, his points remain true in Michigan as well.

-Christopher J. Berry, Esq.
Michigan Special Needs Trust Lawyer

The Michigan Court Rules that apply to Michigan Probate and Estate Planning procedure will be undergoing some minor tweaks effective May, 1 2009.  The amendments will be effecting Michigan Court Rules 5.105, 5.125, 5.206, 5.302, 5.306, 5.307, 5.309, and 5.403 along with a new rule Michigan Court Rule 5.411.

The Michigan Institute of Continued Legal Education has provided the full text to the amendments here.

Briefly, new Michigan Court Rule 5.411 provides that all conservatorships with unrestricted assets may require bond to be set by the court in an amount the court deems necessary to protect the estate or as required by statute.  The new court rule also states that no bond shall be required of trust companies organized under Michigan law or banks with trust powers, unless the court deems otherwise.

Christopher J. Berry, Esq.
Michigan Probate Lawyer

As a Michigan estate planning lawyer, we help our clients plan for their pets through the use of pet trusts.  Especially for our clients that are horse owners.  Many people when the plan their estate do not thing of the ramifications for their pets.  Our clients do not want to see their pets euthanized, therefore they plan for the pets in their estate planning with a Michigan pet trust.

A San Diego estate planning lawyer and colleague of mine, Roy M. Doppelt at Pinkerton, Doppelt, & Associates, LLP wrote a great article about the 7 Reasons to Have a Pet Trust.

His same reasoning applies in Michigan as well.  Especially his point about the necessity for a trust that takes into account horse ownership, known as a pet trust.  Owning a horse can be a complicated, expensive, yet rewarding experience.  That said not everyone has what it takes or the resources to properly care for a horse, if you were unable to.

Read San Diego Estate Planning Lawyer, Roy M. Doppelt's entire article on 7 Reasons to Have a Pet Trust for more informaiton on why having a pet trust is important for pet owners.

-Christopher J. Berry, Esq.
Michigan Pet Trust Lawyer