Michigan Estate Planning

Is a Casket Required for Burial?

Thu, 17 Aug 2023 19:07:12 GMT

Answer: No. There is no state law in Michigan that requires a casket for burial. However, cemetery rules must be followed, and while there are an increasing number of natural (or green) cemeteries that allow a body to be buried without a casket, many traditional cemeteries still require a casket.

Must a Body be Embalmed Upon Death?

Fri, 11 Aug 2023 20:06:09 GMT

No. There is no state law in Michigan that requires the embalming of a body unless it is to be transported more than 48 hours after the time of death. In addition, if the cause of death was an illness or disease that is listed in the Public Health Code, the body must be embalmed before being transported, regardless of how many hours have passed since the time of death.

Mich. Admin. Health Code R 325.1 and R 325.2

MCL 339.1810(1)(k).

Mich. Admin. Health Code R 325.1 and R 325.2

MCL 339.1810(1)(k)

How Long Does Trust Administration Take?

Thu, 10 Aug 2023 13:31:24 GMT

The length of time to administer a trust varies in each case. However, it usually takes at least five months to complete the process. Creditors have four months from the date that a notice is published in a local newspaper to make claims against the estate. In many cases, a portion of the trust assets are distributed to the beneficiaries while the trust proceedings are still pending.

What Is a "Trust Estate?"

Fri, 04 Aug 2023 20:35:27 GMT

The "trust estate" refers to the property owned by a trust, both before and after the death of a settlor. A trustee only has responsibility for, and control over, the trust estate. Assets may be added to the trust estate by changing the ownership to the trustee, or by designating the trustee as a beneficiary. For example, the owner of life insurance may change the ownership of the policy to a trustee, or designate the trustee as the beneficiary of the policy. In either case, the trustee will acquire control of the policy proceeds upon the death of the owner.

What Is a Trust?

Wed, 02 Aug 2023 17:03:53 GMT

A trust is usually in the form of a written declaration or agreement. The purpose of a trust is to define the duties and responsibilities of a trustee to manage property owned by the trust. The trust may have several purposes, including management of assets for one or more beneficiaries, probate avoidance, or estate tax avoidance. The purpose and intent of the trust should be clearly defined. A trust may be revocable or irrevocable.

Do Wills Avoid Probate?

Fri, 28 Jul 2023 17:18:41 GMT

In short? No.

Wills a nd Probate always go together. MCL 700.3102 states “to be effective to prove the transfer of property or to nominate a personal representative, a will must be declared valid by a register’s order of informal probate or by a court’s adjudication of probate.”

It’s a common misconception that last will and testaments avoid probate, when they in fact go hand in hand. By law, wills must be declared valid in order for the personal representative to formally be nominated and before the effective transfer of property.

How Is an Asset Registered in "Beneficiary Form?"

Fri, 28 Jul 2023 14:13:42 GMT

There are different documents required for each type of asset. Registering an asset in beneficiary form is sometimes as simple as filling out a transfer-on-death form issued by a financial institution. For other items of property, the documentation may be more complex. For example, real estate may be distributed to beneficiaries without probate, but a specialized form of deed is required.

What happens if you forget to remove an ex-spouse as a beneficiary of your life insurance policy?

Wed, 19 Jul 2023 22:42:36 GMT

Michigan law provides an easy escape for anyone who forgets to change their life insurance beneficiaries following a divorce. Specifically, a divorce or annulment automatically revokes any disposition of property to an ex-spouse in a wide variety of "governing instruments", including wills, trusts, annuities, life insurance policies, TOD beneficiary designations, and retirement accounts.

You can rest a little easier if you are divorced and forgot to update your beneficiary forms. But don't let that stop you from contacting your insurance agent or financial planner to make those changes.

Do Irrevocable Trusts Protect Assets from Creditors?

Mon, 17 Jul 2023 14:24:59 GMT

We are frequently asked whether trusts protect assets from the settlor's (i.e. trust owner's) creditors. I previously posted that revocable trusts do not protect assets from from the settlor's creditors. So, what about irrevocable trusts?

The answer is that irrevocable trusts will protect the settlor's assets from creditors -- but with certain limitations. Specifically, Michigan law provides that creditors may only reach the assets of an irrevocable trust up the maximum amount that can be distributed to or for the settlor's benefit. Therefore, even if the settlor is not the trustee, creditors may reach the maximum amount that could be distributed to the settlor according to the terms of the trust.

Asset protection with trusts is the same as in most other scenarios -- if the debtor can reach an asset, then his or her creditors can reach it too. As a result, the most cost-effective asset protection is usually achieved with appropriate amounts of liability insurance.

Reference: MCL 700.7506(1)(c)

Do Revocable Trusts Protect Assets From Creditors?

Mon, 03 Jul 2023 16:21:30 GMT

Answer: The person who creates a trust is a called a "settlor". During the lifetime of the settlor, the property of a revocable trust is subject to the claims of the settlor's creditors. In addition, after the death of the settlor, the property of his or her trust is subject to the claims and expenses of the settlor's estate.

In summary, revocable trusts do not provide any protection for the settlor with respect to the claims of his or her creditors.

Reference: MCL 700.7506

Don't Fall for this "Certified Deed" Scam

Tue, 29 Oct 2019 15:41:51 GMT

Beware of offers to deliver a "certified deed" or other government records.

My client's sister recently passed away. In the course of handling her sister's estate, my client received this letter from a company called the "National Record Service, Inc.". She was prepared to send $59.50 to obtain a "certified deed" to her sister's home. Fortunately, before my client sent a check, I informed her that she doesn't need a certified deed for any reason, and that she could obtain a copy of the deed for a few dollars from the register of deeds' website.

Apparently this scam is fairly widespread. The Michigan Attorney General's Consumer Protection Division recently issued a Consumer Alert to warn of similar scams being conducted across the state. As the Attorney General's office points out, you don't need a third party service to obtain government records for you. Worse yet, a third party cannot "certify" a government record as this letter seems to indicate.

What does Michigan law require you to do when facing a steady yellow traffic light?

Sun, 27 Oct 2019 22:04:05 GMT

We've all been confronted with that split-second decision when a traffic light turns yellow: should I slam on the brakes or hit the gas? Either way, there is always some nagging regret if you stop too soon, or nervously look in the mirror for the officer that saw you fly by. What should you do when faced with a yellow light?

a) Accelerate through the intersection

b) Proceed through the intersection at a safe speed

c) Treat the yellow signal like a stop sign

d) Don't stop if you can get to the other side of the intersection before the light turns red

e) Stop, but only if you can do so safely before entering the intersection

The correct answer is (e) : Michigan law (MCL 257.612(b)) states that "If the signal exhibits a steady yellow indication, vehicular traffic facing the signal shall stop before entering the nearest crosswalk at the intersection or at a limit line when marked, but if the stop cannot be made in safety, a vehicle may be driven cautiously through the intersection."

The interesting thing about this statute is that it contains a subjective standard. Who decides if a stop can be "made in safety"? Only the driver of a vehicle can make that determination based on a number of factors such as speed, road conditions, type of vehicle, traffic conditions, and even the length of the yellow signal. Therefore, if you receive a ticket for disobeying a traffic signal, the obvious defense is that, in your judgment, you could not stop safely based on the conditions present.

Is This The End of Estate Taxes in Michigan?

websitebuilder@1and1.de — Mon, 09 Sep 2019 21:38:23 GMT

House Bill 4922 was introduced on Friday, September 05, 2019. If passed, HB 4922 would repeal the Michigan Estate Tax Act, which has been in existence for 120 years. This would be the official end of "death taxes" in Michigan. However, not much will change in reality because Michigan's estate tax is tied directly to the federal estate tax, and since the federal estate tax exemption is now more than $11 million per person, it touches very few people. Nevertheless, it will be a welcome end to an unnecessary tax in Michigan, and that is something to celebrate.

How to Reduce Your Exposure to Liability for an Auto Accident

websitebuilder@1and1.de — Fri, 26 Apr 2019 00:00:00 GMT

The Michigan No-Fault Act imposes tort liability for bodily injury on both the operator and the owner of a motor vehicle. Therefore, the owner of a motor vehicle is fully liable for bodily injury caused by auto accident, even if they were not driving when the accident occurred. By understanding this simple concept, you can reduce your exposure to liability for an auto accident.

Married couples can reduce their exposure to liability simply by titling each of their motor vehicles in the name of the spouse who drives it most often. If an accident happens while the spouse who owns the vehicle is also operating the vehicle, then the other spouse is not subject to liability. Therefore, by titling a vehicle in the name of only one spouse, married couples can effectively reduce their liability exposure by 50%. Of course, if one spouse is driving a vehicle owned by another spouse, then both of them will be liable for any injury caused to another person involved in the collision.

You might ask whether this makes any difference if both spouses' assets are subject to collection by a judgment creditor. However, Michigan law prevents judgment creditors from seizing a married couple's jointly-owned assets when only one of the spouses is subject to a judgment. This law protects the "innocent" spouse from judgments of the other spouse. Therefore, by limiting potential liability for an accident to only spouse, a married couple can reduce the odds that their assets may be seized by a judgment creditor.

The same principle applies to any vehicle that you own which is frequently driven by another person (a child for example) -- removing your name from the title immediately reduces your exposure to liability for their actions.

Even if you change the title on your vehicle, your auto insurance will continue provide coverage up to the liability limits that you have purchased for insured members of your household. However, limiting your exposure to liability for an auto accident will reduce the chances that you are subject to a judgment in excess of your insurance coverage.

By following these simple tips, you can reduce your exposure to liability for an auto accident at no cost. Nevertheless, it always makes sense to review your insurance limits and coverage with your auto insurance agent.

References: MCL 500.3135(1), MCL 600.6023a

Managing Digital Assets and Communications Under Michigan Law

websitebuilder@1and1.de — Mon, 11 Feb 2019 00:00:00 GMT

What’s new?

Michigan recently enacted the “Fiduciary Access to Digital Access Act” (the (“Act”). The law specifies rules for disclosure of “digital assets” and “electronic communications”.

What is the purpose of the Act?

The term “digital assets” refers to any electronic record in which a user has a right or interest, which includes most online financial accounts. The Act also covers “electronic communications”, which refers to any writing, data, sounds or images that are transmitted electronically (text, email, Facebook, Twitter, etc.). The purpose of the Act is to prescribe who may have access to digital assets and electronic communications after a person dies or becomes incapacitated.

Why does it matter?

Privacy and access are the main concerns. Most people maintain online accounts for their financial accounts and communications. Account owners may now designate a person to manage those assets on their behalf. With respect to digital assets, that person will be an agent under a power of attorney, executor, or trustee. However, access to the content of electronic communications is restricted unless a person is expressly authorized to receive those records.

What should you do? If you have not already so, designate an agent, executor, or trustee to handle your affairs upon death or incapacity, and provide them with the location of your digital assets. If you also want to designate a person to manage the content of your electronic communications, then your documents must contain specific authority for that purpose.