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August 2020 Newsletter

August 10, 2020

Dear Clients and Friends,

These are difficult times and I hope you are all safe and well. We continue to manage our office in the safest way possible. We only have one client or a couple in the office at any given time. All tables, desks, and chairs are sanitized between each appointment. Masks are worn by everyone at all times. We do as much as we can over the phone or by email. If you or a friend needs help with a new estate plan or to review an existing plan, we can help and stay safe at the same time.

Please do not hesitate to have your free annual review. Call Melissa to set up an appointment, and let her know whether you would like it in person or on the phone.

Secure Act

An earlier email told you about the Secure Act that was effective January 1, 2020. The major rule change was for inherited IRAs where the beneficiary was not a spouse. The old rule allowed the non-spouse beneficiary to “stretch out” distribution, and therefore tax payments, over their lifetime. The new rule allows the stretch over only 10 years. For a minor child beneficiary, the stretch is to age 18 and then 10 years.

The Act moved the starting age to age 72 and also declared that you do not have to take your RMD in 2020 if you do not want to. If you did, you may return it and therefore will not be taxed on it. For details on returning your 2020 RMD, contact your IRA custodian that sent you the money.

Charitable Contributions

The CARES Act, passed earlier this year, increasing the amount an individual can deduct if they itemize their deductions. The new amount is up to 100% of their AGI.

However, this new law does not impact most taxpayers. More than 90% of taxpayers no longer itemize deductions since the increase in standard deductions. This resulted in a drop in charitable contributions. Many people reduced or eliminated their charitable contributions once they lost the charitable deduction.

The good news is that there is now an opportunity to not itemize but to deduct up to $300.00 ($600.00 per couple) in cash charitable contributions starting in 2020. Yes, you can take this deduction for charitable contributions even if you do not itemize your other deductions.

The other way to give to a charity and receive a tax benefit is to have all or a part of your RMD sent to a qualified charity by your IRA custodian. You do not get a deduction but you are not taxed on the RMD. That is just as good.

Unmarried Couples

This month I was given another “disaster” estate to probate. The decedent left a “significant other”. They had lived together for over 20 years. He had no will leaving her anything. She was the beneficiary of his IRA and will receive that. All other assets were in his name or her name only. His assets, including the house, will go through probate and be distributed under the laws of intestacy to his next of kin.

She will get nothing from the estate. Michigan eliminated common-law marriages in 1957. She is left with no home and ongoing arguments with the next of kin about whether the household furniture and furnishings were his property or hers.

Important: If you are an unmarried “significant other”, or know someone who is, protect your future. Create an estate plan with ladybird deeds, wills, and beneficiary designations. It is traumatic enough to lose a loved one. It’s even worse if you find yourself homeless as a result.

Avoiding Probate with Joint Property

If you have attended my seminars, you have heard me explain how assets held jointly will avoid going through probate on death along with assets that have a beneficiary or assets that are titled to a trust. However, I caution against the use of the joint property for anyone other than husbands and wives. When you add a child’s name or other non-spouse’s name to your bank account or real estate title, you make that person an equal co-owner. As such, they have the ability to go to the bank and clean out the account. If they are joint on a deed, they cannot sell the property without you signing off, but you cannot sell the property without them signing off. I had a client in Livonia who added her daughter’s name to her house deed after her husband died. Twenty years later, she told her daughter she was going to sell the house to move to assisted living and would need for her daughter to sign the deed to the new buyer. The daughter refused to sign the deed to the new buyer. She told her mother, “If I sign the deed, you will spend the money. If I don’t sign the deed, then when you die, I will get the house.” Now, I am sure that most of us trust our children will not do anything like that intentionally. However, they may do something unintentionally that could result in a lien being placed on your house. If your child files bankruptcy, then the court could put a lien on your house. If your child is sued, perhaps for business debt or an automobile accident, and loses, the winning party can put a lien on your house.

While these events might be remote, taxes on the sale of the asset are not. When a child sells real estate, stocks, or mutual funds received from a parent, they must pay tax on the gains. The gain is calculated by subtracting the “cost basis” from the sales price. If your child inherits the real estate, stocks, or mutual fund at death, then the cost basis is the value on the date of death. If the real estate, stocks, or mutual funds were made joint during your lifetime, then your child’s cost basis is your cost basis, or what you paid for the property. For example, suppose you paid $80,000 for your home and it was worth $200,000 when you passed away. If the home was made joint while you were alive, your child would have again and pay taxes. If your child inherited through a trust or by being a beneficiary, then your child gets a “step-up in basis” on death to $200,000. If sold for $200,000, then there is no tax due.

In summary, although joint property will avoid probate, it is better to use a trust or beneficiaries to avoid probate. Check all your assets that have a title. Each title should be joint, or have a beneficiary, or be part of a trust. Consider making any title that is joint with someone other than your spouse to be titled in your own name and add a beneficiary.


All of the senior centers and libraries that had previously scheduled seminars this year have requested that we resume the seminar schedule in August. Here is the current schedule:


All seminars will be at 10:30 am

Northville Community Center: 303 W. Main St. Northville, MI 48167

Please call (248) 305-2851 to reserve a seat

August 18

Wills, Trusts, and Ladybird Deeds

September 15

What you need to know about 401ks, IRAs

October 20

Wills, Trusts, and Ladybird Deeds

November 17

New Laws Affecting your Estate Plan

December 15

What You Need to Know about LTC and Medicaid


All seminars will be at 1:30 pm

Plymouth Friendship Station: 42375 Schoolcraft Plymouth, MI 48170

Please call (734)354-3222 to reserve a seat!

August 27

Wills, Trusts, and Ladybird Deeds

September 24

What you need to know about 401ks, IRAs

October 22

New Laws Affecting your Estate Plan

November 12

Wills, Trusts, and Ladybird Deeds


All seminars will be at 1:00 pm except September 18 at 10:00 am

Westland Friendship Center: 1119 N. Newburgh, Westland, MI 48185

Please call (734)722-7632 to reserve a seat

August 20

New Laws Affecting your Estate Plan

September 18

Wills, Trusts, and Ladybird Deeds

October 15

What You Need to Know about LTC and Medicaid

November 19

Wills, Trusts, and Ladybird Deeds


Many of you have been kind enough to listen or even to ask about my wife and her battle with cancer. Her struggles began in January of 2019, leading to the discovery of uterine cancer, lymph node cancer, and lung cancer. Treatments included a hysterectomy, chemo, radiation treatments and even a gall bladder operation in the middle of it all. Last month, her lung surgeon and radiation doctors put their heads together and decided the lung cancer could be treated with radiation rather than surgery. That has been completed. At this point, they believe she is cancer free. She will have some CT scans in early October to see if there has been a reoccurrence. Susan and I are most thankful for all the thoughts and prayers she has received from many of you.

Feel free to forward this to anyone you feel would benefit from it.

Very truly yours,