Posted on November, 2021
Dear Clients and Friends,
In the office this month.
Every month I have the opportunity to help the families of my clients when a loved one has passed away. From a legal perspective, one of the first things to be done is to identify all the assets to determine if there will be a need to go through probate. Assets with a joint owner, a beneficiary, or owned by a trust avoid probate. Assets in the decedent’s sole name will have to go through probate.
The starting point is to look around the decedent’s house for the monthly statements that come from the banks, credit unions, brokerage houses, insurance companies, etc. to identify the assets and how they are titled.
That advice was not helpful for Mary Jane this month. She came to the office for her free consultation I provide when there has been a death in the family. Her father had passed and she discovered that he had gone “paperless”. I am sure you see the messages each month on your statements requesting that you go “paperless” and receive your statements by email or on your account on the company website. The problem for Mary Jane was that she did not have the password to open the computer. Even if she could access the computer, she did not know what websites to go to nor did she have a password to access her father’s accounts on those websites.
We discovered some of the assets by going to the tax return to find where her father was paid interest and dividends. The tax return would also show who paid out the required minimum distribution. Even so, how do we know we have discovered all the assets?
The lesson is that we all need to help our families by compiling a list of our assets and passwords. Whether we go paperless or not, it will be a great help and source of comfort in a time of turmoil and stress.
There is an amazing organization located in my building called Legal Help for Veterans. Their mission is to help Veterans who were injured while on duty to receive disability pensions. I bumped into Larry, one of their managers last week in the hallway. He reminded me that a veteran who has a disability rating of 100% does not have to pay their property taxes. If you think this applies to you, contact the treasurer for the city or township where you live.
Remember, the disability must be rated 100% by the Veterans Administration (not Social Security Administration) and arise out of an injury while on active duty. A veteran who became disabled later in life due to an accident or illness will not qualify.
Medicare planning is now on through Dec 7. It is complicated and changes every year. There are now Medicare Advantage plans that have a zero monthly cost. If you are paying for a Medicare Advantage plan you owe it to yourself to look into what is available to you. Please do not call me. I am not an expert in these products. Michigan has a non-profit State Health Insurance Assistance Program (SHIP) called MMAP. You can reach them at 800 803-7174 and they will connect you to your county MMAP.
No, Brittany was not in this office this month but she was sure in the news for the last six months. In case you were wondering about the court and its involvement I will explain what happens in Michigan courts in similar circumstances.
If an individual is under a disability, a court can name a person to take care of them under two provisions. The court can name a conservator who will take charge of a person's finances. Their job is to conserve the finances for the benefit of the individual and preserve them for the future. The court can name a guardian who will be responsible for the general health and welfare of the individual making decisions about such things as where they live or if they will have surgery when the doctors recommend it.
If a person needs a guardian and a conservator the court will often appoint one person to serve in both rolls.
These are court proceedings. They are expensive. They are emotional. They do not always result in the naming of a guardian or conservator that the individual would have preferred.
This can be avoided by signing a document called “Power of Attorney”. A Healthcare power of attorney names a person to do the same things a Guardian would do. A Durable power of attorney for Financial Matters names a person to do the same things a conservator would do. These two documents will give you the help you need in the future, by the people you select, and without having to deal with the court.
Make sure your powers of attorney are up to date and you still want to name the same people you selected years ago.
My first experience with guardianship was many years ago. I was a very young attorney when Judge Rodney Hutchinson in Washtenaw County called me. He asked me to meet him at the hospital. A patient there needed exploratory surgery for cancer and his doctor said he was not competent to consent to that surgery. I met the Judge bedside with the doctor who testified to the facts, the Judge appointed me guardian for the surgery, and I consented to the surgery on behalf of my client.
Three days later, Judge Hutchinson called me again. I was sure that I had done such a wonderful job that he wanted to thank me for a job well done. Actually, he called to say that the client’s surgery led to a diagnosis of tuberculosis. I had to return to the hospital for a TB test.
Michigan Principal Residence Exemption
The Michigan Principal Residence Exemption is a huge tax benefit. If you qualify, you are exempt from a portion of the local school operating taxes up to 18 mills. To qualify, you must be a Michigan resident who occupies and owns the property as your principal residence. This month, Arlene came to the office for an estate plan. She owned a home in Westland and a second home, on a lake, in Pinckney. She lived on the lake and claimed that home as her primary residence. Her only daughter Betty lived in the home in Westland. She asked me to create a ladybird deed for each property so Betty would be the owner of both on her death.
We discussed the Principal Residence Exemption (PRE). She could sign a ladybird deed to her daughter for the lake house and still keep the PRE since she both owned and occupied it as her residence. However, Betty could not claim the PRE on the Westland house under a ladybird deed because she would not become the owner until her mother died and the house passed to her. The mother could not claim the PRE on the Westland house because you can only have one PRE and her PRE was the lake house. I explained that if she did a quit claim deed from herself to herself and Betty as joint tenants with right of survivorship that Betty would be able to qualify for the PRE. The quit claim deed would make her an owner and she already occupied the premises. We discussed some of the dangers of joint ownership but Arlene felt the financial advantages of the PRE outweighed the risks of joint ownership.
With the new deed, the taxes on the Westland house will be reduced.
Please see our website, www.gfalawfirm.com to view our updated list of seminar dates and times. Sometimes our handouts from previous seminars might not be up to date on changes or cancellations. This website has the most current information.
We are so pleased to help you with your estate planning needs. The best way to receive new clients is through referrals from you. In addition, there are people out there searching for someone to help them. They feel comfortable calling an attorney that has a 5-star rating and details of client experiences. If I may, I will continue to ask all of my clients who have not done so yet, to provide a Google Review for me. Not only will it give me more positive reviews, it may help someone out, that doesn’t have a referral available, find an excellent resource...me! It is easy to do and takes very little time.
Simply type “Gary Allen attorney” and hopefully my information should pop up (if it doesn’t, call me).
On the right of your screen are gold stars and the number of Google reviews I have. Click on the google reviews and it will take you to my reviews.
Then in the top right corner it says in blue “Write a review”. Click on that to provide a review. (It may have you sign into your Google account if you haven’t already. Thank you!)
Please feel free to share this newsletter with your friends and family.
Very truly yours,