ABLE Accounts and Michigan Special Needs Planning

In the flurry of new laws passed at the end of 2013, there was a law that provides additional options for individuals with special needs or disabilities.  The law is called the ABLE Act – the “Achieving a Better Life Experience” Act. It had overwhelming support from all political parties, something that is rare these days. As you might expect, I am not able to cover all the details one blog post, especially when much of the “nuts and bolts” of how ABLE accounts will work has yet to be figured out through the regulatory process.  So, I will attempt to summarize the act and some important considerations.

10674802805_a9b0103bf6_mThe ABLE Act recognizes that there are additional financial strains faced by individuals with disabilities and their families, including those in the Grand Rapids, Michigan area.  In short, the ABLE Act allows for individuals to utilize a tax-free, state-based private savings account, referred to as an ABLE account, for the care of people with disabilities. This ABLE account can be used to supplement government benefits for “qualified disability expenses” such as medical and dental care, education, employment training, housing, and transportation, while not disqualifying a disabled individual from governmental benefits. As a result of the ABLE Act, eligible individuals and families are now allowed to establish ABLE savings accounts that will not affect their eligibility for Supplemental Security Income, Medicaid and other public benefits.

The ABLE Act states that eligibility will be limited to those individuals with “significant disabilities” with an age of onset of disability before turning 26 years of age. It is important to note that the person does not have to be under 26 years of age, just that the onset of the disability was before turning 26 years of age. Additionally, there are dollar limits on the amount that can be contributed to an ABLE account, both on an annual basis and as a total dollar amount in the account.  The annual contribution limit is $14,000 and the overall amount allowed in the account is $100,000.  To exceed either limit would disqualify the account as an ABLE account, a potentially disastrous result.

Keep in mind, this is not something you can set up immediately. Congress put the general structure in place and it was signed in to law, however regulations must be established before states can begin to set up procedures for managing ABLE accounts. It will likely be late this year before you can set up an ABLE account.

Keep in mind, an ABLE account is not a one size fits all solution for everyone.  An ABLE account is not without its drawbacks.  One of the biggest drawbacks of an ABLE account is that any money remaining in the account upon the passing of the ABLE account holder must be used first to pay back the State for care provided to the account holder.  Many of the planning options that are already available for someone with different abilities continue to provide a better approach for many families.  For example, a special needs trust will likely continue to be the best option for many Grand Rapids, MI area individuals and families.  Why?  For a few main reasons:

  • There is no maximum annual contribution amount
  • There is no maximum allowed amount
  • There is much more flexibility in how the assets are invested
  • You maintain more control over how the assets are used
  • Assets in a special needs trust are not subject to the Medicaid and/or SSI payback to which an ABLE account is subject.

I cannot overemphasize the importance of that last point.  If you, as a family member or friend put money into an ABLE account for someone, that money will be subject to Medicaid and/or SSI claims upon the ABLE account holder’s passing.   Yet, if you established a special needs trust (or contributed to one that was already established), no such “payback” is required and you can specify what happens with the remaining trust assets when the beneficiary passes away.  In short, you have more control.

All that said, an ABLE account is another “tool” in the planning “toolbox” and will help some families and individuals who may otherwise be disqualified from government benefits.

Breaking News from Lichterman Law – Firm Announcement

The Greek philosopher Heraclitus once said, “[t]he only constant is change.” Maybe you’ve heard or experienced that before, or maybe you try to avoid Greek philosophers . . . whatever your situation may be, we are surrounded by change in our daily lives. For goodness sake, we live in Michigan. If anyone is familiar with change, it’s us Michiganders when it comes to weather.

And in my life I’ve experienced many changes, as I’m sure you have. Some great, some good, and some not quite as good. And as I look back, I’m thankful in a way for each one . . . I’ve certainly learned a lot. And that leads me to my next change . . .

. . . effective July 1, 2013, I will be joining the law firm of Bolhouse, Baar & Hofstee in Grandville. For some who read this, the change may come as a shock. Many of you know that I truly love what I do. As cliché as it may sound, I feel Estate Planning and Business Planning are my calling as an attorney. I mean, why else would I read and learn more about it on evenings and weekends, right? ☺ And anyone who knows me well, knows that I don’t jump to decisions quickly . . . if anything, I tend on the long side when making decisions (some would call it OCD . . . I like to call it “detail oriented”). The recent addition of Medicaid planning to my practice areas is a good example.

If I were reading this I would wonder, “so, Mike, why did you decide to join another firm.” The short answer is because I want to spend more time with clients and reaching out to families and businesses in West Michigan – I love sharing time and working with folks. But, as the “chief cook and bottle washer” (a phrase my dad uses), much, if not most, of my time over the past 4 years has been spent on administrative duties of owning/running a business. Turns out that a law practice is not unlike most other small businesses in that regard.

The other main reason is that it helps me address the single most common question clients have asked me about my practice – “what happens if something happens to you?” It’s not only a fair question; it’s a very good one. Being part of a caring firm will help my client families have added peace of mind, knowing that if something happens to me, I have caring colleagues familiar with my practice who can come along side you if something comes up.

And yes, there may be other possible solutions. After praying about it and talking with my family, pastor, and key mentors in my life, I determined that joining a firm provides my clients with the best solution.

I imagine the next question is, “why Bolhouse, Baar & Hofstee?” The short answer: their attorneys are excellent, well respected, and both attorneys and staff are truly caring people. You know, the kind of folks you just “hit it off with.” You see, over the past year I’ve been approached by several firms about joining their practice. But, after many meetings, discussions, and prayer, I just didn’t feel any were a good fit for the way I practice and the client families I serve. That is, none except Bolhouse, Baar & Hofstee.

So, with that as the background, the official switchover will be on July 1st. After the switchover, I will still be spending much of my time at my current office at 5252 Clyde Park, but I will also spend time and meet with client families at Bolhouse, Baar & Hofstee’s office in downtown Grandville (in the historic Grandville State Bank building). You’ll still be able to use the same phone number for a period of time (or you can use (616) 531-7711) and my new email address will be mikel@bolhouselaw.com. My fax number will be (616) 531-7757. All should be “up and running” on July 1st.

I’m looking forward to the future and to having you continue to be part of our wonderful client family. The privilege is mine, I assure you. If you have any questions about this change, or anything at all, please call or email me. I welcome the conversation!

Warmly,
Mike

Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you.  He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning.  He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.

How Much Does a Michigan Will Cost?

“Yeah, hi, I’m just calling to find out how much a will costs here in Michigan?”  As a Grand Rapids, Mi wills and trusts attorney, that is probably the single most common question I get asked when someone calls my office about estate planning.  The right answer . . . “it depends.”  Sure, lawyers get a bad rap for giving that answer, but think about it for a second.  

Do you think all people are the same?  All families?  Do you think everyone’s goals are the same, that they have the same number of children, that those children are “good” or “bad,” or maybe no children at all.  Are they married, single, single and in a committed relationship?  Is it a second marriage, and if so, did they each have children before getting married to each other?  Did they have children after they married each other.

Or, how about goals.  Do they give to charity?  If so, which ones and how much?  What are there values – what drives their daily decisions?  What important stories do they have to share that should be passed down to future generations?  What is their income, expenses, and income tax situation?  Does anyone owe them money?  Do they expect to inherit?  How important is creditor protection to them?

You see, there are MANY different considerations that go into crafting/drafting a comprehensive estate plan that is specific to an individual or family.  And that’s what makes it difficult (virtually impossible) to “quote a fee” over the phone.  As an estate planning lawyer I spend much of my time learning and applying many different laws to client situations.  But even with knowing the law, I have no context in a 10 minute phone call.  We need time to learn from each other – I need to learn about your family and who you are (we call this Whole Family Wealth planning), and you can learn about how the law works (or doesn’t work) for your situation so you can make the best decision for your family.

Oh, sure, there are plenty of attorneys out there that will quote fees right over the phone.  And I’m ok with that – it’s their choice and their approach.  And quite honestly, families that are just looking for a form document to appease their conscience are not a good fit for the way we help families.  But, for those who want to have a plan for their family, who want to actually understand how that plan works and have a vital role in creating it, and who want to create a lasting legacy for their family, we are the ones you should call.  So why not “take the bull by the horns” and call us at 616-827-7596 today!  And if you mention this blog post, we’ll have a special discount for you.

Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you.  He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning.  He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.

Recent Changes in Michigan Estate and Probate Law

I probably sound like a broken record when I talk about the “living” nature of an estate plan. I always remind our client families that it’s critically important to review their estate plan on a regular basis (for example, every 3-5 years), and especially when you experience life changes. That’s why we include ongoing 3-year reviews in all of our planing levels. You life will change, what you have will change, and what you want to have happen will change. Your plan needs to keep up with those changes or it is likely to fail you when it’s needed the most.

And . . . the law will change (often)!  So, being fresh off several days of continuing ed, I thought I would share some of the key changes in Michigan’s law related to estate planning and probate. “Recent” means within the last 1-2 years. So here goes:

  • Probate inventory fee. This is probably the biggest change of them all. The “inventory fee” that each estate is required to pay to the probate court will be less for almost everyone (at least until 2018). That’s because the value of real estate that is used to compute the inventory fee is now based on the equity value of the real estate rather than the market value (MCL 600.871(2)). Think of all the underwater or barely above water homes we’ve seen so much of in the past several years. Using equity value rather than market value can appreciably lower the inventory fee.
  • Trust decanting. No, I’m not talking about wine . . . I promise. Generally speaking, trust decanting is “pouring over” the assets of a trust into a different trust and may be done for various reasons (changing terms of the trust, changing administrative or tax provisions, etc.). And this can be done even if the original trust is irrevocable (either because you wanted it that way from the outset or because someone has passed away and a previously revocable trust became irrevocable). There was some belief that case law (e.g., court-based law) allowed for “decanting,” but now we don’t have to worry about that “grey area,” because Michigan law explicitly allows it. I’m very much in favor of this because it provides client families with more flexibility.
  • 529 Plan creditor protection. This is a HUGE planning opportunity for client families planning for their children’s college education. Effective January 2, 2013, 529 plans are protected from creditors whether owned by the parent or child (MCL 600.6023(1)(l)(iii)). This is a great way to help make sure the college savings aren’t taken by creditors.
  • Property tax uncapping. Big change here for certain transfers of real estate made after December 31, 2013. Current law stated that a “transfer” of real estate “uncaps” the annual property tax increase restriction on assessors. As of December 13, 2013, it will not be a “transfer” (and therefore will not uncap the property tax value) to change ownership of residential real estate if the person (or people) who is taking ownership is related to the current owner within the first degree (MCL 211.27a(7)(s)). Now, there are some questions about the what “first degree” means and we’re hoping for some clarification from either the legislature or the regulators. I’ll do my best to keep you updated on how they define that.

There were many more changes, but I figured most readers are probably sleeping by now so I just listed the changes I feel are most important to my estate planning and probate client families. I welcome any questions or comments you have on these items or anything else.

Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you.  He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning.  He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.

Fighting Over the Family Legacy

I recently read this New York Times article on the family in-fighting over the estate of the late Merton Simpson.   Mr. Simpson was a painter and pioneering champion of African art who accumulated a collection said to be worth millions of dollars.  The story is sad, for sure.  It is also a reminder for all of us of the value of family and of having clearly spelled out wishes to help guide our chosen representatives in carrying on our legacy.  I encourage you to read the entire article – it’s not very long.

It also brings to mind something I always strongly encourage each of my clients to do – talk to others about your planning and what your wishes are for you legacy.  Many times the “others” you talk to will be family or very close friends, but it may also include close business associates, church leaders, or other people who you trust and know you well.  It’s often a great idea to record yourself sharing these thoughts.  That’s what I do with each client I work with – we have a Priceless Conversation.  Sadly, it seems that Mr. Simpson was taken advantage of by at least some of his family and friends.  Although it was a good thing that a guardian was appointed for him, it seems that the downward spiral in family and business relations was almost passed the point of resolution by that point.

Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you.  He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning.  He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.

How to Transfer a Credit Union Account to Your Trust

As noted in this slightly dated CNN Money article, the number of credit union accounts is growing.   The cause, according to the article, is that “a growing number of consumers grew fed up with the fees at the nation’s biggest banks and took their money elsewhere.”  I’ve noticed in many of my conversations that a large driver is better customer service (actual or perceived) or the credit union has a relationship with the person’s employer.  And, not surprisingly, I find that many (if not most) of my client families have one or more credit union accounts.  I’m a huge fan of great service, so I love to see my client families getting great service.  But, as a dedicated Grand Rapids, Mi estate planning attorney I’m troubled to find out that many of them are receiving bad advice about how to properly coordinate their credit union accounts with their living trust estate plan.

As with most things in life, the “best” way to handle something is based on each family – your goals, values, and how they want their trust to work.  And generally speaking we recommend that our client families have their trust own their bank and credit union accounts.  Up until a couple of years ago, clients were able to just change the owner of the account with new signature cards, whether it was a bank or credit union account.  About two years ago I started getting client calls saying that their credit union recommended against changing the ownership of the account.

Why?  Well, for whatever reason the credit unions started requiring you open a new account to change ownership (e.g. you could not change the owner on an existing account).   I honestly don’t know if that is an internal policy issue at each credit union or if it was an “edict” from the government regulators, so please know that I’m not bashing credit unions … I’m not.  And this may not be the case at all credit unions, but I have not had an exception to this rule for any of my client families over the past couple of years, so it seems to be a common practice.

Although I don’t necessarily agree with the policy, what I really find troubling is that almost every one of our client families was told, “you don’t want to change the owner because that requires opening a new account, changing all your auto-deposits and auto-deductions, and then closing out your old account.  You can just name your trust as beneficiary of your account – that’s the same thing.”  Please don’t misunderstand me – I understand the practical *pain in the butt* it is to change all those automatic things, believe me.  But, the fact is that naming a beneficiary is not the same thing as having your trust as the owner.

As I wrote in this previous blog post, trusts are an incredible incapacity planning tool.   But, it’s only a great incapacity planning tool for those things that it owns.  If it’s not in the name of your trust, your trustee won’t have legal authority to handle or take care of it during your incapacity.  So, in the above example, if your trust is just a beneficiary of your credit union account, your trustee will not be able to access it during your incapacity.  But if it is “owned” by your trust, your trustee can access it to continue to pay bills, take care of you, and take care of your children or others who you help support.

So, choose what is best for your family after talking it through with your estate planning attorney, and remember the difference between owning and being a beneficiary.

Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you.  He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning.  He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.

Estate Planning Can Help With Financial Organization

A few weeks ago I came across this New York Times online article about a woman who had to make organization out of chaos when her husband was hit and seriously injured riding his bicycle.   The article talks about how her necessary quest to organize their disarrayed financial life led to a website that now helps others do the same.  Her situation is not all that uncommon – its thrust upon many families through Michigan and the rest of the country each year.  We don’t know what’s going to happen to us or when it will happen to us, so the old adage of always being prepared is good advice.

But did you know that a comprehensive, well-drafted estate plan can actually help you through the financial and life organization process?  You bet!  Sure, there are forms, online services, and even attorneys who merely prepare forms, but what I’m referring to in a comprehensive plan is something that goes beyond just the legal bare necessities.  For instance, for all of our clients who feel a trust-based estate plan will be best for their family, we help them get a clear picture of what assets they have, how they are owned and whether or not they are coordinated with the plan we’re draft for them.  And if they aren’t, we provide them with a “funding toolkit” that guides them through the process and we followup with them on a regular basis after their plan is signed.  Because as you may have read in this previous blog post, just “having a trust” is not enough . . . the trust must be “funded.”

So, how about you and your family?  Do you know beyond a doubt what you have, whose name it’s in, and who would receive it if something happened to you?  If not, why not let getting a new (or updated) estate plane help you have the clarity you need to have added peace of mind?  Call us at 616-827-7596 and schedule your personal Peace of Mind Planning Session to get started today!

Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you.  He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning.  He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.

Should I Put My Car In My Trust?

This is the most common questions I’m asked as a Grand Rapids, Mi will and trust lawyer.  And the short answer is: usually not, but it depends.  You see, Michigan actually has a rather simple post-death automobile transfer procedure.  It isn’t the best for all situations, but it works well in many situations.  There are requirements for using the procedure.  You can find out more about the procedure and its requirements by reading this previous blog post.

Another reason for not putting your automobile into your living trust is because of a common public misperception of people who have trust . . . many people think families with trusts are “rich.”  As I’ve previously written here and here, that is certainly not the case.  Trusts have many benefits to families from all walks of life, including the heart and soul of our fine country – the middle class.  If your car or truck is registered in the name of your trust and you cause an accident, the injured party may think you are “rich” and take actions they may otherwise not think of taking, hoping to dig into your deep pockets.

All that said, there are occasions when I do recommend that my client families transfer ownership of their automobiles to their trust.  The first is when the value of their automobiles exceeds the dollar value in the post-death procedure mentioned in the first paragraph of this post.  And the second is when one or more of their automobiles is a collector car.  And, in fact, usually if they fall into the second category they almost always fall into the first category.

As with all situations involving families and the law, every situation is unique.  So, make sure to give us a call if you have questions, need to review your estate plan, or your family needs a caring plan in place!

Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you.  He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning.  He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.

Ways to Pass Assets to Your Children

Just last week I ran across this great article about the different ways you can leave assets to your children.   I’m not going to repeat the article here – it’s worth your time to read it, so please do so.  What I will say is this – as a Grand Rapids, Mi estate planning attorney I’ve been somewhat surprised by how many families believe their only choice is to pass their assets at their death to their children.  As the article points out, there are many ways to leave assets to your children and, there is no single right answer for every family.  Remember, estate planning should not be just about what you have, it should also be about who you are.  How you leave your estate to your children is a unique opportunity to share your Whole Family Wealth – who you are and what’s important to you.  This is truly creating a legacy!

There are just two items I want to repeat from the article because they bear repeating (and are items many families don’t think about):

  • “Fair” distributions to your children (or grandchildren) and “equal” distributions are not always the same thing
  • There are many benefits to leaving your assets in trust for your kids’ lifetimes – benefits for them and for you

Have questions?  Give us a call at 616-827-7596 and discover how you can leave a true legacy for your family!

Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you.  He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning.  He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.

Why Do I Need a Michigan Gun Trust

As a Michigan gun trust lawyer, I’ve noticed a dramatic increase in the number of calls we’re receiving asking about setting up a gun trust.  It’s really not a surprise given the current state of the “gun control debate” after the horrible tragedy in Newtown, CT.  It seems that the most common question I’m asked is, “why do I even need a gun trust?”  Well, the short answer is that you don’t need a gun trust to own a firearm, whether regulated by the National Firearms Act (NFA) or not.  But, with very few exceptions, a Michigan gun trust is the best way for many Michigan residents to own their guns, especial NFA items (for example, suppressors / silencers).

Why is that?  The reasons vary based on your specific circumstances.  This previous blog post shares many of the reasons a Michigan gun trust is a great way to own, protect, and ultimately transfer a NFA regulated firearm or item in Michigan.  What many Michigan firearms owners don’t realize is that a Michigan gun trust can be a MUCH better way of owning their non-NFA firearms . . . especially if you are a Michigan resident with a firearm “collection.”  Generally speaking, we consider a “collection” to include total value of firearms at or about $10,000-15,000.

Why would you do that when Michigan law already provides a way to transfer non-NFA regulated firearms if something happens to you?  The key lies in the fact that a well-drafted Michigan gun trust is drafted with the purpose of acquiring, holding, and eventually distributing firearms, ammunition, and accessories.  What does that mean for you?  Well, let’s think about the current “gun control debate” going on nationally and in many states.  As you probably know there is “gun control” legislation going through Congress right now.  The goal of much of the proposed legislation is to ban a wide variety of semi-automatic firearms as well as implement “universal” background checks.  And some of the legislators have made no secret of their wish to confiscate all firearms and accessories, and if they can’t do that, to at least prohibit the transfer of any “grandfathered” weapons and require any such weapons to be surrendered to the state at the current owner’s death.  My hope is that none of these laws are passed, but even so, it gives you insight into what they are really thinking about controlling your right to “keep and bear arms.”

Although firearms laws and trust law is still developing, it can be a good idea to transfer non-regulated weapons into a trust prior to the enactment of any such legislation (whether the legislation comes now or sometime in the future). This may avoid a scenario in which your family is forced to surrender your prized collection after you are gone.  Proper estate planning will help create and share your legacy with your family and loved ones.  It’s no different with your firearms – a properly drafted gun trust can help you leave a legacy with your firearms and plan for their use for generations to come.

Call at (616) 827-7596 to start creating your gun trust today!

Michael Lichterman is an estate planning and gun trust attorney who helps families and firearm owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for finances – it’s about who your are and what’s important to you.  He focuses on estate and asset protection planning for  firearm owners (both NFA regulated and non-NFA regulated), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses and pet planning.  He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

Keep You Beneficiary Designations Updated

I had a phone conversation this past week that was a stark reminder of the important role beneficiary designations play in your estate plan and it reminded me of this previous blog post on the topic.  Unfortunately, the person I spoke with this week had a sad story about how beneficiary designations can cause serious family problems.

The short version is this: his father had been married twice, so he had “blood” children and step-children.  Not an uncommon family situation.  Dad named his step-son as the sole beneficiary on one of his retirement accounts (although modest in size, it was still tens of thousands of dollars).  The idea was that the step-son would not benefit from the rest of dad’s estate because he received the retirement account.  Well, fast forward to a few months ago when dad passed away.  Due to end of life care, etc., dad had used up most of the rest of his estate.  But guess what he didn’t do?  You’re right – he didn’t change the beneficiary designation on his retirement account.  So, step-son ended up with all of the retirement account assets, which was the bulk of dad’s overall estate.

So, did he do the “right” thing and share it?  Nope.  And that’s the critical thing to remember about beneficiary designated assets (typically retirement accounts and life insurance) – it will be paid to the beneficiary and, once paid, it is solely the beneficiary’s.  The beneficiary is not required to share it or do anything specific with it.

As you can imagine, this has caused some serious hurt among family members, to the point that several of them are not talking to each other any more.  Do you think that is what dad wanted?  I very highly doubt it.  But, if you don’t keep your plan updated, these types of stories are far more likely for you, just like they were for this family.  That’s why we include ongoing 3-year reviews (without charge) for all of our estate planning clients.  Life changes, and sometimes quickly.  What you have will change, the laws will change, and likely what you want to have happen will change.  If your plan doesn’t change along with it, it is more likely to fail.  

Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you.  He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning.  He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.

How to Transfer a Michigan Automobile After Someone Dies

I hear the following question asked quite a bit after a loved one passes away: “he (or she) had a car, not really worth all that much.  Is there a way we can just transfer that without a court proceeding?”  The short answer is . . . maybe.  As with many legal questions, it depends on the specific facts and circumstances of your situation.  For example, if the automobile was in a trust (not something we recommend), then you must transfer it according to the terms of the trust.  And, if there is property that would require opening a probate estate to transfer it, then the automobile will be a part of that probate estate.

But, Michigan does have a quick transfer procedure available if certain requirements are met.  The requirements are:

  • The total values of the vehicles (all together) must be under $60,000, and
  • There must be no other property for which a probate proceeding (formal or informal) is necessary.

If your situation meets those requirements, you can use this Secretary of State Form TR-29 to transfer the vehicle(s) to the deceased person’s heirs.  The person signing the form certifies that there is no probate proceeding pending for the decedent’s estate and that no probate proceeding will be started in the future. If available, the vehicle title must be attached to this form. The form requires that the following vehicle information be provided: year, make, body style, vehicle number, and title number. If the vehicle is being transferred to someone other than the surviving spouse, the surviving spouse must certify that the title is free of all liens.

You can find some additional helpful information at this State of Michigan website.

Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you.  He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning.  He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.