- News & Info
- Aug 16 2012
In 1994, Michigan’s voters approved “Proposal A.” A key feature of Proposal A limited annual increases in property tax assessments to the lesser of 5%, or the rate of inflation, until a property is transferred. The calculated tax assessment is called the “taxable value.” The local assessor still keeps track of the “state equalized value,” (“SEV”) which is theoretically one-half of the property’s market value. When the property is transferred, the taxable value is automatically increased to the SEV– usually referred to as “uncapping.”
- Aug 16 2012
Michigan is finally administering a procedure for “Medicaid recovery” of financial support paid under the Medicaid system. Medicaid is a needs-based program to provide long-term nursing care (among other purposes). To qualify for Medicaid, a single person must have $2,000 or less of “countable” assets. Among the few assets which are not “countable” is the person’s homestead with up to $500,000 in equity (adjusted for inflation). In addition, term life insurance policies without a cash value are not countable assets.
- Aug 16 2012
The use of “Lady Bird Deeds” has become common in Michigan is a way to pass property upon death. The name comes from the mechanism that President Lyndon Johnson used to pass property to his wife, “Lady Bird” Johnson on his death. Some lawyers call these “enhanced life estate” deeds.
- Dec 11 2008Many individuals, typically parents, desire to convey certain real property to their children during the parents' lifetime because they want to make certain that the property does not pass through probate proceedings at their death or because they want the children to have the use of the property during their parents' lifetime. However, one important tax consideration is often not taken into account. If the parents deed the property to a child during the parents' lifetime and the parents do not stay on title as a joint owner, then the children receive the property with the same tax basis that the parents had in the property. The tax basis is essentially what the parents paid for the property plus any capital improvements to the property (such as additions to buildings or other improvements on the property). Typically the parents' tax basis is very low in relation to the property's fair market value. Then if the child eventually sells the property, the child will pay capital gains on the difference between the fair market value at the time of sale over the amount of the parents' tax basis. This can result in a substantial tax bill to the child.
- Dec 11 2008I was contacted by a client recently in a panic because a woman kept calling her and telling her that she needed a revocable living trust and that if she did not have one, then she would lose a large portion of her estate to legal and probate fees. When I asked who this woman was, my client said that she was with some "law firm." The mystery woman said that my client had returned a post card asking for such services. Even though my client knew that she had not returned any card, the calls kept coming with greater pressure being applied with each call.
- Dec 11 2008It often does not occur to parents that when their children turn age 18, they are no longer minors under Michigan law. Once a child reaches 18, he or she has legal independence from parents and the ability to enter into contracts and execute other documents including estate planning documents. Although most 18 year olds have not yet accumulated substantial assets, they should execute certain basic estate planning documents.
- Dec 11 2008A living Trust is an estate planning vehicle that allows you to transfer assets to the Trust during your lifetime typically to be managed for your benefit by you as the initial Trustee during your lifetime. Upon your death, the Trust would typically provide for distributions to children or other beneficiaries. If you transfer assets to the Trust during your lifetime, those assets will avoid probate proceedings at your death. Trusts can also avoid or minimize estate taxes for married couples who have larger estates.
- Nov 4 2008This article is intended to provide some insight into the factors to consider in selecting successor trustees of your trust. It is intended as a general guide for informational purposes. It is not a substitute for specific legal advice pertaining to your particular trust.
- Nov 4 2008The following is a list of some of the typical tasks that a trustee or successor trustee will need to perform. The list is not necessarily in chronological order and is not intended to cover every task that may arise since each trust is different.
- Nov 4 2008As a general rule, you should own your car in your own name alone. The primary reason for this is to limit your liability exposure. If your car is involved in an accident, most likely you will be the one driving at the time. If someone is injured as a result and they bring a claim for negligence that exceeds your liability insurance coverage, then only your individually-owned assets will be exposed to that claim. If you are married, your spouse's assets and many of the assets you own jointly with your spouse will be protected because your spouse is not responsible for your negligent acts. However, if you own your vehicle jointly with your spouse, almost all of your assets, your spouse's assets, and your joint assets will be exposed to the liability (there are exceptions for certain retirement assets). As an owner of a vehicle, your spouse is responsible for the acts of those operating the vehicle. Therefore, the way to best limit your liability exposure is to have the vehicle titled solely in the name of the person who operates the vehicle most often.