Estate Planning

Estate Planning

What is Estate Planning?

Estate planning is a term that has changed dramatically over the years. At one time, estate planning meant having a will that would go through probate and, if the individual was married, titling any property jointly with their spouse. It was often thought to be a process only for the wealthy, requiring many hours of expensive planning in the hope of avoiding estate taxes. Changes in the laws and changing views of finance, lifestyle, privacy, family structure, and longevity of life have made estate planning far more important and, frankly, more compelling for a larger group of people than ever before.

Estate planning is a much broader field than in the past and includes planning for not only your death, but also your incapacity. It includes choosing, for example, what will happen to your finances and assets, your minor children, and your health care in such situations. Taking steps before incapacity allows you to choose someone you trust to look after your affairs, and medical and end of life decisions, rather than leaving it for a court to decide.

For these and many other reasons, estate planning is no longer simply drafting a will or trust planning only for the wealthy. Estate planning is financial, retirement, business succession, charitable, medical, disability, end of life, asset protection, legacy, and gift planning. Its scope is not as daunting as it might seem from this list; it is actually quite exciting and rich in opportunities for those who have the foresight to plan.

We invite you to learn more about our Michigan estate planning attorney services below. Contact Mobile Legal Services for a free initial phone consultation and for additional information about how we can help you or your loved one. Our attorneys offer estate planning services throughout Southeast Michigan.

Wills

A Last Will and Testament is the most basic aspect of end of life planning and should be incorporated into every estate plan. Dying without an up-to-date will can have unforeseen and undesired consequences. Wills can range from simple to complex, but should always be kept updated. Click here to learn more

Trusts

Contrary to many people’s beliefs, trusts are not only for the wealthy. Trusts have many different purposes including, avoiding the probate court system after death, ensuring beneficiaries have the resources they need for an extended period of time, protecting assets from creditors, protecting vital government benefits, and the list goes on. Click here to learn more

Powers of Attorney

Well drafted power of attorney documents can prevent significant cost and frustration down the road. These documents are designed to ensure an individual with diminished capacity receives the care they need while also ensuring their bills are paid, and important decisions regarding their care are handled by someone they trust. Without these documents it is often necessary to apply for guardianship through the probate court. Click here to learn more

Guardians for Minor Children

Michigan law allows the parents of minor children to nominate individuals they would like to serve as guardian of their children if the parents are unavailable. Planning to ensure your children are cared for, and by the individuals you believe would offer the best guidance and parenting, could be the best decision you ever make. Click here to learn more

Ladybird Deed

A Ladybird deed, also known as an enhanced life estate deed, is not actually a deed in and of itself, but rather a method of transferring property. This can be done through a quit claim or warranty deed. In essence, it allows property to transfer automatically upon death. With an ordinary life estate in place (without a Ladybird deed), the original owner of the property (Grantor) retains full use of the property during their lifetime, but does not retain any ownership interest. They cannot sell or mortgage the property, since they are no longer considered the legal owner; the property belongs to the individual named in the deed (Remainderman). Upon the death of the Grantor, the property is then transferred to the ‘Remainderman.’ A ladybird deed, on the other hand, is known as an ‘enhanced’ life estate transfer and has additional features which avoid many of the issues encountered with the ordinary life estate. The ‘enhancement’ of the life estate in the ladybird deed allows the owner of real property to transfer their property at death, while retaining all ownership rights in the property during their lifetime. This ensures that if the owner of the property decides later in life to mortgage or sell the property, they do not need the permission of the ‘Remainderman’ to do so. This also ensures that the ‘Remainderman’ does not have any legal right to the property until it is transferred, which can protect against an unforeseen issue such as a lawsuit, bankruptcy, divorce, or other creditor issues against the ‘Remainderman.’ Under Michigan law, the person named to receive the property upon the death of the property owner, the ‘Remainderman,’ is considered a ‘contingent’ owner. Their ownership is contingent, or dependent, upon the original property owner’s death, coupled with the original property owner’s retention of the property during their lifetime. If the above conditions are met (the original property owner did not sell or transfer the property prior to their death, and the original property owner is now deceased) the ‘Remainderman’ becomes the rightful owner of the property. However, if all of the above conditions are not met, the ‘Remainderman’ receives nothing. When is a Ladybird Deed Appropriate? Ladybird deeds can be used in a variety of circumstances. They are often used by individuals who wish to leave their property to someone upon their death, but do not wish their property to be subject to the probate court. This deed allows the property to transfer directly to the individual named in the deed, the ‘Remainderman,’ without the hassle and expense of going through the probate court. Another use of the ladybird deed is by someone who wishes to transfer property upon their death, but may need to apply for Medicaid benefits within the next five years. Use of a ladybird deed is not considered a present transfer, and is therefore often used in Medicaid planning. Because it is not a present transfer, it is not considered a divestment (or gift) for Medicaid purposes. Also, because the property transfers directly to the ‘Remainderman’ upon the death of the Medicaid recipient and avoids the probate court, it is not subject to the Medicaid Recovery Program. Ladybird Deeds vs. Joint Ownership: A ladybird deed is generally recommended over titling property jointly. Not only can titling jointly subject the property owner to Medicaid penalties, it can also result in creditor issues. The individual who is added to the deed receives legal ownership to the property, which can become an issue if they are ever the subject of a divorce or bankruptcy proceeding. It can also have consequences if the individual added to the deed is ever sued following an auto accident, or any other form of civil proceeding. Also, if the original property owner ever wishes to sell, gift, or mortgage the property, they would need the permission and signature of the other joint owner(s). While this may not seem like an issue now, people and relationships can change over time, resulting in family disputes or other unforeseen problems. Given all the above reasons, a ladybird deed may seem like the perfect solution to transferring property to loved ones. However, a ladybird deed is not the best option in every circumstance. There are some potential tax consequences that should be explored before any transfer of property is made. Please contact us to determine if a ladybird deed is right for your situation. What To Do When You Are The Recipient Of A Ladybird Deed? Someone has passed away and had the foresight to put your name on a ladybird deed. Now what? The first thing you should do is confirm that the decedent did not sign another deed after the ladybird deed. You can do this by visiting the register of deeds for the county where the property is located and requesting the most recent deed on record. Depending on the county, you may also be able to make this request over the phone or online. Once this has been confirmed, you will need to record the certified death certificate with the register of deeds for the county where the property is located. The cost for recording the document is $15 in Wayne County, and $30 in all other counties in Michigan. Once the certified death certificate has been recorded, you will need to complete and submit to the local (city/township/village) tax assessor a Property Transfer Affidavit. You have 45 days from the date of transfer (death) to file this form, or you may be subject to late fees. Additionally, if you will be residing in the property as your primary residence, you will need to provide the local tax assessor with a Principal Residence Exemption Affidavit. This form ensures that when the property transfers to you, it will be taxed as a primary residence, which is taxed less than most other forms of property. Click here to learn more

Practice Areas

Navigating the needs and complexities surrounding the older and aging population…
Guardianship, conservatorship, trust administration, and probating an estate.
Planning for an individual or loved one's incapacity or death
Future financial, life management, and medical care for those with disabilities.

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