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By Swogger Bruce & Millar, Aug 28 2018 08:11PM

Aretha Franklin.

Just saying her name makes you smile. She played a huge role in shaping our American experience with her gospel-rooted singing and diva-bluesy delivery. Her voice, her music, and the memories we have from listening to her, are precious treasures. We lost the Queen of Soul on August 16, 2018. Unfortunately, she died without a will, trust, or other estate plan. As a result, her estate likely will be distributed other than she had intended, and that process will likely lead to bitter and costly disputes over inheritances that will inevitably reduce the size of her estate due to attorney fees, court costs, and the long and arduous process of intestacy.

In one of her greatest hits (“Think”), Aretha warned that “you better think (think). Think about what you’re trying to do to me.” And in another, she noted that “chain, chain, chain, Chain of Fools. Every chain has got a weak link.” Had she spent the time and effort to “think” about the consequences of intestacy, she could have strengthened her chain and secured an orderly and efficient distribution of her estate with a carefully prepared estate plan.

Dying without a will or a valid and funded trust is known as dying “intestate”. This happens when a person dies without a valid will, or dies with a will that fails to effectively dispose of all of the person’s assets. When a Michigan resident dies intestate, his or her estate will be distributed according to Michigan law, and the assets are likely to be disturbed other than the deceased intended. Do you really want to leave it to politicians to determine how your assets are distributed?

If you die without a valid will or trust, then your estate will be distributed according to Michigan’s intestacy rules. These are default rules which determine to whom the estate is distributed (whether you like it or not). Intestacy proceedings are often complicated, costly, and vary depending on the value of the estate, and the type and number of family members you leave behind (often times, family members you didn’t even know you had: yes, they tend to come out of the woodwork?). Lawyers can make a lot of money battling it out in probate court over an intestate estate.

If you do not have a valid will or trust, or you have a plan than is old and needs to be reviewed and possibly updated, take this advice from a lawyer who benefits from the long, costly, and arduous process of intestacy: give yourself a little R-E-S-P-E-C-T and see an estate planning lawyer so you can avoid dying intestate.

Michael J. Swogger is an attorney with the Swogger, Bruce & Millar Law Firm, 10691 East Carter Road, Suite 103, Traverse City, MI 49684. Telephone 231-947-6800. He is a certified Probate and Estate Planning attorney through the Probate and Estate Planning Section of the State Bar of Michigan.

By Swogger Bruce & Millar, Apr 10 2017 02:56PM

On December 13, 2016, President Obama signed the 21st Century Cures Act. One section of the law made an important change to estate planning for disabled individuals. In the past, a disabled individual could not establish their special needs trust. It would need to be established by a family member, guardian or court order. Courts in Northern Michigan are very helpful in establishing these trusts, but the process takes time, effort and money. Now a disabled individual, who is competent, can sign and establish his trust without having to rely on others.

Special needs trusts are often used to provide a disabled beneficiary with assets to improve his lifestyle without those assets counting against eligibility for most government benefits. The new law applies to first-party special needs trusts which are also known as Medicaid payback trusts. Assets belonging to the disabled individual are placed in a trust and become excluded for purposes of applying for government benefits. Because the assets belonged to the individual, there must be a provision that provides that at the disabled beneficiary’s death any state that provided Medicaid must be paid back before distributing the remainder to a beneficiary’s heirs.

The two most common times to establish a first party special needs trust: (1) receiving an inheritance or (2) receiving an award from a lawsuit. We recently had two special needs trusts approved by the Benzie County Probate Court for two gentlemen who received criminal restitution.

Third-party special needs trusts are established as part of a family member’s estate plan. The provisions are similar, but because the assets never technically belonged to the beneficiary there do not have to be any Medicaid payback provisions. A third-party special needs trust allows a better result than receiving an inheritance and then putting it into a Medicaid payback trust.

If you have a disabled child or grandchild, a third-party special needs trust can improve his quality of life without causing him to lose government benefits. If you have received an inheritance or an award from a personal injury lawsuit, a first-party special needs trust can protect the benefits you are already receiving.

By Swogger Bruce & Millar, Jan 31 2017 03:36PM

Michigan law has long recognized a wife’s dower right to one-third of all land owned by her husband during his lifetime. Dower laws were originally enacted to guarantee a man’s wife and children a means of financial support upon his passing, the concept of dower in Michigan can be traced as far back as a 1787 ordinance. Most states have long since eliminated their dower laws, citing them as outdated or discriminatory. Michigan is the only state that has maintained a gender-specific version of dower, granting dower rights only to married women without providing a reciprocal right to married men. On January 6, 2017, Governor Snyder signed Senate Bills 558 and 560 into law, abolishing dower rights in the State of Michigan. These bills will take effect April 6, 2017.

Dower is a contingent estate which only vests in the wife upon the death of her husband. In order to protect this right, a husband is prohibited from transferring (or even mortgaging) any real property he owns without his wife’s signature. For this reason, if a husband chooses to sell property that he owns as an individual, his wife must also sign the deed to release her dower interest in the property. This creates issues for husbands who may be estranged from their wives, or who have differing views as to how their real property should be transferred. If a husband conveys property that he owns during marriage without his wife signing off as to her dower interest, it creates a cloud on title and that will likely cause problems down the road. These mistakes require remedial deed work to fix, which leads to additional time and expense that could have been avoided with a properly drafted deed.

As a practical matter, dower rights are rarely exercised, as Michigan widows have other alternatives under the law. Upon her husband’s death, a widow may choose to follow the terms of her husband’s will, if he had one. If her husband died without a will, a widow may take the inheritance that passes to her through Michigan’s intestacy laws. This so-called intestate share, at a minimum, provides a widow with the first $100,000 from her late husband’s estate as well as half of the remainder. A widow may also take her elective share of her husband’s estate, which is one-half the value of what she would have received if her husband died intestate, less one-half the value of any property her husband transferred to her outside of his will. Dower’s one-third interest in real property is comparatively much smaller than an intestate or elective share, and therefore less attractive to many widows faced with this decision.

Following the United States Supreme Court decisions in DeBoer v. Snyder and Obergefell v. Hodges requiring all states to recognize same-sex marriages, the constitutionality of Michigan’s gender-based dower law has come into question. Faced with the possibility of having to defend the questionable constitutionality of this law in court, Michigan has opted to repeal it entirely. By abolishing dower, Michigan has not only eliminated an outdated legal concept, but also saved many property owners a substantial amount of time and money.

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