Estate Planning | Fraser Blog

Now is the Time to Optimize Your Tax-Planning Strategies for 2022 and Beyond

With year-end quickly approaching, reducing taxes is on many people’s minds. It’s been a tumultuous few years, with many changes to people’s individual circumstances and tax laws at state and federal levels. Now is the time to focus on your year-end taxes and engage in estate and income tax planning opportunities.

At Fraser Trebilcock, our tax attorneys have made sure you don’t have to start your preparations from scratch with year-end tax considerations.

Estate and Gift Tax Planning

The IRS recently announced that, due to inflation, the estate tax exemption will be increased to $12.92 million for individuals in 2023 ($25.84 million for married couples), up from $12.06 million in 2022. Currently, the lifetime gift tax exemption amount tracks the federal estate tax exemption for decedents of $12.06 million (and $12.92 for 2023). Keep in mind, however, that the lifetime estate and gift tax exemption amount is set to be cut in half at the start of 2026.

If you’re thinking about beginning an annual gifting program, or want to continue a program you’ve already started, there are some things you should know. From an estate and gift tax planning perspective, the most commonly used method for tax-free giving is the annual gift tax exclusion. This method allows you to give up to $16,000 for 2022 (increasing to $17,000 in 2023) to each donee, without reducing your estate and lifetime gift tax exclusion amount. It’s also important to note that there is no limit to the number of people to whom you may make such gifts, and that the annual gift tax exclusion is applied on a per-donee basis.

Additionally, you and your spouse could choose to combine your exemptions into a single gift from either of you. By sharing in the gift of one spouse, married donors may double the amount of the exclusion to $32,000 in 2022, or $34,000 next year. This method of transfer could help you save family income taxes, where income-earning property is given to family members in lower income tax brackets, who are not subject to the “kiddie tax.”

Have children in college? Qualifying tuition payments may also be made or continued, in addition to medical payments. These amounts do not count against the annual exclusion limit.

Another thing to remember is that if you’re required to submit a written valuation in connection with your annual gifting program, you might be able to utilize a single valuation, for gifts made in December of 2022 and January of 2023.

Income Tax Planning

Since we know that everyone would love to potentially reduce their overall tax liability for 2022, it’s important to consider various income tax planning techniques before years’ end. When evaluating appropriate planning techniques, you should review the overall impact of any such planning for the two-year period of 2022 and 2023.

Traditional income tax planning options include the postponement of income until 2023, as well as accelerating deductions into 2022. This strategy might allow you to claim larger deductions, credits, and other tax breaks for 2022 that are phased out over varying levels of adjusted gross income (AGI). If there’s a chance you might be in a lower tax bracket next year, it may be advantageous to try to arrange with your employer to defer a bonus that you may be entitled to until 2023.

With regard to accelerating deductions, consider using a credit card to pay deductible expenses before the end of the year, including charitable contributions. This can increase your 2022 deductions, even if you don’t pay your credit card until after the end of the year. If you expect to owe state and local income taxes when filing your return next year, consider asking your employer to increase withholding of state and local taxes (or pay estimated tax payments of state and local taxes) before the end of the year, so that you might deduct those taxes for 2022.

Other common elements of income tax planning may also include selling capital assets (such as stock investments) for the purpose of generating a capital loss to offset any capital gains that you have already realized for the year. When considering year-end tax planning moves, it is also important to take into account the potential impact of such planning on the alternative minimum tax for 2022, so be sure to consult with your tax attorney.

If you’re on the higher end of income earners, be wary of the additional 0.9% Medicare tax that applies to individuals receiving wages with respect to employment in excess of $200,000 ($250,000 for married couples filing jointly and $125,000 for married couples filing separately).

Retirement Planning for 2022

It’s never the wrong time to put a little extra focus on your retirement planning, especially towards the end of the year as tax-saving opportunities continue. As a taxpayer, you still have the ability to convert funds in a traditional IRA (including SEPs and SIMPLE IRAs), §401(a) qualified retirement plans, §403(b) tax-sheltered annuities or §457 government plans into a Roth IRA. You also might want to consider converting money which is currently invested in depressed stocks (or mutual funds) into a Roth IRA if you are eligible to do so.

These are just a few of the year-end tax planning considerations that you can make before the calendar turns to 2023, so make sure to consider your options while you still have time. And don’t forget that your taxpayer circumstances are unique, so not all of these suggestions will benefit everyone. To ensure that your specific needs are considered, discuss any techniques with a qualified tax advisor before making any changes.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Elizabeth M. Siefker is an attorney at Fraser Trebilcock in the trusts and estates practice group focusing on estate planning, elder law, and business planning. You can reach her at esiefker@fraserlawfirm.com, or at 517.377.0801.

Why You May Need a Certificate of Trust When Selling Real Estate in Michigan

A last will and testament and a living trust are two of the most common estate planning methods. A living trust is attractive for many because it provides for an efficient and effective disposition of assets to loved ones, and unlike a will a living trust avoids probate court.

Once a trust is established it must be funded. Funding a trust is the process of transferring ownership of assets from the individual(s) who established the trust to the trustee of the trust, which involves titling assets in the name of the trustee. In almost all cases, the person who establishes and funds the trust also names himself or herself the trustee who has the right to manage all of the money, property, and assets that are placed inside of the living trust.

One asset that many people put in their trusts is real estate, be it a primary residence, vacant land, or otherwise. In Michigan, to the extent that a trustee decides to sell real estate that is part of a living trust, a certificate of trust will be required at or before the real estate closing.

What is a Certificate of Trust in Michigan?

Up until a few years ago, there were two different types of certificates of trust used in Michigan. One type was used for real estate transactions and the other was used mainly for financial transactions involving a trust.

Each type was governed by a different set of laws with quite different requirements. While each set of laws used the term “certificate of trust existence and authority,” one set was found in the statutes relating to Conveyances of Real Property and the other set was in the Michigan Trust Code. In 2018, as discussed below, Michigan law changed to harmonize the two statutes, simplifying our laws, reducing costs, errors, and confusion.

New legislation was signed into law in 2018 that, in essence, consolidated the two types of certificates of trust into one. Pursuant to the current law, a certificate of trust must include:

The name of the trust, the date of the trust, and the date of each operative trust instrument.
The name and address of each current trustee.
The powers of the trustee relating to the purposes for which the certificate of trust is offered.
The revocability or irrevocability of the trust and the identity of any person holding the power to revoke the trust.
The authority of co-trustees to sign on behalf of the trust or otherwise authenticate on behalf of the trust and whether all or less than all co-trustees are required to exercise the trustee powers.
A statement that the trust has not been revoked, modified or amended in any manner that would cause the representations included in the certificate of trust to be incorrect.

The certificate of trust may be signed or otherwise authenticated by the settlor, any trustee (including a successor trustee), or an attorney for the settlor or the trustee.

Do You Need a Certificate of Trust?

If you have a living trust, a certificate of trust will help the trustee open new financial accounts without needing to provide the entire trust. To the extent that real estate is in your trust, and you desire to sell it, the title company will require you to have a certificate of trust. Often, trustees are unaware of the need for a certificate of trust as part of the sale and are left scrambling in final days prior to the closing. If you are about to sell real estate titled in your name as trustee, you should obtain a certificate of trust early in the process to eliminate the stress and possible delays caused by not having the proper paperwork.

Even if you have a certificate of trust, it may need updating depending on when it was created. Because of the requirements imposed by the new statute, many certificates of trust that were created prior to 2018 are invalid. Additionally, since trustees and their addresses change from time to time, older certificates of trust are often out of date.

If you require assistance, the experienced trusts and estates and real estate lawyers at Fraser Trebilcock can provide the guidance you need. Please contact us.

Chair of Fraser Trebilcock’s Trusts and Estates Department, attorney Marlaine C. Teahan is a Fellow of the American College of Trust and Estate Counsel, and is the past Chair of the Probate and Estate Planning Section of the State Bar of Michigan. For help getting necessary legal authority for your loved one’s COVID-19 vaccine consent form, contact Marlaine at 517.290.0057 (cell) or mteahan@fraserlawfirm.com.

The Importance of Up-to-Date Estate Planning During COVID-19

The recent surge in the coronavirus pandemic across the country has reminded all of us that a return to “normal” is far from imminent. The public health and economic crises caused by the pandemic have had many secondary effects, one of which is that we have all been reminded of our own mortality. For many people, this has sparked a renewed and urgent interest in estate planning, including creating, updating and/or finalizing estate planning documents.

For those who have been holding off on estate planning, the uncertainty of the current moment should serve as motivation to act. Without an estate plan in place, an incapacitated individual will be faced with the unpleasant prospect of having state law and probate courts determine who will be responsible for their financial affairs and healthcare decisions. A thoughtful, up-to-date estate plan, on the other hand, provides peace of mind for you and your loved ones and allows you to control where your assets go at your death.

At any time, but especially during times like these, there are several key estate planning issues that you should review with an estate planning attorney.

Is Your Will or Living Trust Up to Date?

The first step in estate planning is making sure that you have at minimum the following documents: a will, durable power of attorney, and patient advocate designation. For many, a living trust (revocable grantor trust) will be the centerpiece of their estate plan, allowing for an orderly management of assets during times of incapacity, the avoidance of probate, and the orderly distribution of assets at death. Even after these documents are in place, they should be reviewed and updated, as appropriate, every few years. Periodic review with an estate planning attorney allows you to ensure that choices you previously made, such as the beneficiaries of assets upon your death and the appointment of financial and healthcare representatives during your life, are consistent with your current preferences, and appropriate based on current law. Over time, as assets grow and additional assets are added to your portfolio, trust funding and estate planning goals need to be revisited.

Is Your Trust Funded?

A revocable grantor trust (commonly called a “living trust”) protects spouses, children and those with special needs; a properly drafted and funded trust can also help reduce or eliminate federal estate taxes. The terms of a trust may include who will control your assets upon your disability or death and may provide for gifts to charity, family, and friends. One of the most important benefits of a trust is that it allows an estate to be administered outside of probate court. However, for a trust to serve this purpose, it must be fully funded.

Funding a trust involves retitling assets, such as a home and financial assets, into the name of the trust, and designating the trust as the beneficiary of certain assets, such as life insurance and retirement accounts. Failure to fund assets into a trust means that such assets may not go to intended beneficiaries. In my experience, many clients fail to follow through with funding after establishing a trust. Every time a trust is reviewed and updated is a good time to review funding issues.

Given the recent passage into law of the SECURE Act and the CARES Act, special care must be given to how beneficiaries are designated for qualified retirement accounts such as IRAs and 401(k)s. Based on your circumstances and estate planning goals, these accounts are sometimes designated for specific beneficiaries and other times the trust is more appropriately designated as the beneficiary.

Are Any Changes Required to Your Durable Powers of Attorney and Patient Advocate Designations?

A durable power of attorney is a legal document that empowers a representative of your choosing, called an agent, to have authority to manage your financial affairs. A patient advocate designation is a legal document that names another individual as a patient advocate to make medical decisions on your behalf, in accordance with your wishes, once two doctors certify that you are unable to communicate decisions regarding your medical or mental health treatment. Having a durable power of attorney and a patient advocate designation in place is critically important, particularly in a time of a global pandemic.

At the time of your inability to act, if you have not designated an agent and a patient advocate, no one will be legally authorized to act on your behalf. Family members will be forced to go to probate court, expending time and incurring expenses, to request appointment of a conservator and a guardian to handle these responsibilities.

Are There Tax Planning Strategies You Should be Considering?

Federal estate, gift and generation skipping transfer tax exemptions are generous under federal tax law but may not always be. Currently, the federal estate tax exemption is $11.58 million per person, reduced by lifetime taxable gifts. For deaths after December 31, 2025, the exemption is set to drop to a $5 million base instead of the current $10 million base, as adjusted by a cost of living allowance. However, it is possible, depending on the outcome of the upcoming 2020 election that the unusually high exemption amounts may be reduced even sooner than the end of 2025. Many high net worth individuals are making large gifts of their remaining federal estate tax exemptions in order to fully use them. The saying, “if you don’t use it, you’ll lose it,” applies fully to the federal estate tax exemption.

Given the current low interest rate environment, and the massive national debt (nearly $27 trillion as of the time of this writing), it’s unlikely that we will see more favorable exemptions in the years to come. Now is a good time to consider which estate tax planning strategies would be beneficial for you and your family. Options include gifts of assets outright or in trust, making intrafamily loans, creating spousal lifetime access trusts, creating grantor retained annuity trusts, and making non-taxable gifts directly to educational institutions to fund education for grandchildren, and other charitable donations.

While the Department of Treasury has made clear that if you fully utilize your current federal estate tax exemption now, but at death the applicable exclusion amount is lower, there will be no claw-back of assets into your estate of amounts over the then-applicable exclusion amount. However, if you fail to use your full federal estate tax exemption before it is reduced, you will forever lose the option to do so.

For example, under current law, if you currently have $11.58 million, you cannot give away assets now of $5.58 million and expect that in 2026 you will still have $5 million in assets to give tax free at death. Instead, if you give $5.58 million away now and die in 2026, the full $5 million remaining at your death will be subject to federal estate tax. Conversely, if you give away $11.58 million now and die in 2026 with no other assets, you will not have a taxable estate at death and no federal estate tax will be due.

Do You—and Do Your Designated Fiduciaries—Know Where Your Estate Planning Documents Are?

One important goal of estate planning is to create peace of mind for yourself and your loved ones. For all of us, getting our affairs in order is the responsible thing to do so that when we die or become incapacitated, our loved ones aren’t left to clean up a mess.

The simple act of making sure that you and your designated fiduciaries know where your estate planning documents are located is often overlooked but can prevent unnecessary confusion and frustration. I advise my clients to store their documents in a safe and secure location, and to inform fiduciaries of how to access them. In most instances, it’s advisable to inform designated fiduciaries where to find your important estate planning documents, and in some instances, to provide fiduciaries with a copy. It is helpful to also inform your fiduciaries of the name and contact information of the estate planning attorney who created the documents.

Now is the Time to Act

The COVID-19 pandemic has laid bare the importance of having an up-to-date estate plan. Despite the need for social distancing, we can help our clients create, update, and execute their important documents, such as wills, trusts, powers of attorney, and patient advocate designations, either in person or through remote audio/video technology. To move forward with your estate planning priorities, please contact Marlaine C. Teahan at mteahan@fraserlawfirm.com or 517.377.0869.

We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.

Chair of Fraser Trebilcock’s Trusts and Estates Department and serving as Secretary/Treasurer of the firm, attorney Marlaine C. Teahan is a Fellow of the American College of Trust and Estate Counsel, and is the past Chair of the Probate and Estate Planning Section of the State Bar of Michigan. For help with your estate planning needs, contact Marlaine at 517-377-0869 or mteahan@fraserlawfirm.com.

Year-End Tax Planning Considerations

For many people, the end of the year tends to sneak up on us in a whirlwind of winter weather activity, family gatherings, and holiday festivities. However, even as 2018 draws to a close, it’s not too late to think about your year-end taxes, and engage in estate & income tax planning opportunities. At Fraser Trebilcock, our tax attorneys have made sure you don’t have to start your preparations from scratch, with a two-part checklist of year-end tax considerations you should make before 2019.

Continue reading Year-End Tax Planning Considerations

Disabled Veteran’s Property Tax Exemption Complicates Revocable Trust Planning

What does it mean to “own” something? Owning something means different things to different people. Owning something suggests a sense of full control over something. It also implies being able to enjoy the benefits of it and be responsible for something, together with the consequences or damages to it or by it. Recently, however, the Court of Appeals in The Joanne L. Evangelista Revocable Trust v City of Farmington Hills, Court of Appeals (Dkt. No. 334263 issued November 14, 2017), examined what it means for a veteran to “own” their home for purposes of a property tax exemption.

Michigan allows a generous 100% property tax exemption for disabled veterans who meet a handful of requirements, including that they “own” their home. Michael Evangelista served in the United States Army during Vietnam and was honorably discharged in 1971. The Veterans Administration rated Michael 100% disabled. Both Michael and his wife lived at their home in Farmington Hills, Michigan. The legal title to their property was held by his wife’s revocable trust.

The Court in Evangelista reasoned that the disabled veteran’s exemption requires that the property in question be “owned and used as a homestead” by the disabled veteran. A homestead (re: principal residence) must be owned and occupied by an owner. An “owner” is the holder of legal title, or if a land contract is in place, by the most recent land contract vendee/buyer (embracing the concept that an “owner” in this situation is the one who enjoys all of the benefits and is responsible for the burdens of ownership without naked legal title). There was no dispute in this case that the trust, not Michael, held legal title to the property. The Court ruled that because Michael was not an “owner” of the property, he was not entitled to the exemption.

The appeals court also rejected the veteran’s claim that he was an equitable co-owner of the property by virtue of his marriage to his wife (who he contended “owns” the property through her trust). Having conveyed his complete interest in the property to the trust in 1998, and the trustee having the sole ability to convey or dispose of trust property, the appeals court said it was difficult to see what interest the veteran possessed in the property, equitable or otherwise. The appeals court also said that to the extent the State Tax Commission’s Transfer of Ownership Guidelines imply that the ownership requirement can be satisfied by the situation where a disabled veteran holds no legal title and is at most a contingent future beneficiary of the trust that holds title, such an implication is contrary to the plain language of the statute.

Transferring property to a revocable trust has a number of advantages for elderly and disabled couples. For example, as couples age, become ill and unable to properly manage their finances and property, a spouse can remain as trustee or another trustee can be selected to manage and protect their home and other assets. Revocable trusts give couples these benefits as well as the benefit of avoiding probate of the home.

Given the value of the property tax exemption for disabled veterans, they and their advisors should carefully consider how the title to the veteran’s principal residence should be held for estate planning purposes and eligibility to claim Michigan’s generous property tax exemption.

Fraser Trebilcock attorney Paul V. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or pmccord@fraserlawfirm.com.

Chair of Fraser Trebilcock’s Trusts and Estates Department, attorney Marlaine C. Teahan is a Fellow of the American College of Trust and Estate Counsel, and is the Chair of the Probate and Estate Planning Section of the State Bar of Michigan. For help with revocable trust planning or to answer any questions regarding this recent case, contact Marlaine at 517-377-0869 or mteahan@fraserlawfirm.com.

Should You Consider Long-Term Care Insurance?

It is very difficult to predict whether you or a loved one will one day need long-term care insurance. A diagnosis like Alzheimer’s disease or another dementia can drastically change your life and your financial plans. With an estimated five million Americans currently diagnosed with the disease, and a new diagnosis every 66 seconds, Fraser Trebilcock attorney Melisa M. W. Mysliwiec says it’s important to plan ahead.

“We don’t know if we’re going to get Alzheimer’s or anything like that. I think the best thing is to have your team of advisers. 30’s, 40’s, 50’s, is a good time to meet with an attorney, get estate planning documents put in place so there’s someone to act on your behalf if you become unable to,” Melisa said in an interview with WILX News 10’s Ann Emmerich. Other important advisors to have on your team include a financial planner, accountant, and insurance agent.

These critical estate planning documents include: durable powers of attorney and patient advocate designations. You’ll also want to closely review assets and your financial plans with a financial planner when considering an investment in long-term care insurance. Long-term care insurance isn’t for everyone and a financial planner can assist in making that determination. This is especially important, Melisa says, because even if you decide to buy long-term care insurance, the plan you choose will affect how much the insurance covers.

“There’s a big difference between getting a hundred dollars for help with care at home, versus paying privately in a nursing home which might be $250 or $270 dollars a day. So you really want to look at how much you can get per day and then there’s usually a cap on how many years it will pay out, too,” she said.

On average, people with Alzheimer’s live ten years with the disease, or longer, according to the Alzheimer’s Association. This means that families are left to pay for additional medical and living expenses for prolonged periods of time. So not only does the disease progressively devastate the health of the patient, it also takes a financial toll on families.

To read more about long-term health insurance, and hear one woman’s personal struggle with paying for her husband’s care after he was diagnosed with Alzheimer’s disease, read News 10’s full story here.

It’s important to note that even if you have long-term care insurance, you may ultimately have to rely on Medicaid. Recent rule changes could affect how much you receive from Medicaid without any penalties. Melisa explains why your caretaker agreement should be Medicaid-compliant, even before you decide to apply for Medicaid, in this blog.

If you have more questions about putting together a plan in case you or a loved one are diagnosed with Alzheimer’s disease, attorneys Melisa Mysliwiec and Paula M. Manderfield will be presenting on Alzheimer’s Legal and Financial Planning on Wednesday, March 8 at MSU Federal Credit Union’s East Lansing Branch, from 6-7:30 p.m. Advance registration is requested.

An Evaluation of Estate & Tax Planning Options

It seems that for the foreseeable future, the federal estate tax will continue to affect only the very wealthy Americans. The currently high federal estate tax exemption, coupled with the portability feature, means that for most Americans, the federal estate tax is no longer the driver that it had been, which required extensive estate planning. For many people, it may be that a basic trust which simply gives all of one’s property to their surviving spouse, and then passes it all on to their descendants at the death of the surviving spouse, may be all that is needed. This all might suggest that “credit shelter trusts” (also called A/B trusts) and other forms of estate tax planning are needless for many clients except for the very wealthy. However, whether or not the estate may conceivably exceed the various federal estate and gift that limits is not the only consideration in estate planning. There might be other reasons to create additional trusts.

To set the table, current law permits spouses to leave any amount of property to their spouses, if the spouses are U.S. citizens, free of federal estate tax. Further, the estate tax applies only to individual estates valued at more than $5.45 million ($10.90 million for couples). The lifetime gift tax exclusion – the amount you can give away without incurring a tax – is also $5.45 million. But you can still give any number of other people $14,000 each per year without the gifts counting against the lifetime limit and gifts to charities are not taxed.

Further “portability” has simplified estate planning for many small and medium size estates. Falling into the category, “if you can take it with you . . . ” the estate tax exemption is “portable” meaning if the first spouse to die does not use all of his or her $5.45 million exemption, the estate of the surviving spouse may use it. In theory, this doubles the available exemption for a couple at the death of the surviving spouse, assuming the estate assets would have passed tax free to the surviving spouse at the death of the decedent spouse, by means of the “marital deduction” (whereby one spouse may make an unlimited transfer to the other with no tax owed). For example, John dies in 2016 and passes on $3 million. He has no taxable estate and his wife, Mary, can pass on $7.90 million (her own $5.45 million exclusion plus her husband’s unused $2.45 million exclusion) free of federal tax. However, to take advantage of portability, the surviving spouse (Mary in our example) must make an “election” on the decedent spouse’s (John’s) estate tax return.

With the high federal estate tax exemption, coupled with the portability, why complicate the small or medium size estate with more than a simple trust? Consider the case where there are children of a former marriage and/or a chance of remarriage by the surviving spouse. A simple trust which gives all the property and control to the surviving spouse would take away from the deceased spouse any control over whether the assets will be distributed as they wanted – to their own heirs. Here, other trusts may be employed to limit the surviving spouse’s control over what happens to the assets.

A Qualified Terminal Interest Trust (“QTIP”) is generally employed for this. Under this arrangement, the surviving spouse does not obtain the assets directly, but they are held for his/her benefit by a Trustee. There are rules and limitations in the trust about how the assets are to be distributed, which the Trustee must follow. Perhaps the biggest limitation is that the surviving spouse does not have the power to leave the assets to anyone other than the beneficiaries named by both spouses in the Trust. Although in many cases the surviving spouse is the Trustee, they cannot deviate from the requirements of the Trust.

Another type of trust which may be useful is the “Bypass Trust”. This actually removes assets from the estate of the surviving spouse, entirely, while still allowing him/her to obtain interest from the assets until death. With this trust, the property is legally transferred to the children, but in trust, and not actually paid out to them until the death of the surviving spouse. While this type of trust has important application in estates which are above (or are anticipated to grow above) the exemption amount, it also has application in smaller estates.

Using a Bypass Trust can aid in planning for capital gains taxes. Assets allocated to the trust “step-up” in basis upon the death of the first spouse, whereas assets passing to the surviving spouse will only “step up” at the time of her death. This can cut both ways. Where an appreciated asset is to be sold prior to the death of the surviving spouse, it may be advantageous to have a step-up occur at the death of the first spouse, so that the tax hit will be less upon the sale. Conversely, if it is not be sold prior to the survivor’s death, it may be beneficial to wait for the “step up” to occur later, when the asset has appreciated even more (although, the possibility of a “step-down” should not be ignored).

It is often unclear at the time that the estate plan is drafted whether or not a Bypass Trust would be helpful. As a result, many people use a “disclaimer trust”. This basically gives the surviving spouse the ability to decide – at the time her spouse passes away, whether to accept all of the decedent’s property or to “disclaim” (give up) a portion and put it into a Bypass Trust. The advantage is that the status of the estate and need for special planning will be much clearer at the time of the first death, than when the Trust instrument was originally drafted. This flexibility would protect the estate where it has grown more than anticipated, or to determine whether the basis “step up” is more useful than not.

The bottom line is that while changes in the federal estate tax have simplified many aspects of estate planning for most clients, no estate plan should be adopted or continued without a through and specific review of the assets, needs and plans of the individuals involved. Nothing in the law is permanent, nor are the circumstances of our clients’ lives. Clients should be encouraged to review their estate plans every three to five years to ensure that their plans are meeting their needs and ever changing goals.

Proposal Would Give Medicare Patients More Access to Preventative Care for Diabetes, Alzheimer’s

Proposed rules issued by the Centers for Medicare and Medicaid (CMS) would mean that those living with conditions like Diabetes and Alzheimer’s disease would have access to more preventative care. Continue reading Proposal Would Give Medicare Patients More Access to Preventative Care for Diabetes, Alzheimer’s

Estate Strategies Summer Newsletter

Fraser Trebilcock’s Summer 2015 Estate Strategies newsletter contains valuable information on a variety of Trusts and Estates topics, including:

A look at how the Supreme Court ruling in Obergefell v. Hodges impacts Michigan trust & estate laws.
Important information on how to name your own patient advocate, 10 years after the death of Terri Schiavo made national headlines.
Major revisions to federal estate tax laws will result in more joint trusts. So what is a joint trust, and when is it used?

Inside, you will also find an invitation to join our team for the Walk to End Alzheimer’s in Lansing, as well as a brief chance to get to know our Trusts & Estates Attorneys. To view the newsletter, click here: Fraser Trebilcock Trusts and Estates Summer Newsletter 2015

If you have questions, please contact Marlaine C. Teahan, Chair of the Trusts and Estates Department, at mteahan@fraserlawfirm.com or 517-377-0869.

If you’d like to receive these newsletters automatically, please let us know by filling out the contact us form on our website, and checking the box that reads: “Please send me the Fraser Trebilcock Newsletter”. Click here for a direct link.