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 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.

Teahan, Marlaine

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

Attorney Marlaine Teahan Keynote Speaker at January Meeting for the Ingham County Bar Association’s Probate and Trust Law Section

Attorney Marlaine Teahan speaking at ICBA meetingMarlaine C. Teahan was the keynote speaker at the January 2018 meeting of the Probate and Trust Law Section of the Ingham County Bar Association (ICBA). Her topic was “How to Mend a Broken Trust,” in which she taught fellow probate and estate planning attorneys from Ingham County how to modify, terminate, and reform trusts that aren’t working as intended, using judicial and non-judicial agreements.

Marlaine was a former co-Chair of the ICBA’s Probate and Trust Law Section and is currently the Chair of the State Bar of Michigan’s Probate and Estate Planning Section. In addition, Marlaine is a Fellow of The American College of Trust and Estate Counsel and was named for the 4th year in a row as one of Michigan’s Top 50 Female Attorneys by Super Lawyers.

Fraser Trebilcock Hosts Ingham County Probate Court Summer Interns

On August 3, 2017, the Trusts & Estates Department of Fraser Trebilcock hosted a luncheon for 10 Ingham County Probate Court interns. Attorneys Marlaine C. Teahan, Mark E. Kellogg, Melisa M.W. Mysliwiec, and Shaina R. Reed lead discussions on:

  • future employment opportunities in the area;
  • differences among solo, small, medium or large firm practices;
  • life as a practicing attorney in the area of Trusts & Estates; and
  • benefits of a student membership in the State Bar of Michigan and the Probate and Estate Planning Section.

The interns explained their responsibilities at probate court and shared stories of participating in probate court hearings as both investigator and guardian ad litem. One intern found the probate court a thrilling place to learn. All agreed that their summer internship experience helped them grow, personally and professionally, and helped them learn more about what they want to experience in their future work as an attorney.

Fraser Trebilcock is proud to partner with the Ingham County Probate Court in informal gatherings with summer interns. Last year the interns met with the associates of Fraser Trebilcock to learn about life as a new attorney in a mid-size, full service Michigan firm. We look forward to future luncheons and wish this year’s summer probate court interns success as they return to school. Many thanks to Scott J. DeWeerd, Deputy Probate Register, for helping make this luncheon happen.


Client Alert: Estate and Gift Tax Limits Announced for 2017

TTrusts & Estates - Fraser Trebilcockhe IRS has issued the estate and gift tax limits for 2017 (Rev. Proc. 2016-55). For an estate of a person dying in 2017, the basic exclusion amount is $5,490,000 for determining the credit against federal estate tax. This means that for a person dying in 2017, no federal estate tax will be imposed if his or her gross estate is less than $5,490,000. Therefore, with proper estate planning, an individual could transfer up to $5,490,000, or a married couple could transfer up to $10,980,000, to their children without paying federal estate tax.  The basic exclusion amount  for 2017 was adjusted for inflation up from the 2016 amount of $5,450,000.

In 2017, the first $14,000 of gifts of a present interest made to any person is not included in the total amount of taxable gifts. For example, a person can gift up to $14,000 of a present interest from January to December 2017 without reporting the gift to the IRS, without using any lifetime gift tax exemption, and without paying gift tax. However, if you are a married couple wanting to make a similar gift, slightly different rules apply.  Gifts to a spouse who is a United States citizen are not restricted by this $14,000 limitation. For gifts to a spouse who is not a United States citizen, the first $149,000 of gifts of a present interest are not included in the total amount of taxable gifts that must be reported to the IRS.

Other gifts not restricted by the $14,000 limitation include qualified gifts paid directly to institutions for educational or medical purposes. A qualified gift would include direct payment to a college or university for another person’s tuition or direct payment to a hospital for another person’s medical bills.  The annual exclusion amount for gifts is periodically adjusted for inflation but adjustments do not happen every year. For example, the $14,000 exclusion amount for gifts for 2017 is the same as it was in 2016.

Stay tuned for updates on what tax changes may come out of the 115th United States Congress. It is expected that tax reform, in one shape of another, will happen. We will keep you up-to-date on changes that may impact your income, estate and gift taxes.

Teahan, Marlaine

For help understanding these estate and gift tax limits, or for reviewing your will or trust under these new tax limits, contact Marlaine C. Teahan, chair of Fraser Trebilcock’s Trusts and Estates Department. Marlaine can be reached at 517-377-0869 or

How Are Michigan Trusts & Estates Laws Impacted by Obergefell v. Hodges?

supreme court - paper dolls - rainbow

The Supreme Court’s ruling in Obergefell v. Hodges will have wide-ranging implications across the country. The impact on estate planning and the administration of trusts and estates in Michigan is  staggering. The Obergefell ruling dictates that same-sex couples may exercise the fundamental right to marry. This is a constitutionally protected right from which other rights of same-sex married couples flow. To assert these fundamental rights, individuals need not await legislative action; however, it is expected that all States, including Michigan, will update their statutes to comport with the Obergefell ruling. Once non-conforming laws are updated, exercising these rights will be easier. A summary of rights impacting trusts and estates, that flow from a same-sex couple’s fundamental right to marry, are outlined below.

Estate Planning and Tax Issues

Before Obergefell, with proper planning, same-sex couples could provide for each other and designate each other as a fiduciary, just as heterosexual married couples. Even so, married same-sex couples, even those living in non-recognition states such as Michigan, did not have equal federal estate and gift tax advantages as heterosexual married couples until after the United States v. Windsor case in 2013. After Obergefell, married same-sex couples, living in any state, will be given equal tax treatment in their state of residence. For example, same-sex married couples will no longer have to file separate state and federal tax returns but will need to prepare only one federal tax return on which to base their income tax filings. Same-sex married couples should discuss with their tax preparer if it would be worthwhile seeking refunds for prior years. In states other than Michigan, that have inheritance and state estate taxes, same-sex married couples will now be able to inherit from each other without having to pay these taxes.


Same-sex married couples will now have priority in the probate court to serve as personal representative, conservator, guardian, and, under Michigan Court Rules, will be identified as an interested person (heir or spouse) and have the right to receive notice of a variety of probate proceedings. In addition, all surviving spouses have the right to inherit under the intestacy laws, to elect against their spouse’s will, receive statutory spousal allowances, and petition for proceeds from wrongful death actions.

Medical Issues

Michigan has next-of-kin laws that allow spouses, in certain circumstances, to make medical decisions, anatomical gifts, and determine funeral and burial rights of their spouse. Before Obergefell, same-sex married couples did not qualify as their spouse’s next-of-kin because Michigan did not recognize the marriage of the couple. These rights will now be recognized for all married couples in Michigan.

Family Law

Same-sex couples may now marry in Michigan and same-sex marriages solemnized in other states must now be recognized by Michigan. All married couples in Michigan will be able to get a divorce and adopt their spouse’s child or adopt children together. Visitation, child support and custody decisions will also be impacted by Obergefell. Family law issues were specifically addressed by the Obergefell Court; having children and raising a family is a protected constitutional right of same-sex couples.

Governmental Benefits and Creditor Issues

Governmental benefits, such as Social Security, Veterans benefits, and Workers’ Compensation, in many cases depend on state law and, until now, such benefits were not available to spouses of married same-sex couples. Spousal rights, in life and as a surviving spouse, are aspects of one’s marital status that are constitutionally protected.

Creditor protection will be greater for married same-sex couples as they will be able to benefit from owning real property as tenants by the entireties and will be able to own certain other financial assets as tenants by the entireties, including membership interests in an LLC. Insurance on the life of a spouse, that names a spouse as a beneficiary, enjoys certain creditor protection that should be available to all married couples.

Real Property

There are numerous real property issues that will be affected by Obergefell; however, only a few are discussed here. Obergefell may well be the end of the archaic law of dower in Michigan. Tenancy by the entireties protection was previously enjoyed by only a “husband and wife.” Going forward, such protection will be enjoyed by any married couple. The uncapping of real property taxes will also be impacted as conveyances to spouses are generally exempt from uncapping laws.

General laws

There are numerous Michigan laws that will have to be updated given the Obergefell v. Hodges case. A cursory check on the uses of both “husband” and “wife” in all of Michigan’s Compiled Laws reveals over 300 statutes that use these terms. Perhaps each instance of “husband” or “wife” will be changed to “spouse” but, in any event, it will be a long process as all such laws will have to be carefully reviewed, bills drafted, and legislation enacted.

It may be difficult for a same-sex couple to assert the rights discussed above prior to the updating of Michigan law.  This is simply because many of the laws specifically use the words “husband” and “wife” instead of “spouse.” A key passage in Obergefell addresses this issue and provides a path of action until our laws are changed [Slip Op., at 24]:

The dynamic of our constitutional system is that individuals need not await legislative action before asserting a fundamental right. The Nation’s courts are open to injured individuals who come to them to vindicate their own direct, personal stake in our basic charter. An individual can invoke a right to constitutional protection when he or she is harmed, even if the broader public disagrees and even if the legislature refuses to act.

It will be many years before Michigan’s statutes fully comport with the recent Supreme Court ruling in Obergefell. This process is already underway by the Michigan Law Revision Commission.  Click HERE to see more information on this project.

This blog serves as a general summary of the Obergefell decision and does not constitute legal advice. Our lawyers at Fraser Trebilcock will continue to monitor changes in order to assist with your trust & estate planning needs. If you have questions or would like more information, contact attorney Marlaine C. Teahan. Marlaine chairs the Trusts and Estates practice at Fraser Trebilcock and handles a wide variety of matters including: drafting wills, trusts and durable powers of attorney; trust and estate administration; guardianship and conservatorship matters; and probate litigation. To learn more about how to put together your own estate plan, contact Marlaine at 517.377.0869 or


Knowing Who to Trust: Upcoming Estate Planning Seminar

HandsFor many people, the estate planning process can be overwhelming. In this digital age, it can also be hard to know who to trust to guide you through the process. If this sounds familiar, an upcoming seminar can help you learn where to turn, and how to avoid common estate planning mistakes.

Continue reading Knowing Who to Trust: Upcoming Estate Planning Seminar

Digital Assets, Trust Drafting Tips Addressed in Recent Presentation

When putting together estate planning documents, most people make gifts of personal and real property.  Often overlooked however, are digital assets, such as social media accounts, emails, files stored in the cloud, and iTunes or PayPal accounts.  If you don’t consider how your digital assets will be handled at your disability or death, you may be missing a critical step in the estate planning process.  Continue reading Digital Assets, Trust Drafting Tips Addressed in Recent Presentation

Making a Case Against DIY Estate Planning

Lowe’s and Home Depot have made DIY (Do It Yourself) projects a household name.  Easy directions, helpful advice, and available materials make building a shed, planting a garden, or fixing the plumbing within reach of the average lay person.  Of course, we never hear of DIY brain surgery or DIY root canals.  Why then do many folks think DIY estate planning is a good idea?

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Estate Strategies Spring Newsletter

Fraser Trebilcock’s Spring 2014 Estate Strategies newsletter contains valuable information on a variety of Trusts and Estates topics, including:

  • Estate planning for digital assets, such as email and iTunes.
  • Property tax relief now available for disabled veterans in Michigan.
  • Information on when to consider a gun trust.

Continue reading Estate Strategies Spring Newsletter