Attorney & Mediator
Attorney & Mediator

LADY BIRD DEEDS ARE BACK !!

Clients are always interested in how to transfer their property to their heirs without the need to go through probate court at the time of their death. Another goal is to assure that the property taxes on long held real property do not uncap upon the transfer to the next generation.

For a period of time, we have been unable to accomplish both of these goals using a Lady Bird or enhanced life estate deed. This is due to the fact that while the amendments to the property tax laws had provided for transfers by jointly held property and transfers by a revocable trust to pass to the next generation without uncapping the taxes, it did not provide for the same result specifically for enhanced life estate deeds. Because of this, the state of Michigan and all local assessors would uncap property if held under a Lady Bird or enhanced life estate deed when the original owners died.

The law has now been amended to include Lady Bird or enhanced life estate deeds. The application of the law is retroactive to December 31, 2014. Therefore, these deeds are now effective for a transfer to the next generation upon the death of the original owners who die on or after January 1, 2015. The property will transfer without the need for probate and the property taxes will not uncap.

This is great news for clients who are not interested in a trust and have worked out most of their post-death transfers using beneficiary designations and transfers on death. They now can take advantage of a Lady Bird Deed to transfer their property to their children leaving little or nothing to run through the probate process.

Probate & Estate – When someone dies – do you need professional assistance?

Some families are confused as to whether they should seek professional assistance upon the passing of a loved one.  It may be a prudent move to have a consultation with an attorney and accountant to evaluate what you may need assistance with.

These are the legal and tax procedures that the lawyer will assist with in probating and administering the decedent’s estate.

  1. Review and analyze the provisions of the Trust and/or Will.
  2. Submit the Will to the Probate Court, if necessary.
  3. Arrange for termination of joint tenancy assets so that surviving joint tenants get the assets
  4. File petition for Probate and Appointment of Personal Representative of will, if appropriate
  5. Assist in the collection of insurance policies, wage claims and retirement benefits
  6. Guide and counsel the Personal Representative in administering the decedent’s estate:
  • Opening Personal Representative bank account
  • Locating assets
  • Valuing the assets
  • Preparation of death tax returns
  • Payment of death taxes
  • Payment of debts
  • Financial and investment decisions
  • Income tax and death tax decisions
  • Sale or exchange of property
  • After death tax planning
  • Elections under tax laws
  • Timing of distributions and closing estate
  • Disclaimers by survivors and beneficiaries.
  • Lawsuits on behalf of decedent
  • Management of property
  • Continuation or liquidation of business
  • Prepare and file decedent’s final income tax returns
  • Review with family members the impact of decedent’s death on their estate planning.  Redraft wills, trusts, make gifts and review documents.
  • Review duration of administration and probate, and explain all procedures to family members and personal representatives.

Probate & Estate Issues – What to do when someone dies?

Most people are in a state of confusion when a death occurs.  What should they do?  First, second, and so on. 

 Things for the family to do:

  1. Evaluate the emotional effect of the death on the surviving spouse, children or close relatives.
  2. If necessary, decide on procedures to care for dependent children and surviving spouse, if incapacitated.
  3. Evaluate the need for security at decedent’s residence and personal property.
    • Cancel home deliveries
    • Notify post office to hold mail.
  4. Decide on funeral arrangements
    • Contact clergy
    • Discuss donation of bodily organs to an organ bank.
    • Arrange for mortuary and burial or cremation.
    • Prepare obituary for publication.
  5. Consult the family lawyer or the lawyer the family wants to retain as either a legal counselor or as probate lawyer to handle the estate’s legal and tax matters.
  6. Evaluate the survivor’s cash needs for the next three (3) months.
  7. Evaluate the existence of and need to care for or sell perishable property.
  8. Keep records of all payments for funeral and other expenses
  9. Locate original Will and/ or Trust.
  10. Locate safe-deposit box.
  11. Locate life insurance policies.
  12. Meet with the lawyer you have selected
  13. Go to the safe-deposit box with the key.  At least two bank officers will be at the box opening.
    • Open the box
    • List all contents in detail on letter size paper or on a form provided by the bank.
    • Have all personals sign at the bottom of the list and date.
    • Put contracts back, except for will, life insurance policies and Trust.
    • If there is any danger of a Will contest or a conflict of interest between personal representative, family members or beneficiaries, do not go to the safe-deposit box without an attorney.
  14. Investigate:
    • Social security benefits
    • Life insurance collection
    • Union death benefits
    • Veterans burial allowance
    • Veterans benefits
    • Employee payroll benefits including:
      • Accrued vacation pay
      • Employee death benefit
      • Final wages
      • Ira Accounts
      • Retirement plan death benefits
      • Deferred compensation
    • Medical reimbursements to help pay for hospital and doctor bills.
    • Refunds on insurance or canceled subscriptions or any refunds.
  15. Check for Keogh plan/ IRA accounts
  16. Meet with C.P.A. as to tax and financial planning issues
  17. Get death certificates, usually from funeral director.  Depending on the situation, may need as many as 10 – 12.
  18. Meet with life insurance agent to collect proceeds or consider payment options.
  19. Notify liability insurance agent about fire, theft and public liability insurance on decedent’s assets.
  20. Do not pay any of decedent’s debts until the lawyer you have selected discusses them with family members or with the duly appointed personal representative.