Articles Posted in Michigan Elder Law

The SECURE Act (Setting Every Community Up for Retirement Act) passed into law effective January 1, 2020.   Although it is uncertain how the act was named, it is certain that this act will significantly impact estate, tax and income planning for baby boomers and their children.   This act will force Americans with IRAs and other “qualified assets” to recognize more income, upon inheritance.

For years, the IRS allowed beneficiaries of an individual retirement account (IRA) to defer their receipt of income over their individual lifetimes through the use of the stretch distribution provision.   This is no longer possible as the act changes the way in which a beneficiary can elect to receive his or her own share of a decedent’s account: either as a lump sum distribution or as a ten (10) year plan of distribution.   The inherited “stretch” IRA is no longer an option after January 1, 2020.  As a result, the government will begin to receive more taxes from inherited income beginning 2020 moving forward.

The act does provide some relief as it puts off the age for required minimum distributions (RMDs) until the age of 72, if you have yet to begin receiving your RMDs prior to 2020.   It also repeals the maximum age of which a person can contribute to his or her IRA; allows for expansion of 529 plans; and, provides credits to small businesses that setup automatic enrollment into their retirement plans.

A year into the “new VA regulations” it is clear that planning for VA benefits is still a viable longterm care planning strategy.   On October 18, 2018 as part of a comprehensive plan to help reorganize the Department of Veterans Affairs and benefit programs themselves, the VA finally adopted new regulations affecting the non-service related improved compensation benefit program or as we refer to it, A&A (aid and attendance).

Among the changes:

  • A three (3) lookback period.

11 former workers at the Kent County Home for Veterans face felony charges following a 2016 audit that revealed their mishandling of abuse case filings and staff shortages. Additionally, the staff reported doing 100% of room checks when only about 43% were actually completed according to video surveillance. Reports also showed that the facility faced staff shortages of sometimes as many as 22 personnel per day. Ninety percent of abuse and neglect reports were not passed on to the nursing director, according to the audit survey. The staff faces up to 4 years in jail in addition to $5,000 in fines for their mistreatment of the veterans.

Governor Rick Snyder replaced the current head of veteran affairs in Michigan as a result of the audit’s findings. He accepted his former campaign manager and Director of the Veteran Affairs Agency in Michigan, Jeff Barnes’s, resignation and appointed his current chief legal counsel, James Redford, in Barnes’s stead. Snyder says the findings of the audit are “deeply troubling” and that Michigan Veterans deserve better.

If a veteran you know is being neglected or abused please please contact SMDA for a free consultation so we can help them receive the appropriate compensation and care that they need and deserve.

Michigan Medicaid law is always evolving. Most changes will impact the ability for a family to become eligible to receive benefits to pay for the cost of nursing home care. A recent change creates a favorable planning opportunity for Michigan families seeking Medicaid benefits for a loved one. The regulation allows a community spouse to appoint his or her beneficiaries to the exclusion of the State of Michigan on a “Medicaid Approved Annuity”.

This change will effectively allow a community spouse (a husband or wife living at home while his or her spouse resides in a nursing home) to help protect his or her own assets. Medicaid Approved Annuities allow the well spouse to receive the value of the assets that a married couple owns, at the time of nursing home admission, that exceed qualification, in regular monthly payments over the duration of his or her life expectancy or less.

Most Michigan residents are shocked to learn that they can protect almost everything when a spouse enters a nursing home. Even more Michigan residents are elated to learn that a single person entering a nursing home can still protect more than half of his or her estate. Accordingly, if you have a family member entering a nursing home, it is important to understand the law. As elder law attorneys with experience in nursing home and long term care planning, we can help.

Michigan Vietnam Veterans living in the Detroit and Grand Rapids areas often seek advice related to agent orange exposure. These claims are known as “service connected” disability claims. Following a change in law in August of 2010, Vietnam Vets can seek disability benefits for “presumptive conditions”. These conditions can include type II diabetes, certain pulmonary conditions, and, ischemic heart conditions.

Although we cannot help most vets with service connected claims there are specific avenues veterans can pursue for assistance. Often while working with “non-service” connected pension issues and long term care planning, I come across useful resources for veterans seeking “service connected disability benefits”. Service connected benefits are the more often thought of benefits for veterans. This is the benefit that involves rating a veteran’s disability brought on directly from or during service and paying a monthly disability benefit.

A recent resource that I discovered is a website devoted to Vietnam Veterans and Agent Orange. A link to this website and newsletter can be found at: /

Many deserving veterans are often overlooked when considering VA benefits to assist with the cost of long term care. Specifically, Merchant Marines, serving during World War II may qualify for VA Aid and Attendance. During Worl War II, Merchant Marines took up arms to assist in the Pacific and Atlantic to support Allied forces and to ensure that precious cargo and supplies continued during the Period of Armed Conflict, December 7, 1941, to August 15, 1945.

Michigan Merchant Marines serving during this time, can qualify for the same VA benefits that are available to their United States Navy brethren. Such benefits can provide up to:

$2,120.00 per month for a married veteran $1,788.00 per month for a single veteran $1,149.00 per month for a surviving spouse
These benefits can be sued to provide for home care, assisted living or full nursing care. To find out more about these benefits, please call SMDA, P.C. at 1-866-529-3537; or, (586) 264-3756; or, (616) 931-3670. If you do not immediately qualify to receive these benefits, you can, through planning.

Now that you know the basic information about fiduciaries from our Fiduciaries: A Closer Look blog article, it is time to consider which individuals or entities are appropriate for these positions. If you live in Metro Detroit or West Michigan we can help you with your estate planning, but first you need to determine who will serve as your fiduciaries.

Personal Representative

The term personal representative applies to testate and intestate administration and replaces or includes the former titles of executor and administrator.

The personal representative’s primary job is to wind up the affairs of the decedent. It is a short-term job that entails locating and valuing assets, paying claims, taxes, and expenses; and making distributions to the beneficiaries. The role is quite different from the ongoing management role of a trustee.

So you live in Michigan and have finally decided to create an estate plan and it is time to choose a fiduciary – but what does that really mean?

A fiduciary is an individual that stands in a special relation of trust, confidence, or responsibility in certain obligations to the testator. Michigan law creates several different types of fiduciary positions for estate planning.

Fiduciaries, such as a personal representative and trustee, owe obligations of prudence, reasonableness, and loyalty to the person for whom he or she acts.

Unlike conventional estate planning documents that deal with transfer of property to beneficiaries upon your death (i.e. last will and testament, or revocable trusts) the durable power of attorney operates during your lifetime and allows you to chose individuals to act on your behalf. At Serafini, Michalowski, Derkacz & associates, P.C., our estate plans generally include durable powers of attorney, as these documents are just as important as wills and trusts.

A power of attorney allows a person (the principal) to authorize another person (the agent) to act in his or her place. In Michigan, a Durable Power of Attorney (DPOA) is defined as a power of attorney by which a principal designates another as the principal’s attorney in fact in writing and the writing contains the words “This power of attorney is not affected by the principals subsequent disability or incapacity, or by the lapse of time” (DPOA Effective upon Execution) or “This power of attorney is effective upon the disability or incapacity of the principal” (DPOA Effective upon Disability).

A Durable Power of Attorney Effective upon Execution allows the agent’s authority to begin immediately after the written DPOA is signed. There are dangers in allowing an agent’s authority to begin immediately, and you should consider whether you trust the agent to have this power when you are not disabled. Although dangers are associated with a power that is immediately effective, there are also advantages. A primary advantage to making the DPOA effective immediately is that it eliminates the need to produce evidence that the agent’s authority has been triggered. A DPOA effective upon execution is generally favorable to married couples, where the benefit of acting anytime outweighs the concern of giving the agent too much power while the individual can make their own decisions.

Estate planning for Michigan residents has become more user friendly over the past few years with the introduction of the Michigan trust Code (MTC) in 2010 and the Estates and Protected Individuals Code (EPIC) in 2000 it is clear that individuals have more power in preparing their own estate planning documents. Despite the more user friendly law, one thing remains clear-in order for changes to be effective they most clearly state the trust maker or testator’s intent.

Many individuals think that once they have created an estate plan, they are protected for their lifetime. Unfortunately, that is incorrect. Estate plans need to be updated every three years, or after any major life event or death. Whether to update an entire estate plan, or simply execute a codicil, depends on the circumstances.

A codicil is an amendment that may change a provision in, or add new material to, an existing will. A codicil must meet the same statutory requirements that apply to will executions (i.e. signed by the testator, witnessed by two individuals, etc.) Otherwise, no specific form is required. However, because the codicil is only an amendment to the will, certain problems arise in terms of integration. The codicil must be read and interpreted in the context of the entire estate plan, so it must be consistent; otherwise, it will cause confusion and ambiguity, and may defeat the testator’s wishes. A codicil should identify the will being amended by date of execution. Each amendment should be long enough to be read coherently on its own. For example, rather than changing one sentence, it is best to re-write the entire paragraph.

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