LaBre on Law

Short Stories on Michigan and Indiana Law

Month: April, 2013

What’s in a Will

Last Will And Testament

Last Will And Testament (Photo credit: Ken_Mayer)

I was at an event when a couple came up to me.  “May we joint you for a minute?  We’d like to ask you some questions, and we heard you are an attorney.”

“Certainly.  Please have a seat,” I replied.

“We’re thinking about making an appointment to have a Will made”, they said.

“Good idea”, I replied.

“What we’d like to know”, they continued, “is what we should think about putting in our Wills.”

“Let me ask you some questions first”, I said.

“Do you have any children, and, if so, how old are they?”

“We each have two children by prior marriages”, he said.  “All four are now teenagers.”

“We also have two of our own”, she added proudly, “ages six and two.”

“Second question.  Who’s got custody of the children from your prior marriages?”

“I’ve got custody of my two”, she replied.  “But that witchy ex-wife of his has custody of his two”, she quickly added.

“Third question”, I said.  “Adding up all of your assets, including the amount of money which you’ll receive from life insurance, and the full value of all jointly owned property, how much would you say that it’s all worth?”

“About a million dollars, if you include life insurance and the full value of the house,” they said.

“OK.  Then let’s take care of some preliminary matters before we get into what you should think about in regard to your Will.

“First, you’re not subject to Federal Estate Tax.  Under new law, the Federal

Estate Tax begins at estates worth five million dollars.  That’s not you.

“Secondly, Michigan abolished the Inheritance Tax in 1993.  So, unlike Indiana which still has the Inheritance Tax, you don’t have to worry about that, either.

“If you were worth more than five million, then your Will could be used for estate tax planning to minimize the Estate Tax which begins at 40%, effective January 3, 2013.

“I presume that you want to leave everything to each other.  Is that right?”

“That’s right” they both quickly said.

“But the problem comes with your kids.  You need to know that, if you both die before the kids turn eighteen, then, unless you say differently in your Will, the kids’ parents from your prior marriages will have priority to administer your children’s money as their Conservator.  As for your two kids together, if the older kids reach age eighteen, then adult siblings would have priority as both their Conservator and as their Guardian.”

“We’ll think of something!” she flared.  “There’s no way that “witch” is going to get her hands on any of our money!”

“While you’re thinking about that, you should also consider who you do want to both administer all of the money and to take care of your own two children as their Guardians.

“You should also think about how old the kids should be when they receive their money.

“Under the law, they’re each entitled to their share when they turn eighteen.  You can postpone that for three years, until they turn twenty-one, if you name a “Custodian” under the Uniform Gift to Minors Act.  But, if you want to wait beyond age twenty-one, then you’ll want to consider a testamentary trust in your Will to postpone distribution until the age which you specify.  That trust could also provide payment for your children’s college education, without giving them other access to your money.

“A critical decision in all of these matters are the people whom you will name.   Who will be the Personal Representative of your Estate, who will be the Guardian of your minor children, and who will administer any Trust, or otherwise be responsible for your children’s money, before the distribution to them?

“After all of those decisions, you will need to consider whether you want to give any money to your church or favorite charity, and, if so, how much.  You may also make specific burial instructions, such as where you want to be buried, whether you want to be cremated instead of burial, and which church will perform the funeral services.”

“That’s a lot to think about”, he said.  “We appreciate your time.  When we’ve made up our minds, we’ll call our own lawyer for our Wills.  Bye Bye.”

Order of Priority

Deutsch: logo der tageszeitung the guardian

Deutsch: logo der tageszeitung the guardian (Photo credit: Wikipedia)

“I can’t believe this!” he exclaimed.   “I just got these papers.  My 18 year old niece just filed an action with the court to become my brother’s guardian and conservator.  I’ve been the guardian and conservator for my brother for the past ten years.  Can she do that?”

“Sure,” I said.  “But that doesn’t mean she’ll get it.”

“So, you’re saying that I have nothing to worry about?”

“Not exactly.”

His brother was in a car accident about ten years ago, which rendered him permanently incapable of caring for himself.  Both of their parents had already passed away.  In addition, his brother never made a Will or a durable power of attorney listing a preference for who should become a guardian or conservator.

I read over the petitions.  My client’s niece wrote that she was the “daughter” of the ward.

“Is this young lady in fact the daughter of your brother?”  I asked.

“Yeah, he was married before the accident, but his wife abandoned him, and took the child with her.  His wife passed away a couple years after the accident.”

“Where did the daughter go to live?”

“She went to live with her mother’s parents.”

“Child support?”  I asked.

“I sent a couple hundred dollars to her grandparents every month.”

“Is that based upon a court order?”

“No, I just did it because that’s what my brother would’ve done,”  he said.

“Did the daughter ever come around to visit?”

“No, not once,” he said.  “I don’t even know who she is, really.  All of this is completely out of the blue.”

After interviewing my client further, one of the possible motives for his niece’s sudden desire to become involved with her father wasn’t hard to guess at—they’d won about $500,000 as a result of the lawsuit for negligence that followed the accident.  And due to my client’s investments of that money, that number had grown to over $700,000.

“So, how does this work?” he asked.  “She can’t just come tromping back in and expect to win, can she?”

“Stranger things have happened.  And she’s above you in the order of priority for appointment to be the guardian and conservator.”

“What’s the order of priority?”

“Well, a person’s spouse is first in priority to become another’s guardian or conservator.   Second is the incapacitated individual’s adult child, which is where your niece comes in.  Next in line are the parents of the incapacitated individual, who in this case have already passed.  And fourth on the list is any other relative of the family, which is where you come in.  Your niece is second on the list and you’re forth.”

“But she’s never even seen him,” he said in a tone of disbelief.

“That’s a very good point.  But that’s only one factor to consider in the analysis of determining what’s in your brother’s best interests.  The fact of the matter is that we don’t know why your niece never visited your brother.  Maybe she was prevented from seeing him despite her desires.”

A jaded grin crossed his face, “Come on.  She just wants the money.”

I smiled, as the perpetual, paranoid side of my nature concerning the practice of law kicked in, “That’s only our side of the story.  That perspective alone doesn’t preclude her from asking the court to take over for you.  And once trial hits, even the moon and the stars aren’t out of reach for dreamers.  You just can’t predict with any certainty what’ll happen.”

He exhaled in deep frustration, “Jeez.  So I have to spend all this money all because my brother’s step-daughter wants to grab at the pot of gold.”

Like a Doberman Pinscher, my ears perked up, “Wait a minute, did you just say step-daughter?”

“Yeah.”

“As in, your brother isn’t the father of this young lady.”

“Yeah.”

“As in, someone else is already the father.”

“Yeah.”

“Your brother never adopted her, did he?”

“Not that I know of,” he said.

“I thought you told me she was his daughter?”

“Well, whatever,” he said with a frustrated, I-hate-nitpicky-lawyers and stop-correcting-me look on his face.  “Does it matter?”

“You bet,” I said.  “Step-children aren’t children under the probate code.  If we can prove that she’s not your brother’s daughter, then she’ll be below you in the order of priority, ultimately having the effect of making her odds of success at trial slightly above zero.”

Different States, Different Worlds

English: I-69-Indiana-Michigan

English: I-69-Indiana-Michigan (Photo credit: Wikipedia)

After the meeting we were having a cup of coffee and chatting. One of the guys said to me: “My daughter just got married and she and her new husband now live in Indiana. Is there much of a difference in the laws of the two States?”

“Yes indeed!”, I replied.

“Give me some examples”. At that point, the rest of the group stopped talking and began listening.

“Well”, I said, “let’s start with divorce, since your daughter just got married”.

“You lawyers; who else would think of divorce when some says ‘marriage’? But go ahead. Tell me about some differences in divorce.”

“Sorry about that”, I said. “Going to law school is like having brain surgery. We’re taught to ‘think like a lawyer’. By the time we ‘pop out’, most folks think that we’ve become aliens. But I’ll tell you some differences between Michigan and Indiana.

“In Michigan and Indiana, getting a divorce is based on a ‘no fault’ statute. But, in addition to a divorce from the bonds of matrimony, there are a host of other issues, such as custody, property settlement, alimony, and so forth. That’s where the differences come in.

“In Michigan, division of property can take ‘fault’ into consideration; in Indiana the only ‘fault’ is ‘dissipation of marital assets’. The other spouse could be an adulterous meth manufacturer, but if he or she made money, then division of property does not consider his fault.

“In Michigan the first question in division of property is whether it’s ‘separate property’, namely, obtained prior to marriage, or obtained through gift or inheritance. In Indiana, it’s all in the ‘marital pot’, though a judge may consider whether it was inherited or obtained before marriage.

“In Michigan there’s alimony, now called ‘spousal support’. In Indiana, with very few exceptions, there’s no alimony.

“Do you want more examples?”

“That’s enough on divorce”, he said. “What are some other differences?”

“Well, let’s look at automobile accidents. In Michigan, we have “no fault”, and, unless there’s very serious bodily injury, disfigurement or death, there’s no law suit against the other driver. Our own insurance pays the bills. In Indiana, there is “fault”, and law suits based on auto accidents are therefore much more common.

“If you look at Probate, there’s a completely different procedure of starting the process. In Michigan, there are three ways in which an Estate can be initiated; in Indiana there’s one.

“If you look at criminal law, Michigan gives a Preliminary Examination within fourteen days in felony cases where the State must provide probable cause that a crime was committed, and the Defendant committed it. Only if that’s done, or waived by the Defendant, can the Defendant be ‘bound over’ to stand trial. Practically, this means that a person can’t be held for months without a hearing.

“In Indiana, there’s no Preliminary Examination.

“In Michigan, if you file a law suit, the case can be dismissed unless the Complaint gives facts which contain all of the elements need to prevail. That’s called “fact pleading”.

“In Indiana, if you file a law suit, you only have to state the general nature of the case, not specific facts to support your claim. That’s called ‘notice pleading’.

“Do you want more examples?”

“No”, he said, shaking his head. “I’m already dizzy from hearing about all these differences. Now, all I can ask is whether the States have anything in common?”

“Yes”, I replied, “they do. The judges wear black robes in both States.”