– Do you know about Funeral Representatives in Michigan?

If you haven’t heard, new legislation took effect in June last year regarding funeral arrangements. Any legally competent individual may appoint a funeral representative to make decisions about what happens to that individual’s remains after he or she dies.  The funeral representative has the authority to make decisions about funeral arrangements as well as the handling and disposition of the decedent’s body. This means that the funeral representative has the power to make decisions regarding things like cremation and the decedent’s ultimate resting place.

The legislation may be particularly helpful for longtime life partners or unmarried couples, blended families, individuals with long-distance families, or any individuals who wish to bypass the order of priority provided by Michigan law.

Absent a properly appointed funeral representative, Michigan law controls who has the authority to make these types of decisions after a person’s death. The law vests that authority with the next of kin (usually spouses, children, or other immediate relatives). Sometimes that isn’t a problem. Maybe that means a spouse or a child would have the authority to make those decisions for you, and that’s the order you would prefer.  Other times the order created by the law causes a problem. For example, an elderly widow passes away. At the time of her death she had been estranged from her only child for some time. Years ago, the woman met with a local funeral home and preplanned all of her funeral arrangements based on her specific wishes. When she passed away her estranged child, being her next of kin, ultimately had authority over all of the funeral decisions. That included the power to change arrangements previously put in place by the woman.  And, unfortunately, the child did just that. Here, it would’ve been very helpful for the woman to appoint someone other than her child. It could’ve been a trusted friend or a different family member that the woman knew would do everything possible to follow the woman’s wishes.

It’s important to recognize that the new law lets you designate who will make decisions about your remains. A gap in the law still remains in that your funeral representative isn’t required to follow your wishes.  So if you have certain funeral and burial wishes it’s imperative to nominate an individual whom you trust will carry out your wishes.

A nominated funeral representative isn’t obligated to accept their appointment. A prudent planner might nominate several individuals in a row in case a nominee is unwilling or unable to serve. Before being allowed to act, a funeral representative must sign an acknowledgment of their duties. One of the responsibilities is to ensure payment for funeral and burial costs or otherwise be liable for such costs. When designating a funeral representative, it may also be important for you to consider how your final expenses will be paid.

Lastly, the law identifies people who are not able to serve as a funeral representative. That list includes: a licensed health professional, an employee or volunteer of a health or veteran’s facility that provided care during a person’s final illness, and an officer or employee of a funeral establishment, cemetery or crematory that will ultimately provide final services. If, however, one of the above-named individuals is also your spouse or close relative an exception is made.

Properly designating a funeral representative may be an important piece of your estate plan that you currently don’t have. If you have questions or believe it is right for you, please do not hesitate to contact our office.

– Does My Will Override a Beneficiary Designation?

Episode Video

Episode Podcast

Tom explains why if there is a conflict between a beneficiary designation on your bank account (naming one child) and what you say in your Will (divide your estate between all 5 children), the beneficiary designation wins, and your bank account goes to the one child, not to all 5. This also applies to other assets such as life insurance, annuities, retirement accounts and jointly owned real estate.

– Proposed Changes To Federal Gift And Estate Taxes Just Released

Under today’s just released tax proposal from the House of Representatives, the basic Federal Estate Tax exclusion amount is doubled from $5 million (as of 2011) to $10 million, which is indexed for inflation. This provision would apply to tax years beginning after 2017. Furthermore, beginning after 2023, the estate and generation-skipping taxes are repealed while maintaining a beneficiary’s stepped-up basis in estate property. The gift tax is lowered to a top rate of 35 percent and retains a basic exclusion amount of $10 million and an annual exclusion of $14,000 (as of 2017), also indexed for inflation.

– Protect Yourself From Popular Real Estate Scams

Last week four people were charged for running a real estate scam in Detroit. Victims believed they were purchasing vacant properties in the area at bargain prices. After victims sent payment they would receive false or forged deeds to a property. The false deeds were illegally filed with the Wayne County Register of Deeds. Victims later found out that the transactions were done without the legal property owner’s knowledge. Early numbers suggest that it happened to over 20 victims involving 19 different properties. Surprisingly, this isn’t the first scam involving real property that we’ve seen in Michigan over the last several years. Sadly, it probably won’t be the last. But there are a few things that property owners can do to help avoid these traps.

In past years, scammers have also mailed or phoned potential victims offering to retrieve important property records for a fee. The fees charged were anywhere from $50 and up. However, the Register of Deeds office will provide property owners copies of documents for a nominal fee. For example, most counties only charge $1-2 for a copy of a deed.

In light of these scams, many Michigan counties are making changes. Some counties now offer an alert system for real estate to help fight against property fraud. It’s designed to alert property owners of any filings or recordings under their name or their business’s name. So if a property owner signs up to receive alerts they will be notified, with a brief description, any time the county records a transaction connected to their name. Most alert systems are offered at little or no charge. Property or business owners should check with the Register of Deeds office in their county to learn more or register for alerts.

Property and mortgage fraud are two of the fastest growing crimes according to the FBI. There are some general tips that property owners can follow to help avoid property scams. Beware of someone asking you to pay large sums of money up-front for their services before you have any written documentation. Sometimes scammers will insist that you wire money up-front. They may even go as far as asking that the money be sent abroad because they are out of the country. It’s also important to visit the property in person. Often times you can also cross check a real estate listing at different websites if a property is actually for sale.

If you’re asked to sign documents that you don’t fully understand seek out an attorney or real estate professional who’s independent from the transaction. Consider using a professional to represent you. Buyers should also consider requiring title insurance or hiring a title company to perform a title search on a potential property. A title search should identify the legal owner and can reveal any liens attached to the real estate. Spending the money on title work could far outweigh losing thousands of dollars purchasing a property without ever gaining legal title. Most importantly, do your due diligence, and if you have questions don’t let them go unanswered.

by: Amanda Bevel

– Changes to HUD Reverse Mortgage Program

A number of changes to the HECM reverse mortgage program have taken effect today, October 2, 2017, that might impact your ability to obtain a federally insured home equity loan. The changes are in response to a recent actuarial report showing the FHA’s cost of running the program.

▪ The Mortgage Insurance Premium (MIP) that is charged at the time you take out the mortgage is now a flat 2% regardless of the amount borrowed. The MIP rate was based upon the amount that was borrowed relative to the value of your home.
▪ The ongoing annual MIP rate has been reduced from 1.25% of the outstanding loan balance to 0.5%.
▪ The total amount that you can borrow will likely be reduced because of changes in the interest rate floor from 5% to 3%. Because of this change, the average borrower, at current interest rates, will be able to borrow approximately 58% of the value of their home, down from a previous 64%.

– The Many Roads To A Professionally Prepared Personalized Estate Plan

Episode Video

Episode Podcast

In today’s episode, Tom discusses the various ways that he and Amanda can help you with your estate plan wherever you happen to be in Michigan. From personal consultations in Lansing or Grand Rapids, or consultation with us by telephone, to working with a financial professional who is authorized to utilize our Express Estate Planning Service.