As a Michigan estate planning lawyer, I like to stay up on top of what other people are saying about Michigan estate planning.  I stumbled upon a blog that discussed estate planning options in Michigan.

The estate planning blog discussed how each estate plan is unique for the person and family it is created for.  The blog then goes on to talk about three methods on how property is distributed to heirs.

Well, in actuallity, there are four ways that assets are passed out of a deceased person’s name.

The first way is through joint ownership.  Most married couples hold most of their property jointly, so that if one person passes away, the asset passes directly to the survivor.

The second way that assets passes out of a deceased person’s name would be beneficiary designation.  For example, you name a beneficiary of your life insurance policy.

The third way, and the way most of our clients pass their property is through a trust based estate plan.  Through a trust based estate plan a settlor can control the distirbution of their estate, plan for Federal Estate Taxes, and avoid probate.

Which brings us to the last way that an asset passes out of a decedant’s name and that would be through the Michigan probate process.

So, which is the right process for you or your family?

The Definitive Guide to Michigan Estate Recovery has been udpated on June 27th, 2011.  I’ve tried hard to pull my research into one comprehensive guide on Michigan Medicaid estate recovery that cuts out all the legalese and provides answers to commonly asked non-lawyer questions.

Download the Definitive Guide to Michigan Medicaid Estate Recovery.

Our firm is happy to present on this new development in Michigan Medicaid planning.  Especially if your group services seniors, such as geriactric care managers, assisted living facilities, senior independant living, or you are part of a nursing home.

Michigan enacted estate recovery on September 30, 2007, making Michigan the last state in the nation to comply with an over 14 year, at the time, federal mandate.  Estate recovery in Michigan is found in MCL 400.112g and federally 42 U.S.C. 1396p.  State law in Michigan states that the Michigan Department of Community Health will attempt to recoup from the estates of nursing home Medicaid funded long-term care recpients some of the costs the state of Michigan incurred in paying for the Medicaid recpieint’s care.

–Definitive Guide to Michigan Estate Recovery–

As a Michigan elder law attorney, I receive proposed changes to the Medicaid policy handbook changes.  Well, two months ago, a change came accross that verified that Michigan was about to start enforcing the estate recovery law as of July 1st.

Michigan’s estate recovery program will affect recipeints of Medicaid funded nursing home or MIChoice services.

Michigan will attempt to recover from a Medicaid recipient’s probate estate, thus any assets passing through probate (generally the only probate asset for a Medicaid recpient is the family home) will face a lien applied by the state of Michigan for any cost of care.

If you would like more information, including ways to protect the family home, download our Definitive Guide to Michigan Estate Recovery, at no cost.

It’s amazing how much bad information I see out there as a Michigan Medicaid planning attorney.  For example, I was sitting at a meeting today and started talking with an indiviual who said he used to work for a certain “estate planning” firm in the Metro-Detroit area.  Well, when I had a chance I decided to pop over to their website to see what was going on with their firm, and after jumping through all the flash animation I finally got to the content.

They pride themselves and their seminars on being “estate planning” experts, so I was intrigued when I saw that they listed “medicaid planning” on their website as a speciality.  As an attorney that focuses entirely on estate planning and Michigan medicaid planning I was curious to see what informaiton they provided.

Well, according to them, there is a 36 month look back period on any divestments.  Well, this information is blatantly wrong and does a disservice to people searching for Michigan medicaid planning information in Michigan on the internet.  Obviously, with the implementation of the DRA back in 2007 (yes, the information they have is 4 years out of date), the new divestment penalty period is 60 months.

Michigan Medicaid estate recovery has been on the books since 2007 with Public Act 74, which was effective on September 30, 2007.  Up until this point, Michigan has not administered the program.

As a Michigan elder attorney, I stay up to speed on legislation that effects my clients.

DHS released a recent update to their policy manual that put us Medicaid planning attorneys on notice, that they planned on administreing estate recovery starting July 1st.

Estate recovery stems from the federal government’s requirement that the state shall recover money that it paid for services from the services from the estates of Medicaid beneficiaries who have died.  The state will only recover the amount Medicaid paid for a beneficiary.

An estate includes all property and assets that pass through probate cout.

Now more than ever it is important to talk to an elder law attorney who is familiar with Michigan estate recovery.

As a Michigan elder law and estate planning lawyer, I draft elder law focused estate plans that encompass transferring assets to your heirs with the least amount of taxes, court costs and legal fees possible, while at the same time protecting those assets from the costs of long-term care. Trusts are often preferred over wills because they are private documents that avoid the cost and duration of a court proceeding, called probate, after death.

To ascertain the best elder law estate plan for a client, there are four major steps.

The first key is to understand the family dynamics. Many questions are asked. How old are you? How is your health? Is this a second marriage? How does everyone in the family get along? Is anyone estranged and, if so, why? Are any of the beneficiaries disabled and on government benefits? Are there any deceased children, and if so, are there any surviving grandchildren? Do you want to transfer assets on death to your children in a lump sum or do you want to exert more control over the distribution of the inheritance? Sometimes clients find these types of questions intrusive, but without such information, an elder law estate plan is not tailored to your life.

The second step is to review any current estate planning documents such as a will, trust, power of attorney, health-care proxy and living will to see if the plan is up to date legally and whether it meets the client’s goals. Again, questions must be asked. Are you a U.S. citizen (this is important to determine estate tax liability)? Are you expecting an inheritance? Do you have long-term care insurance and, if so, what is the daily benefit, among other details of the policy (this helps determine if the coverage is adequate to protect assets from nursing home costs).

The third step is to review the assets, including how they are titled, if any assets are “qualified plans,” such as IRAs and 401(k)’s, who the beneficiaries are, and the value of the assets. If they are IRAs, we tend to look to IRA Trusts to manage the asset.  The asset list reveals if there will be a probate proceeding, if estate taxes will be owed and whether the client may need to think about protecting assets from nursing home costs.

The fourth step is to develop the elder law estate plan. You determine who will make medical decisions for you if you are unable to and who you will appoint to handle legal and financial affairs through a power of attorney if you’re incapacitated. The type of trust is selected, unless a will would suffice. The trustees for a trust are chosen and executors for a will. Much care is given to selecting your agents and how assets are distributed so that as smooth a transition as possible is planned upon death or disability.

Once the plan is in place, a review should be held every year to do a review.  In our Oakland county elder law and estate planning office we have a system set up called the Family Protection Plan. Having a will tucked away in a drawer for 20 years is not an up-to-date plan that will work when needed. An elder law estate plan is a living plan that requires periodic review.

Thanks to Bonnie Kraham and her article.

Our Michigan probate litigation law firm has handled a few probate litigation cases from clients in the Farmington Hills area.  It’s like coming full circle since I grew up in Farmington Hills area.  Specifically, I grew up in on 11 mile near Middlebelt, in Farmington Hills.

Who knew I’d grow up to be a probate lawyer servincing clients in Farmington Hills, Michigan?