Michigan Family Law: How to Modify an Existing Custody Order

   In cases where a previous custody order has been established, whether because of divorce or even if the parents of a child were never married, several criteria must be met before a court will modify that existing custody order.
 
   The first requirement is to prove that proper cause exists, or that a change in circumstances has occurred that would make a custody modification appropriate.  If one of those two criteria is met, the court will then determine whether either or both parents has an established custodial environment with the child; this determination will allow the court to decide the burden of proof that must be met to change custody.  Once the burden of proof has been established, it will be applied to the Child Custody Act Best Interests of the Child factors.  This analysis is outlined below.

Is there proper cause or a change in circumstances to justify a child custody change?

   
   The burden of proof necessary to prove proper cause or a change in circumstances is "preponderance of the evidence."  This is the lowest legal standard, and it means that the petitioner - the person asking for a custody change - has to merely prove that it is more likely than not that one of these two criteria can be met.
 
   1) Proper Cause - In order to prove proper cause, the petitioner must prove - by a preponderance of the evidence - that one or more appropriate grounds exist that could have or have had a significant effect on the child's life.  Although Michigan law does not establish a rule for what constitutes proper cause, the courts will look at the Child Custody Act Best Interests of the Child factors, which are outlined below.  Each of these factors relates to the parents' ability to provide appropriate love, guidance, and discipline to the child.

   2) Change in Circumstances - In order to prove a change in circumstances, the petitioner must prove - again by a preponderance of the evidence - that, since the entry of the current custody order, conditions surrounding the child, which could have an effect on the child, have materially changed.  It's important to note that the court will only look at events that have happened since the existing custody order was entered - the court will not look at events that happened prior to that order.  These events must also be more than normal life changes that every child experiences.  For example, a child becoming more involved in extra curricular activities as he enters high school would be considered a normal life change, not a change in circumstances that would warrant a custody change.

   If at least one of the two criteria outlined above is met, the court will then determine whether either or both parents has an established custodial environment with the child.

Does either parent, or do both parents, have an established custodial environment with the child?

   A parent, or both parents, has an established custodial environment with the child if, over an appreciable amount of time, the child looks to the parent in that environment for love, guidance, and support.  In making this determination, the court will consider the age of the child and the physical environment.  Although the size and condition of the home may be a factor, it will not be the only factor considered.

   The burden the petitioner has to meet to change custody is based on whether or not the other parent has an established custodial environment with the child.  For example, if Dad files a motion to change custody, and the court determines that Mom has en established custodial environment with the child, then Dad has to prove by clear and convincing evidence that a change is in the best interests of the child.  Clear and Convincing Evidence is the highest legal standard, and requires the petitioner to prove his case almost to a complete certainty.  If Mom does not have an established custodial environment with the child, then Dad has to prove his case by a preponderance of the evidence, which was discussed above.

Is a child custody change in the best interests of the child?

   The Child Custody Act established 12 factors the court will look at when determining if a change in custody is in the best interests of the child.  Based on the Established Custodial Environment analysis above, these factors will have to be proved by either a preponderance of the evidence, or by clear and convincing evidence.  The court does not have to make a conclusion as to which parent each factor favors, but the court must at least make an assessment of the applicability of each factor.

The 12 Best Interests of the Child factors are:
1)  The love, affection, and emotional ties between the parties involved and the child.
2)  The capacity of the parties to give the child love, affection, and guidance; to support the child's education and to raise the child in his or her religion.
3)  The ability of the parties to provide food, clothing, medical care, etc.
4)  The length of time the child has lived in a stable, satisfactory environment.
5)  The permanence, as a family unit, of the existing or proposed custodial home.
6)  The moral fitness of the parties involved.
7)  The home, school, and community record of the child.
8)  The mental and physical health of the parties involved.
9)  The reasonable preference of the child, if the court considers the child to be of sufficient age to express preference.
10) The willingness of each parent to encourage a relationship between the child and the other parent.
11) Domestic violence.
12) Any other relevant factor.

Conclusion

   The first step in deciding if a child custody change is appropriate is to determine if proper cause exists, or if there is a change in circumstances that would support making such a change.  The legal standard to evaluate this first step is preponderance of the evidence.  If the court determines that there is proper cause or a change in circumstances, the second step is to determine if either or both parents has an established custodial environment with the child.  The answer to that second question will determine whether the Child Custody Act Best Interests of the Child factors are evaluated based on clear and convincing evidence or preponderance of the evidence.  Once that determination is made, the court will apply the appropriate standard to each of the Best Interests factors to decide whether or not to grant a child custody change.

To learn more about this topic, or to schedule an appointment, please visit my website at http://www.toburenlaw.com/


 

 

 


  

   

Estate Planning Basics: Estate Planning for Blended Families

   In a previous post, I discussed the top three reasons you may need a will or trust to protect you, your assets, and your family (See:  http://www.toburenlaw.blogspot.com/2013/08/estate-planning-basics-top-3-reasons.html).  One of those top three reasons is because you want to decide, instead of allowing a court to decide, how to distribute your assets upon your death.  This topic is especially important, and challenging, for a blended family, which is a family in which one or both parents has children from a previous relationship.

   Perhaps the best way to illustrate the estate planning challenge for blended families is with an example. Let's say that Bob and Jill were recently married.  Bob has two adult children from a previous marriage, and Jill has one adult child from a previous marriage.  Bob and Jill live in a house that Bob owns.  Because they were both married previously, all of their other assets - bank accounts, investment accounts, vehicles, etc. - are also owned individually.

   When Bob and Jill decide to create their estate plan, they agree that their primary goal is to provide for the surviving spouse for the remainder of his or her life, with the remainder of Bob's assets, including the house, passing to his children, and the remainder of Jill's assets passing to her child.  In other words, if Bob dies first, he wants Jill to have use of his house for the rest of her life.  Upon Jill's death, Bob wants the house sold and the proceeds split between his own children.

   Under this scenario, Bob and Jill cannot accomplish their goals with a will.  If Bob left the house and his other assets to Jill through his will, Jill would become the sole owner of those assets upon Bob's death.  At that time, she would no longer have any obligation to leave Bob's assets to Bob's children upon her own death.  If she chose, for whatever reason, not to follow Bob's wishes, she could create a new will, leaving everything to her own children.  Under this scenario, Bob's children would inherit nothing from their father.  

   Even without factoring in the house, it would be extremely difficult for Bob and Jill to accomplish their goals with a will.  Let's assume that Bob's other assets (not including the house) have a value of $500,000, made up of a checking account, a savings account, a retirement account, and mutual funds.  Bob would still like to provide for Jill for the remainder of her life if Bob was to die first.  Upon Jill's death, he again wants the remainder of his assets to pass to his own children.

   Similar to the scenario above with the house, if Bob left his other assets to Jill, she would inherit those assets outright, and she would be able to change her own will so that Bob's children would inherit nothing from her.  Although a will can be written in a number of different ways, there is just not a good option when planning for blended families.  Let's say Bob creates a will that says, "Upon my death, I leave half my estate to my wife, with the other half being divided among my children." What if, due to a drop in the stock market, at the time of Bob's death, the estate is only worth $300,000, instead of $500,000?  Now, Jill may not inherit as much as Bob thought she would, and she may not have enough money to live comfortably for the remainder of her life.

   Let's change the scenario above and say that Bob writes his will as follows:  "Upon my death, I leave my wife $400,000, with the remainder divided evenly between my two children."  Here, Bob plans to leave his wife $400,000, and each of his two kids $50,000.  But, if Bob lives several more years, and at the time of his death, the estate is worth $1.2 million, Jill would still inherit $400,000, but each of Bob's children would inherit $400,000.  Again, Bob's true intentions have not been carried out.

   Since a will is not the best option for Bob and Jill (and their blended family) to accomplish their estate planning goals, Bob and Jill should each create a revocable living trust (RLT).  A RLT will allow Bob and Jill to provide for the surviving spouse while also passing the remainder to each spouse's own children.  Going back to the original example where Bob owns the house, Bob could set up a trust that would allow Jill to remain in the house for the remainder of her life.  In this scenario, the trust would own the house, and when Jill eventually dies, the trust could sell the house and split the proceeds between Bob's children.  Since Jill would not become the owner of the house upon Bob's death, she also could not use her own will to pass the house to her children.

   Similarly, Bob's other assets, which currently total $500,000, could be put into a trust and could be used for Jill's benefit for the remainder of her life, with the remainder passing to Bob's children upon her death.  To ensure that the money was spent properly, a trustee would oversee how the money is spent.  The trust could also have specific provisions that outline how the money could be spent.    

   Blended families are becoming more common, and they prevent unique estate planning challenges.  To learn more about this topic, or to schedule an appointment to discuss your estate planning goals, please visit my website at  www.toburenlaw.com.

Michigan Family Law: Grandparenting Time

Can Grandparents successfully petition a court to enforce visitation rights with their grandchildren?

  

   Prior to 2003, in Michigan, grandparents could successfully seek an order for grandparenting time with their grandchildren if they could prove it was in the best interests of their grandchildren to spend time with their grandparents.  Per that statute, if a child custody dispute between the parents was pending before a court, the grandparents could file a petition and be awarded visitation with their grandchildren, even if the parents objected.   

   In 2003, the Michigan Supreme Court ruled that the existing Michigan law was unconstitutional because it did not give deference to the preference of fit parents.  In other words, the existing law did not presume that fit parents would make the best decision for their own children.  The Michigan Supreme Court decision was in line with an earlier United States Supreme Court decision that overturned a similar Washington law on the grounds that fit parents have a Constitutional right to raise their children in accordance with the law, and without interference by the government, or by others.

   Following the invalidation of the existing law, Michigan passed a new law in 2005 that established specific criteria that had to be met before grandparents could be awarded grandparenting time. The new law, MCL 722.27b(1), established six circumstances under which grandparenting time may be awarded:

1) an action for divorce, separate maintenance, or annulment involving the child's parents is pending before the court;

2) the child's parents are divorced, separated under a judgment of separate maintenance, or have had their marriage annulled;

3) the child's parent who is a child of the grandparents is deceased;

4) the child's parents have never been married, they are not residing in the same household, and paternity has been established;

5) legal custody of the child has been given to a person other than the child's parent or the child is placed outside of and does not reside in the home of a parent; or

6) in the year preceding the commencement of the action for grandparenting time, the grandparent provided an established custodial environment for the child, whether or not the grandparent had custody under a court order.

   The other key component of the statute, and maybe the key component, is that the statute creates a presumption that a fit parent's decision to deny grandparenting time does not create a substantial risk of harm to the grandchildren.  Whereas the old statute, as mentioned above, only required proof that grandparenting time would be in the best interests of the children, the new statute requires grandparents to prove that denying grandparenting time would negatively impact the grandchildren's mental, physical, or emotional well-being. The new 2005 statute also forbids grandparents from filing more than once every two years.  

   This new statute has been upheld as constitutional by the Michigan Court of Appeals on the grounds that grandparents do not have a fundamental constitutional right to a relationship with their grandchildren, and that grandchildren likewise do not have a fundamental constitutional right to a relationship with their grandparents. As mentioned above, the new Michigan statute gives great deference to fit parents' right to choose how to raise their own children; part of that right is to choose who their own children do, or do not, have a relationship with.  

  The practical effect of this new statute, and the Michigan Court of Appeals determination that the statute is constitutional, is that grandparenting time is almost never awarded in Michigan.  Although the new 2005 statute provides six circumstances in which grandparenting time may be awarded, judges in Michigan usually honor the right of parents to make that decision for their own children.  

To learn more about this topic, please visit my website at www.toburenlaw.com.

Michigan Family Law: Post-Divorce Parenting Time Modifications

I was divorced three years ago - and circumstances have now changed - can I change the amount of parenting I have with my minor children?

 
   The short answer to this question is yes, Michigan law does allow a parent to modify an existing parenting time order under certain circumstances.  Before I explain the process and the circumstances under which a parenting time order can be modified, here's a brief explanation of child custody:

CUSTODY

   As part of a final divorce settlement or judgment, two child custody determinations must be made.  The first is legal custody, which is a determination as to which parent has decision-making authority on important decisions affecting the minor children's welfare.  Decisions that fall under the legal custody umbrella include whether the child should have surgery or another medical procedure; which religion, if any, the child should be raised in; whether the child should attend private or public school.  Legal custody can be joint, meaning the parents share this decision-making authority, or it can reside solely with one parent.  Legal custody will be joint, or shared 50/50 by both parents, unless one parent is deemed unfit.

   The second child custody category is physical custody, which is a determination as to where the child resides.  Physical custody can also be joint, meaning that the children stay the same number of nights at each parent's house; or one parent can have sole physical custody, in which case a parenting time order is often entered, giving the non-custodial parent a certain number of overnights with the minor children.  If physical custody is joint, parents usually have overnights with the children on a week on - week off basis; if one parent has sole physical custody, and the other parent is awarded parenting time, how that parenting time is determined will be based on a number of factors, including:  where each parent lives; suitability of the non-custodial parent to properly care for the children; children's preference if old enough to have a say.   

PARENTING TIME

   As mentioned above, if one parent has sole physical custody, the non-custodial parent will often have parenting time, which usually includes a certain number of overnights - often on weekends, holidays, and school breaks - and may also include mid-week visits.  

   Modification of an existing parenting time order may be requested by either party, or by the Friend of the Court (FOC) if the FOC had previously been involved in the case.  The FOC is usually involved if there are concerns about one parent's ability to safely and effectively parent the children.

   If parenting time is disputed, the court will evaluate some or all of the Best Interests of the Child Factors. Although not listed here, these factors are related to the parent's ability to provide guidance, love, discipline, and support to the children.  There are also nine factors specific to parenting time that the court may consider:

1) the existence of any special circumstances or needs of the children.

2) whether the child is a nursing child less than six months old, or less than one year if the child receives substantial nutrition through nursing.

3) the reasonable likelihood of abuse or neglect of the child during parenting time.

4) the reasonable likelihood of abuse of a parent (by a child) resulting from the exercise of parenting time.

5) the inconvenience to, and burdensome impact or effect on, the child of traveling for purposes of parenting time.

6) whether a parent can reasonably be expected to exercise parenting time in accordance with the court order.  

7) whether a parent has frequently failed to exercise reasonable parenting time.

8) the threatened or actual detention of the child with the intent to retain or conceal the child from the other parent or from a third person who has legal custody.

9) any other relevant factors.

   If parenting time is disputed, the court will make a decision based on some or all of the above factors.  If parenting time is not disputed, meaning the parties agree to modify the order, the court will grant the request unless it finds good reason not to do so.

   To learn more about this topic, please visit my website at www.toburenlaw.com.

Estate Planning Basics: Understanding the Federal Estate Tax (the "Death Tax")

   The Federal Estate Tax, commonly referred to as the "Death Tax," is one of the most controversial and misunderstood federal taxes.  Although some form of tax assessed upon the death of an individual goes as far back as 1862, the modern version of the Federal Estate Tax was created in 1916.  The term "death tax" was first used in the 1940's, and has been frequently used since then by opponents of the tax.

What is the Federal Estate Tax?
   The Federal Estate Tax is officially defined as a tax on your right to transfer property at your death. To put it another way, it is a tax assessed on the value of your estate at the time of your death.  When calculating the amount of the tax, the first step is to determine the value of the decedent's (the person who died) gross estate.  The gross estate is the fair market value of everything the decedent owned or had an interest in (such as a business) at the time of death.  Certain deductions are then allowed (such as a mortgage or other qualifying debts) to determine the decedent's net estate.  From the net estate, taxable gifts are added back in to reach the taxable estate.*

What is the amount of the tax in 2013?   
   Much of the confusion over the Federal Estate Tax is due to the frequent changes to the tax rate and the amount of the exemption.  To eliminate such changes in the future, on January 1, 2013, Congress passed, and President Obama signed into law, the Taxpayer Relief Act of 2012, which set the Federal Estate Tax exemption at $5,000,000 for a single person who died in 2012, with a tax rate of 40% on estates that exceeded the exemption.  The exemption is indexed for inflation each year, so the exemption for 2013 is $5,250,000.

   As an example, if a single person dies in 2013 with a Taxable Estate of $7,000,000, the first $5,250,000 is not taxed due to the exemption.  So, the amount of the estate subject to the tax is $1,750,000.  Based on a tax rate of 40%, this person's estate will pay Federal Estate Taxes of $700,000 (1,750,000 * .4).

   The other new feature introduced in 2012 is that the exemption for a married couple is twice the exemption for a single person, and the surviving spouse can use the previously deceased spouse's unused exemption.

   As an example, let's assume that Joe and Susan are married.  Joe dies in 2013, and at that time the couple's taxable estate is $4,000,000 (We'll assume for this example that this couple owns everything jointly).  Joe's estate will use $4,000,000 of his possible $5,250,000 exemption, so his estate will not be subject to tax.  Susan now becomes the sole owner of the entire estate.  Several years later, Susan dies at a time her taxable estate is $8,000,000.  For purposes of this example, we'll assume that the exemption is now $6,000,000.  So, at the time Joe died, he had $1,250,000 of unused Federal Estate Tax exemption.  Susan can use that unused exemption, plus her own $6,000,000 exemption, for a total exemption of $7,250,000. Since her taxable estate is $8,000,000, she will pay taxes on $750,000 (8,000,000 - 7,250,000); if the tax rate is still 40%, her estate will pay Federal Estate Taxes of $300,000 (750,000 * .4).

How does this impact me?  Will my estate have to pay the Federal Estate Tax when I die?
   As mentioned above, the estate of a single person who dies in 2013 will only pay the Federal Estate Tax if the estate is worth more than $5,250,000.  The estate of a married couple has a total exemption of $10,500,000 in 2013.  It is estimated that less than one-tenth of one percent of estates will now be subject to the Federal Estate Tax.

My estate most likely won't be subject to the Federal Estate Tax - do I still need a will or trust?
   Although not everyone needs an estate plan, there are several reasons besides tax avoidance to have a will or trust.  Among the top reasons:
1) You have minor children and you want to provide for guardianship of your children in the event you die before your children reach age 18.
2) You own assets, and you want to decide, instead of allowing a court to decide, who will inherit your assets upon your death.
3) You want your estate to avoid the costs of probate administration.
4) You want to hold property in trust for use by future generations.
    

*Please note that determining the Taxable Estate can be very complicated and is beyond the scope of this article.

To learn more about this topic, please visit my website at http://www.toburenlaw.com/my-blog/

Estate Planning Basics - Who is Lady Bird Johnson, and why she is part of an Estate Planning blog?

Estate Planning Basics:  Who is Lady Bird Johnson, and why is she part of an Estate Planning blog?

   Lady Bird Johnson was the wife of former President Lyndon B. Johnson, and was therefore first lady of the United States during President Johnson's time in office.  Vice-President Johnson became President, and therefore Lady Bird Johnson became first lady, on November 22, 1963 after the assassination of President John F. Kennedy.  

   Lady Bird Johnson, who was born Claudia Taylor, received her nickname, a name she never preferred, as a baby when her family's nanny remarked that she was "purty as a lady bird."  The future first lady was born and raised in Texas, and she received two degrees from the University of Texas, along with her teaching certificate.  As such, she was one of the most highly, if not the most highly, educated first ladies.  

   Before her husband became President, he was a United States Representative from 1937 to 1949, a United States Senator from 1949 to 1961, and Vice President to President John F. Kennedy from 1961 to 1963.  Without his wife's support, President Johnson's political career may have never even started, as Mr. Johnson's first Congressional campaign, in 1936, was funded by Lady Bird, who had received a large inheritance from her mother.  

   Mrs. Johnson, Lady Bird, played an active role in her husband's political career.  During World War II, while Congressman Johnson was stationed with the Navy in the Pacific, Lady Bird ran his Congressional office in Washington, D.C.  During her husband's presidency, Lady Bird was instrumental in passage of the Highway Beautification Act of 1965, which was one of our country's first environmental protection laws.  

   After President Johnson decided not to run for reelection in 1968, and at the end of his term in January 1969, he and Lady Bird retired to Texas.  President Johnson died in 1973 of a massive heart attack; Lady Bird remained in Texas until her death in 2007 at the age of 94.

   So, what does Lady Bird Johnson have to do with Estate Planning?  The Lady Bird Deed, an estate planning tool that is quickly becoming increasingly popular, was purportedly named after the former first lady after President Johnson used this type of deed to convey property to his wife at his death.

   Although a deed is a legal instrument that transfers ownership of property from one person to another, a Lady Bird Deed does not actually transfer ownership.  A Lady Bird Deed does two things instead: 

1) A Lady Bird Deed creates a power of appointment in the grantee.  With a power of appointment, the owner of property, the grantor, gives the recipient of the power, the grantee, the authority to dispose of the grantor's property. 

2) A Lady Bird Deed allows the owner of property to name a default beneficiary who will inherit the property if the owner still owns the property at his or her death.  

   To demonstrate how the Lady Bird Deed works, we'll use President and Mrs. Johnson as our example. President Johnson owned several pieces of real estate in Texas, including a ranch.  In this example, President Johnson executed a Lady Bird Deed on his ranch, in which he gave himself a power of appointment.  He also named his wife as the beneficiary of the deed, which meant that Mrs. Johnson would inherit the ranch if Mr. Johnson still owned it at the time of his death.  The end result in this example is that Mr. Johnson remained the owner of the land, retained the right to sell the land, and Mrs. Johnson inherited the land at his death.

There are several benefits to a Lady Bird Deed:

1) Property subject to a Lady Bird Deed avoids probate.  Probate is the process of administering a decedent's will through the court system.  Probate can be expensive and time consuming, which is why the Lady Bird Deed is becoming more prevalent.  

2) Property subject to a Lady Bird Deed is not subject to the gift tax.  As mentioned above, when the Lady Bird Deed is executed, there is no transfer of ownership, so there is no gift subject to federal taxes.

3) A Lady Bird Deed is not considered a divestment for Medicaid purposes.  Although Medicaid is beyond the scope of this post, it should be noted that a Lady Bird Deed can be used to avoid Medicaid divestment penalties.

   In conclusion, a Lady Bird Deed is an estate planning tool that is becoming increasingly popular because of the many benefits it provides.  To learn more, please visit my website at www.toburenlaw.com to schedule an appointment.

       

Estate Planning Basics - Durable Power of Attorney Healthcare - Why College Students Should Have One

Estate Planning Basics:  Durable Power of Attorney-Health Care - Why College Students Should Have One

   Last week, I wrote about two types of Durable Powers of Attorney - for Healthcare decisions and for Financial decisions.  Both of these documents are vital components of a comprehensive estate plan.  With a Durable Power of Attorney-Financial, the creator of the document, the principal, can appoint another person, the agent, to control the principal's financial affairs if the principal is unable to do so.  Likewise, with a Durable Power of Attorney-Healthcare, the principal can appoint an agent to make healthcare decisions for the principal if the principal is determined to be mentally incompetent.  

   And while both of these documents are important estate planning tools, there are other practical uses for a Durable Power of Attorney-Healthcare.  If you have a child in college, you should encourage him or her to create a Durable Power of Attorney-Healthcare giving one or both parents, or another agent, the authority to make important healthcare decisions in the unlikely event he or she is unable.  This is necessary for one simple reason - you, as a parent, lose the legal rights to your children's medical information, and the legal rights to make healthcare decisions for your children, once they reach age 18.  

   In regards to college-aged children, parents often don't consider whether they have the authority to control their children's medical treatment - they either assume they retain these rights as long as their children are still dependents, or they don't think about it at all because it is so unlikely to be necessary.  But, in the unlikely event your child is injured or becomes ill and is unable to make his or her own medical-treatment decisions, you as a parent do not have the legal right to access that child's medical records or to make those treatment decisions unless your child signed a Durable Power of Attorney-Healthcare.  

   In conclusion, if you have a child in college who is over the age of 18, and you want to retain the ability to make that child's medical decisions in the unlikely event he or she is unable, you should consider having your child sign a Durable Power of Attorney-Healthcare.  

   To learn more about this topic, or to schedule an appointment with Attorney Mike Toburen, please go to:
http://www.toburenlaw.com/my-blog/

Estate Planning Basics - Who will make your Financial and Healthcare Decisions if you can't?

Estate Planning Basics:  Who will make your Financial and Healthcare Decisions if you can't?

   When people think of estate planning, they often think of wills and trusts; more generally, they think about what will happen when they die - who will be appointed guardian for their minor children, and who will inherit their assets. Although it is certainly true that these are important decisions that have to be made, a comprehensive estate plan will also include a Durable Power of Attorney-Healthcare and a Durable Power of Attorney-Financial.

   In general, a power of attorney allows one person (the principal) to appoint another (the agent) to act on his or her behalf.  A "durable" power of attorney is effective even after the principal is declared mentally incompetent, unlike a "non-durable" power of attorney, which is effective until the principal is declared mentally incompetent.  In fact, for estate planning purposes, providing for one's care upon declaration of mental incompetence is the primary reason a durable power of attorney is used.  There are many different types of powers of attorney - this article will focus on two:  the Durable Power of Attorney-Healthcare and the Durable Power of Attorney-Financial.

   A Durable Power of Attorney-Healthcare is typically written so that it becomes effective if and when the principal is declared mentally incompetent, typically due to illness or injury.  The purpose of this document is for the principal to choose an agent to make medical decisions for himself or herself in the event the principal is no longer able to do so.  

   The agent will be given as much or as little authority to make decisions regarding the principal's medical treatment as is specified in the document.  This decision-making authority may also include the ability to refuse or terminate the principal's medical treatment.  A Durable Power of Attorney-Healthcare is not limited in duration by law; however, the principal can limit the duration when the document is created. If no duration is specified in the document, it becomes ineffective if and when the principal is later declared mentally competent, or upon the principal's death.      

   A Durable Power of Attorney-Financial is also usually written so that it becomes effective if and when the principal is declared mentally incompetent.  A Durable Power of Attorney-Financial is used to give an agent the authority to make financial decisions for a mentally incompetent principal.  The agent is typically given the authority to access bank and investment accounts for the purpose of paying bills and handling other day-to-day financial transactions.  The agent may also be given the authority to buy and sell property on behalf of the principal.  

   A well-written document will specify in detail the precise amount of authority that should be given to the agent.  And similar to a Durable Power of Attorney-Healthcare, a Durable Power of Attorney-Financial is not limited in duration by law.  If no duration is specified in the document, it becomes ineffective if and when the principal is later declared mentally competent, or upon the principal's death.  

   In conclusion, a comprehensive estate plan should include two documents that are meant to protect a person during his or her lifetime - a Durable Power of Attorney-Healthcare and a Durable Power of Attorney-Financial.  

   To learn more about this topic, or to schedule an appointment with Attorney Mike Toburen, please visit 

http://www.toburenlaw.com/my-blog/

   

Estate Planning Basics - How to Choose the Right Guardian for Your Child

Estate Planning Basics:  How to Choose the Right Guardian for Your Child

Choosing the right guardian is a Gift to your child

            

   As difficult as it may be to think about someone else raising your child, choosing a guardian for your child with the same values, morals, religious beliefs, and commitment to education that you have is actually one of the greatest gifts you could ever give to your child.  Although it may be unthinkable now to consider entrusting your child’s care and upbringing to someone else as a “gift,” choosing the right guardian is the best way for you to ensure that your child will grow up to be the person you want him or her to be.

   Many parents often assume that their minor child’s grandparents, or a favorite aunt or uncle, will be able to assume guardianship of that child if both parents were to die.  Unfortunately, this is not guaranteed to happen unless you have a will or trust in place that appoints a guardian.  Without a will or trust, this decision will be left up to the courts.  And while it is possible that a court may ultimately appoint the person you would have chosen as guardian, the only way to be absolutely certain this will happen, and the only way to avoid a possibly lengthy court battle, is to have a valid will or trust with a guardianship provision.

I know I need to choose a guardian – but how do I choose the right guardian for my child?

            

   The following is a list of factors you may want to consider when choosing a guardian for your child.  My advice to my clients is to use some or all of these factors, rank them in order of importance to you, and then choose a guardian (and a backup guardian) that most closely matches the factors you think are most important.    

Factors to consider when choosing a guardian for your child:

         Values and Morals:  Does the potential guardian have the same sense of right and wrong that you do, and will that person be able to teach your child the values you believe in? 

          Parenting style:  How does the potential guardian handle discipline?  Will the guardian be “hands on” and play an active role in your child’s day-to-day life?  Will the guardian support your child’s extracurricular interests (sports, music, other after school activities)?

          Religion:  Does the potential guardian share your religious beliefs, and if not, will that person at least support your child’s religious education and upbringing in the same way that you would have?

          Education:  Will the potential guardian be committed to supporting your child’s education?  Does the potential guardian believe that education – including a college education – is important?

          Financial stability:  Does the potential guardian have the resources to take on the added responsibility of raising your child?  Does the guardian have a stable job and a secure income?  Is the guardian in a one-income – or two-income household?

          Your child’s relationship with the potential guardian:  Your child may feel more secure if the guardian is someone he/she has a relationship with already.  Family members and close friends are often chosen for this reason. 

          The impact of moving to a new city:  Just as choosing a guardian that your child is already comfortable with may be beneficial to your child, you may also want to consider the impact on your child of having to move to a new city.  This factor will probably be more significant the older and more established your child is.  Your child may benefit by remaining in the same city so he/she can maintain friendships and stay involved in extracurricular activities.  

          Health and age of the guardian:  You will want to make sure that your potential guardian is healthy enough to raise your child.  Age is also a factor you should consider, especially if you have young children.  This factor is often a concern if grandparents are considered as potential guardians.

Congratulations!  – You have chosen a guardian for your child – Next Steps

            
   Now that you have chosen a guardian for your child, you need to talk to the person you have chosen to make sure he/she is willing and able to assume that responsibility.  For a number of reasons, some people are not willing to take on that responsibility, as unlikely as it is that they will ever have to actually assume the role of guardian.  You should also choose a backup guardian, just in case your first choice becomes unable or unwilling to handle that responsibility later on down the road.      

            
   Now that you have chosen a guardian and a backup guardian for your child, you need a valid will or trust to implement your decision.  To learn more, please go to:   http://www.toburenlaw.com/

Estate Planning Basics - Top 3 Reasons You May Need a Will

Estate Planning Basics:  Top 3 Reasons You May Need a Will

   When I meet with a potential new Estate Planning client, one of the first questions I always hear is, "Do I really need a will?"  That question is usually followed by comments such as, "I don't have tons of money," or "If I die, my spouse will just get everything," or "If my spouse and I both die, my parents will raise our kids."

   I also frequently talk to parents who just can't imagine someone else raising their minor children if the unthinkable happens and both parents die.  And while it may be true that your spouse will inherit all of your assets upon your death, or that the person you want to raise your minor children will be appointed guardian, the only way to make absolutely certain that these things happen is to have a will or trust.  

   With that being said, the following are the top 3 reasons you may need a will to protect yourself and your family:

1.  You have minor children, and you want to choose their guardian(s) in the event that both parents pass.

   The only way to be absolutely certain that the person(s) you want to be guardian of your minor children in the event that both parents pass is to have a valid will in place.  Under Michigan law, if both parents pass and a will has not been executed, a judge will decide who becomes the guardian of your children.  Michigan law does not have a provision that appoints the grandparents, or an aunt or uncle, as guardian in the absence of a will.

   In the event that both parents pass without a will, and the entire family agrees on the appointment of a guardian, a judge will usually follow that recommendation.  But is it fair to place your extended family in a position where they have to make that decision?  And what if they don't agree?  Then the only resolution is to go to court and let a judge decide.  

   In summary, in the event of your untimely passing, the only way to guarantee appointment of the guardian you want for your minor children is to have a will.    

2.  You want to decide - instead of allowing a judge to decide - how to distribute your assets upon your death. 

   Just as with the appointment of a guardian for your minor children, the only way to guarantee that your assets are distributed as you desire is to have a will.  If you don't have a will at the time of your death, your assets will be distributed according to the laws of intestacy.  (Intestacy is the legal term used to indicate that the deceased did not have a will).  Under the laws of intestacy, your surviving spouse has the first claim to your assets.  Depending on whether any money is left over after your spouse receives his/her share, your children will have a claim, and then your parents and siblings will have a claim if money is still available.  If you want to make these decisions instead of allowing your assets to be distributed according to a formula, you need to have a will.  

   In summary, you need to have a will if you want to decide who will receive your assets upon your death. Under the laws of intestacy, your surviving descendants will receive your assets upon your death, which leads us to reason #3 you may need a will.

3.  You want to distribute a portion of your assets to someone not in your family.

   As mentioned above in #2, if you don't have a will, your assets will be distributed according to the laws of intestacy.  Under Michigan's intestacy provisions, the only people that will receive your assets upon your death are members of your family (your surviving descendants).  If, at the time of your death, you have no surviving descendants, the state will inherit your assets.  Your boyfriend, girlfriend, or partner, even if sharing your household at the time of your death, is not considered to be a part of your family and will not receive any of your assets if you do not have a will.  If you want someone outside of your family to receive all or a portion of your assets, you must have a will.

   In summary, the best and only way to make sure that your wishes are carried out upon your death is to have a validly executed will.  

   To learn more about this topic, or to schedule an appointment with Attorney Mike Toburen, please go to:  http://www.toburenlaw.com/