Thursday, October 31, 2013

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.






Wednesday, October 16, 2013

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.

Thursday, October 3, 2013

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/