How can you be sure you found all of your late loved one’s life insurance and annuities? This problem has long vexed Michigan families. Many life insurance policies are hard to find since they are paid-up, or relate to former employment for which there may be no “paper trail.” Happily, effective in late 2016, the Michigan Department of Insurance and Financial Services (DIFS) implemented the Life Insurance Annuity Search Service (LIAS) program.
Under the common-law rule against self-settled trusts, an individual traditionally could not create a self-settled trust (that is, an irrevocable trust from which he or she could benefit) and protect trust assets from claims of creditors. With the passage of the Qualified Dispositions in Trust Act, Michigan now authorizes the creation of DAPTs to do exactly that. The Act allows a person to create an irrevocable trust, retain an interest in that trust, and keep his her future creditors from getting to the assets of the trust.
Since 1787 dower has provided wives (but not husbands) with a one-third life interest in their husband’s real property. Even after women were allowed to own property in Michigan in the mid-1800s, the state legislature felt that women were still not on equal economic footing with men. Dower remained to prevent a husband from disinheriting his wife by transferring property without his wife’s consent; giving rise to the requirement that a wife must sign all real estate deeds made by her husband even if her name was not on the property.
The VA (Veterans Administration) and Medicaid landscape is ever changing, and always in favor of government. We wrote you last year to advise you of the pending 36-month look-back for VA Aid and Attendance. The new rules would impose a 36-month look back and penalty period for transfers made by individuals applying for Aid and Attendance benefits. The simple solution is to divest excess assets prior to the effective date of the proposed bill.
That is the million dollar question! Proposals have already been floated that would dramatically change the estate and elder law landscape. New laws would eliminate the federal estate tax (currently the exemption is $5.4 Million), turn Medicaid (the program that covers indigent health care and long term nursing home care) over to the states in a capped block-grant arrangement administered by each state. We are also likely to see cost-cutting changes to health care, Medicare and Social Security.