Last Will and Testament and Probate
by
LAST WILL and TESTAMENT
About the Professor:
Dr. Donald J. Baranski, received his Bachelor of Arts in Humanities Pre Law, from Michigan State University. This was a triple major of American History, Philosophy, and Psychology. He then received a Master of Arts degree in Philosophy from Michigan State University. He then obtained his Juris Doctor from Michigan State University College of Law. Dr. Baranski has been a licensed Attorney and Counselor at Law in the State of Michigan since 1988, practicing probate law including Last Wills & Testaments, Trusts, Powers of Attorney, Guardianships, Conservatorships, and Deceased Estates in Michigan. Dr. Baranski has been teaching since 1989. He has taught at Western Michigan University Cooley Law School, Michigan State University College of Law, Jackson College, and the Eaton Rapids High School.
ABOUT THE PROBATE COURT
What is the Probate Court?
Probate Judges who are elected in non-partisan elections for six-year terms. Almost every county in Michigan has its own probate court.
What types of cases are heard in Probate Court?
The probate court is a special court that deals with only certain types of cases about: (1) estates and trusts; (2) protection of minors and incapacitated adults (called Guardianships and Conservatorships); and (3) commitment of the mentally ill. Depending on the claim and underlying facts, sometimes the Probate Court is the only court that can hear the claim, while other times the Probate Court has the option of ruling on the claim as well as another court (e.g. Circuit Court).
What is probate litigation?
When a legal dispute arises in probate court, is it often referred to as “probate litigation.”
When a person dies, is the Probate Court always involved to transfer assets?
Not always. It depends on what type of assets the person left behind. The probate court’s involvement
is only necessary when the decedent leaves “probate assets,”meaning, property in the decedent’s
name alone.
Can a decision made by the probate court judge be appealed?
Yes. Parties in probate litigation have the right to appeal the decision within 21 days after entry of a final Order. Depending on the type of claim involved, the appeal will be directed to either the Circuit Court for the same county or to the Michigan Court of Appeals.
What is an “interested person”?
This is a term used in Probate Court which means a person who has an interest in the case, and who entitled to participate in the case if desired.
WILLS
What is a Will?
It is a document that directs where the decedent wants his or her probate assets to go. Classic examples of probate assets are personal property like furniture, a vehicle, and real estate held as a “tenant-in-common.”
What are the requirements for a valid Will?
It must be in writing and signed by the decedent in the presence of two witnesses who also sign the Will. If an above requirement is missing, the Will can still be valid if (1) it is dated, signed by the decedent,
and the material portions are in the decedent’s handwriting; (2) or it is proven by clear and convincing evidence that the document or writing was intended to be a Will.
How long is a Will good for?
There is no expiration date for a Will. A Will is valid until it is revoked. However, it is Practices Probate Litigation
What happens if you die without a Will?
If you die without a Will, your probate assets are transferred under Michigan’s default “intestate” laws. Under Michigan’s intestate laws, the assets are distributed to your heirs under a formula that considers whether the decedent was married, had children, had a spouse with children, or had living parents.
Can you cut your spouse and children out of your Will?
Yes. However, whether a person dies with or without a valid Will, the surviving spouse and minor and dependent children of a decedent have certain rights to estate assets which are detailed by Michigan statute.
ESTATE ADMINISTRATION
What is a Personal Representative?
It is the person appointed by the Court who administers the deceased person’s estate. The Personal
Representative is issued “Letters of Authority” by the Court which tells the world that this person has legal authority to manage the decedent’s assets. If the decedent left a Will, it is usually the person nominated in the Will to serve in this role.
What is the Personal Representative’s job?
The Personal Representative legally steps into the shoes of the decedent. The personal representative
needs to “marshal” the assets (collect and protect them), pay expenses (funeral bill, estate administration, medical bills, creditors, taxes, etc.), and then distribute what’s left. If the decedent left
a Will, then the remaining assets will transfer as stated by the Will. If the decedent did not leave a Will, then the remaining assets are distributed according to Michigan’s default “intestate” laws.
When a person dies, how do their creditors get paid?
By the decedent’s Estate or the decedent’s trust if revocable during life. A claim filed against the Estate is submitted to the Personal Representative, and a claim against the Trust is submitted to the trustee. There are specific time limits to when a claim can be asserted against an Estate or Trust, and failure to
do so could result in the creditor’s claim being barred.
Medicaid Estate Recovery
If I receive Medicaid while in a nursing home, can the State of Michigan take my house?
Under federal law, the States are required to seek recovery for Medicaid payments for nursing home services, home and community based services, and related hospital and prescription drug services from the estate of a deceased recipient who was age 55 years or older at the time of the services were received.
Michigan passed a law in 2007 which did not go into effect until May 23, 2011 effective retroactive to July 1, 2010.
Which assets are subject to estate recovery?
The federal law requires, “all real and personal property and other assets included within the individual’s estate, as defined by state law”. Assets held in a revocable trust and assets that pass upon death outside of the probate estate are not subject to estate recovery. Also, Medicaid may not charge interest on the estate recovery claims.
What are the priority of claims?
Michigan gives Medicaid claims lower priority to costs and expenses of administration of the estate, funeral and burial expenses, and statutory allowances.
Are there any times that Medicaid will not try to recover from my estate?
Medicaid will not ask for money if one of the following persons is living:
- Spouse
- A child under the age of 21 years of age.
- A child of any age who is blind or permanently and totally disabled.
Will Medicaid Defer or postpone collecting funds?
- A survivor who was residing in the home and providing care for a period of at least 2 years immediately before the date of the recipient’s admission to a medical institution, and that care allowed the recipient to live at the home rather than in an institution.
- A sibling who has an equity interest in the home who was residing in the home for a period of at least 1 year immediately before the recipient’s admission to a medical institution.
If none of the 5 situations apply to me, will Medicaid file a claims against my estate?
Medicaid will determine the estimated costs of recovery versus the estimated amount to be recovered. Also, to determine if there is a recovery if that would cause an undue hardship.
What is an Undue Hardship?
After an undue hardship application is filed, Medicaid may grant a hardship waiver when:
- The estate property is the primary income-producing asset of the beneficiaries, such as a family business or farm and the income produced by the asset is limited.
- The estate property is a home of modest value; or
- Recovery from a recipient’s estate would cause a survivor to become or remain eligible for Medicaid.
An applicant for an undue hardship must also satisfy a Means Test.
What is a Means Test?
The means test is applied to make sure an actual hardship would result if Medicaid recover is made. To pass the means test, an applicant must prove that:
- Their total household income is less than 200% of the poverty level; and
- Their total household resources are less than $10,000.
Can the Personal Representative charge a fee for his or her services?
Yes, a “reasonable” fee under Michigan law, unless the Will states otherwise. What is considered
“reasonable” is often a source of litigation, and there is no set figure or range which is recognized as reasonable. Rather, what is reasonable depends on the specific facts and the complexity of
administration. The Personal Representative’s reasonable fee is paid with Estate assets.
Can the Personal Representative retain an attorney to assist with administration?
Yes, under Michigan law, unless the Will states otherwise. Because the duties of a Personal representative are not intuitive and are complex, it is highly recommended that a Personal Representative retain counsel to assist with administrative. The Personal Representative’s reasonable attorneys’ fees are paid by the Estate.
CONTESTED GIFTS
Can a gift be “undone”?
Yes, with Court involvement. Sometimes a transfer is called a “gift” but was not
actually intended to be a gift, or was the gift or was tricked or lacked mentally capacity
to understand what he or she was gifting.
LACK OF MENTAL CAPACITY CLAIMS
What is the standard for mental capacity to make a will or a trust?
To have sufficient mental capacity to make a will or a trust, an individual must satisfy four requirements. First, the individual must be able to understand that he or she is providing for the disposition of his or her property after his or her death. Second, the individual must be able to know the nature and extent of the property that he or she owns. Third, the individual must be able to know the identity of his or her heirs. Fourth, the individual must be able to generally understand the significance of signing the document.
Does the same mental capacity standard also apply to will or trust amendments or
revocations?
Yes. Just as an individual must possess sufficient mental capacity to make a will or trust, the individual must also possess sufficient mental capacity to execute a document that amends or revokes the will or trust.
When is mental capacity evaluated?
In lackofcapacity litigation, the Court’s job is determine whether the individual had sufficient mental capacity at the time the estate-planning document was signed. Even if the person lacked mental capacity before and after the signing, if the person had sufficient mental capacity at the precise time it was signed, the estate-planning document will be upheld.
How do you prove lack of mental capacity?
In lack-of-capacity litigation, it will be highly relevant whether the individual who made the will or trust
trust was diagnosed with any mental illness, such as dementia or Alzheimer’s disease; whether the individual was suffering from extreme pain or weakness; whether the individual was taking any medication with the potential to cause side effects; and whether the individual’s medical records
reflect mental impairments. The doctors who treated the individual will be key witnesses, as will be those who had the opportunity to observe the individual’s conduct, statements and thought processes.
The parties to the litigation may retain expert medical witnesses to provide opinions. The opinions of the attorney who drafted the challenged document, as well as persons who witnessed or notarized the document, will also be important.
UNDUE INFLUENCE CLAIMS
What is undue influence?
It is a claim brought to “undo” an estateplanning document, gift, or other transfer of property. To establish undue influence it must be proven that the person was subjected to “threats,
misrepresentation, undue flattery, fraud, or physical or moral coercion”sufficient to “overpower volition, destroy free agency and impel” the person to act “against his inclination and free will.” Because undue influence typically happens behind closed doors, Michigan has established a presumption of undue influence if the evidence establishes: (1) the existence of a confidential or fiduciary relationship between the person transferring the property through the transaction and the fiduciary; (2) the fiduciary benefits from the ransaction; and (3) the fiduciary had an opportunity to influence the person’s decision
in that transaction. If the presumption is satisfied, then the burden shifts to the fiduciary to prove there
was no undue influence. If the fiduciary fails to rebut the presumption, then the interested person challenging the transaction wins and the transaction will be undone.
