With the Internet, it is becoming easier to find a form and create estate planning documents yourself. However, there are pitfalls to do this. The pitfalls happen because individuals do not know what they do not know. The do-it-yourself (DIY) solution for estate planning is often causes loved family members issues that cannot be correct.

One of the biggest issues that I have seen is when individuals use a friend’s documents as a template. The other person may have had an attorney draft the documents. The unseen problem is that the documents were drafted specifically for the friend’s unique circumstances and planning strategies. While there main be some common language, the documents may not be so easily modified if the two individuals have different estate planning strategies. A simple will can be drafted from a template that contains many variations that be eliminated if they do not fit the client’s needs. The eliminated language may be what the copying individual needs and does not know exists.

At Michigan Gun Law, we have seen what happens when an estate plan is pulled from the Internet. This trust plan was written for individuals residing in another state with some different laws and provisions than Michigan. When the individual became incapacitated, the family had to spend more money to attempt the fix the problems encountered by financial institutions refusing to accept the estate planning documents. The increased cost in finding remedies to the problems is greater than the cost of drafting the trust plan with an experienced estate planning attorney.

Another problem that we have seen is that the estate plans become stale. Estate planning is not a one-time process. An experienced estate planning attorney should be reaching out to former clients on a regular basis to ensure that the life changes have not rendered the drafted estate plan stale or no longer valid. Life is constantly changing and so should estate plans. You cannot sustain the peace of mind by drafting the estate plan once and then placing it in the safe deposit box until it is needed.

A third problem is the lack of funding the trust. If you have pulled templates from the Internet or borrowed from friends, you are not educated on the importance of funding trusts or how to fund trusts. This is the critical that a trust be funded properly to avoid probate upon death. If assets have not been transferred to the trust’s legal ownership, then a probate proceeding is required to transfer the assets. The peace of mind from properly drafting and maintaining an estate plan is the result of finding the attorney with experience in estate planning to develop a lifelong relationship. This should be an attorney; whose firm has an established practice of reaching out to clients and modifying documents. At Michigan Gun Law, the entire team cares about our clients and their families. We rejoice with our client’s happy events and mourn beside our clients when the sadness comes. If you want a lifelong estate planning attorney, contact us to schedule your pre-engagement meeting with our team.

You have created the special needs trust for your disabled loved one, but now how do you properly fund the trust. When an attorney says that you need to “fund the trust,” what they are telling you to do is to transfer assets from yourself to the trust. This may require re-titling assets, such a bank accounts or opening a bank account in the trust name. But there are other ways to fund a trust as well.

One way is to designate the trust as a beneficiary on life insurance policies. A beneficiary designation will bypass the probate court as the insurer agrees to pay the sums upon your death to designated person or, in this case, a trust. The trust will be the legal owner of the insurance proceeds with clear instructions to use them for the benefit of the trust’s beneficiaries. This is an excellent way to ensure that the funds, which you want available for your disabled loved one’s financial needs after you are gone, are spent the way you would have wanted. There are several different forms of life insurance available, such as second-to-die, term life, whole life, and variable life. Be sure to discuss which policy is right for your family’s needs.

Another way is to leave the family home to a third-party special needs trust. This method will not create the real estate as an asset for the disabled person, which can negatively impact their government assistance. The popular method of funding can escape the Medicaid lien that a first party trust would be exposed to. The home can transfer to other beneficiaries after the disabled person has passed away. If staying in the home is not the best option for the disabled person, then the property can be sold, and the proceeds will remain in the trust.  Even if title to the property is retained by the trust, a prudent investor can lease the property, thereby creating an income stream to maintain the property and provide income for pay towards the disabled person’s care.

A trickier way to use retirement funds. However, there are some tax consequences that could occur if this not done properly. If you are considering funding a special needs trust with retirement fund, then speak at length with your financial planner on the benefits and disadvantages to this method of funding.

If you need help funding or drafting a special needs trust, call our Client Coordinator today to schedule your paid Pre-engagement meeting.

When life throws us a curve ball, it is reassuring to know that are ways that we can plan ahead to deal with the pitch from life. I was once told that there would be accidents in life, some small and some large, but none that would alter the course of my life. But for others, life throws a curve ball that alters the course of their life. We know a young man, who was seriously injured in an accident with an all-terrain vehicle. He is now dealing with the consequences of that accident for the rest of his life. I have an aunt who was born with cerebral palsy. While she was able to take care of herself for most of her life, but she did require special equipment and modifications later in her life. While both individuals were thrown curve balls, they managed to continue living life afterwards.

But for others the medical expenses accumulate or the special care that is needed can quickly deplete assets. Often times, fundraisers or Go Fund Me campaigns are done to help the family raise the funds that they will need. For these families, they are unaware of the benefits of creating a special needs trust to manage and disburse the funds that been raised. Before speaking with an attorney on creating a special needs trust for your loved one, consider these common reasons for creating one.

First, assets can be earmarked for the care of the individual with a physical or mental disability. If the individual is a minor, there is no need to seek a conservatorship at the local courthouse as the trustee can collect, manage and disburse assets for the beneficiary of the trust. The trust can provide for a variety of needs and specify how the funds are to be used to benefit the individual.

In addition, a trustee can be selected who will oversee the investment management and disbursement of the trust funds. The trustee is held accountable for disbursing the funds according to the intentions that created the trust.

Third, the trust can minimize disruptions to the individual’s governmental assistance that is received. Naming a family member with a disability in your will can increase the value of their available assets to use and eliminate the financial requirement to be eligible for certain programs such as SSDI and Medicaid, which are needs-based programs. The beneficiary is protected by directing the intended inheritances into a special needs trust to be used to benefit the disabled individual.

Finally, preserve the family’s wealth and resources for the life of the beneficiary. While some states may require that state assistance be repaid after the death of the beneficiary, the trust provides a method to provide just enough during the beneficiary’s lifetime. For divorcing couples with a disabled child, the trust can ensure that payments are received throughout the child’s lifetime from both parents. The parents can designate a third party to be the trustee, who will manage the assets and disburse them for the benefit of the disabled child. The trust can remove the payment from considering whether the child qualifies for certain government assistance programs.

If you are thinking about whether you need a special needs trust or how to implement a special needs trust for the benefit of your loved one, call our Client Coordinator today to schedule your one-hour pre-engagement meeting.

A recent internet search on how to plan for long-term care turned up several results relating to planning for one’s own long-term care during retirement. But how do you plan for long-term care, when the person is your child or spouse who has a physical or mental disability. There are some common steps that would apply to both types of planning.

First, ensure that the plan is financially stable and sustainable. Whether you are wealthy or living paycheck to paycheck. There are steps you can take today to ensure that the finances are available in the future to provide for the long-term care your loved one will require. Determine the costs of the care or if any of the care can be provided in the home. Calculate how much it will cost per year for the care that will be necessary today, in a year, and in five years. Develop a plan to start saving or raising the funds that will be needed. Assess whether government assistance is available to help finance the costs. Find a financial planner that you know, like, and trust to help you invest the funds you can spare or have raised.

Hire an attorney to draft the necessary documents to take care of any legal work that may be necessary. If you are caring for a young child today, decide who will make the medical decisions when they are an adult. This may require petitioning the probate court for a conservatorship or guardianship. Determine if a partial guardianship or conservatorship is possible. Discuss candidates to serve in the roles and the time commitment required to perform each. Will more than one person be necessary? Discuss with the attorney what is the least restrictive means that are available for your situation. Evaluate if estate planning or a special needs trust can resolve any the foreseeable problems for your loved one.

Talk to your insurance agent about the possibility of acquiring long-term care insurance. Explore what are the options available and the cost for each. Evaluate different plans based on what they will cover, when the coverage will take effect and how much it will cost.

If you have a loved one, who will need long-term care and need an attorney on your team, call our office today to schedule your pre-engagement meeting.

If you are thinking about drafting an estate plan and have a family member with a chronic illness or special needs, then the discussion with the attorney should include the benefits of having a special needs trust. Before you have this conversation, you should have a basic understanding of what a special needs trust is and can do for your family member. 

A special needs trust or supplemental needs trust is a specific trust plan that was given official legal status by the federal government in 1993. It is designed to hold an unlimited amount of assets for the benefit of an individual with certain chronic or acquired illnesses, or mental or physical disabilities. These assets are not counted when the individual’s eligibility for governmental benefit programs, such as Medicaid, Supplemental Security Income (SSI), vocational rehabilitation or subsidized housing. Because these governmental benefits are means-tested, the recipient is restricted in the amount of assets the individual has. The special needs trust holds the assets in ways that are generally not counted when determining the eligibility for governmental benefits.

 Establishing a special needs trust can be done in one of two ways: the individual creates his own trust or it is established and funded by a third party. How the trust is established and funded can affect the eligibility of governmental benefit programs. The first method of establishing the special needs trust is where the individual uses his own assets, or those that the individual is entitled to under law, to fund the trust. This is sometimes to referred to as a “self-settled” trust. An example of this would be when a child receives settlement funds following a car accident injury that requires chronic special needs or results in a physical or mental disability, such a traumatic brain injury. The second type is when a family member uses their own earned and saved funds, or those funds pooled together from multiple donors, to provide for the individual’s long-term care. This is referred to as third party trust.

In order to be a valid special needs trust, it must meet certain criteria set forth by Congress. A special needs trust must be irrevocable, meaning that it cannot be modified at a later date. The trust must apply for and have its own separate Federal Identification Number. It cannot use the Social Security Number for the individual, the spouse, or the third party funding the trust. The trust is created to benefit an individual under the age of 65. Finally, the individual is disabled according to Social Security standards.

If you have a loved one who has special needs, it is never too late to create and fund a special needs trust for his benefit. To learn more about special needs trust, contact our office today to schedule an appointment.

One of the questions I hear when meeting with clients for the strategy session of a gun trust is who should be named in the trust document. This always evolves into a discussion on who they have in mind and that person’s status under federal law. The status I am exploring is specific – a prohibited person or a minor.

A prohibited person is the only type of person who should not be named in your gun trust as either a co-trustee, successor trustee or beneficiary. Under federal law, a person is prohibited if they fall into one of the ten different categories of prohibited individuals identified in 18 USC 922. The first place that I evaluate whether an individual should be named in a gun trust is 18 USC 922(g). If the desired person meets any of the nine specifically identified types of prohibited person status, my advice is to provide for him or her in the revocable living trust but leave them off the gun trust.

One of the common types of prohibited persons that we run across are a person convicted of a crime where the punishment includes imprisonment for a term exceeding one year. 18 USC 922(g)(1). The trick with this one is not what the actual sentence was, but what could the person be sentenced to under the law. If judge could have ordered the person to jail or prison for a term exceeding one year, then he is a prohibited person. At Michigan Gun Law, we pull the criminal histories for every person to be named in the trust to ensure that our clients are not inadvertently or unknowingly naming someone who is prohibited within their gun trust.

The next type of prohibited person is someone, who is an unlawful user of or addicted to any controlled substance (as defined in 21 U.S.C. § 802). 18 USC 922(g)(3). An individual who has a Michigan Medical Marijuana card is still an unlawful user under federal law. This is an area where the intersection of federal law and state law has a negative impact. Until federal law recognizes the medical use of marijuana or legalizes the use of it, any one who uses under state marijuana laws is still an unlawful user under federal law. However, a person who is suffering from an addiction to certain prescription medications is also a prohibited person. The reason is that a controlled substance is “a drug or other substance, or immediate precursor, included in schedule I, II, III, IV, or V of part B” of the Controlled Substance Act of 1970. 21 USC 802(6).

A third type of prohibited person is a person who has been convicted of a misdemeanor crime of domestic violence. 18 USC 922(g)(9). The analysis done for this type of prohibited person is whether he was convicted. A conviction is a formal declaration that someone is guilty of a criminal offense. This would include when a person pleads guilty. Our analysis focuses on those individuals who plead under the Michigan Domestic Assault Deferral, MCL 769.4a. This is deferral of the conviction from the public record, but the person is either found guilty or pleads guilty to the charge. This analysis often involves research recent court decisions at the federal level to provide a complete legal analysis. However, most of our clients decide that it is just better to leave this type of person off altogether. The catch is that if a deferral was granted our criminal records search will not find this conviction. This is typically something that our client is personally aware of happening in the past.

The fourth type of person that we typically counsel our clients on is the “minor.” I am not talking the under age of eighteen minor. For an individual to be able to possess, own or use certain firearms that person must be at least 21 years of age. When clients want to name their children as successor trustees, but the child is between the ages of eighteen to twenty-one, we counsel on other options when the child turns the age of twenty-one. Until that happens, our recommendation is to name the child as a beneficiary and another person over the age of twenty-one to possess the firearm until the child is legally able to own, possess or use the restricted firearm.

If you own firearms and any of your loved ones or beneficiaries are prohibited under federal law, a gun trust should be a part of your complete estate plan. Call our office today to schedule your first appointment to prepare a gun trust and complete your estate plan.

After the enactment of Rule 41F, which became effective July 13, 2016, the common question we hear is, “What is the benefit of a gun trust now that it is no longer needed to avoid the Chief Law Enforcement Officer (CLEO) approval for the possession or use of a weapon regulated under the National Firearm Act (NFA)?” Using a trust to get around the CLEO approval for an NFA firearm was just one reason for creating a gun trust. The other benefits for creating and having a gun trust still exist.

One benefit to create a gun trust is to preserve a firearm legacy for future generations. Our founding fathers passed down an ethic and respect for firearms. By the War of 1812, this had been diluted. A gun trust is way for each of us to provide our families written instructions on the importance of the Second Amendment, proper respect for firearms, mandate regular training both on and off the range for handling firearms and shooting, and create an incentive for the need to go beyond basic training.

A second benefit to create a gun trust is for estate planning purposes. With NFA firearms, when a person passes away, the firearm must be transferred to another person that can lawfully own, possess, and use the NFA firearm. The federal regulations provide a tax-free mechanism for this transfer, which must happen. However, the transfer is not necessary when the trust is the registered owner of the NFA firearm. The NFA firearm remains in the trust and the members of the trust can still have access to that firearm.

A third benefit to create a gun trust was to avoid the federal transfer requirements. When a person purchases an NFA firearm in his or her name alone under the federal requirements and tax stamp, no one else can possess or use the firearm without violating the federal transfer requirements. This is true if the use or possession is temporary and for a few minutes. A transfer of an NFA firearm requires the completion of paperwork and transfer of the tax stamp. A gun trust avoids this process for those individuals named as either grantors or trustees of the gun trust. Each named trustee can possess and use the NFA firearms under the trust’s registration of the firearm.

A fourth benefit for the language of the trust can train successor trustees. Transferring firearms to or allowing possession of firearms by prohibited persons can create legal issues for successor trustees. Our gun trusts provide successor trustees with the information to prevent these types of transfers from occurring. The trusts also give successor trustees the discretion of delaying transfers or use of firearms to adult novice firearms user or minor beneficiaries.

While a search of the internet can result in other benefits of creating and having a gun trust for the ownership, preservation and post-death transfer of all firearms, these are the top four benefits that I have identified in my practice as key in decision making for my clients. A gun trust is not about circumventing legal requirements to own restricted firearms, but to begin the creation of family firearm legacy that carries on for generations.

If you are interested in creating or continuing your family’s firearm legacy, contact our intake team today to schedule your pre-engagement meeting and learn more on how a gun trust can complete your estate plan.

One of the many questions that I am asked by clients and other attorneys is “Why is a gun trust necessary?” or “Why do I need a gun trust?” The exact reason why an individual needs a gun trust is unique to everyone. However, the simple answer is to protect your successor trustee from inadvertently breaking the law after your death or disability when transferring a firearm. There are other reasons why a gun trust is necessary, and here I will expand the top three reasons I have encountered in my practice that apply to most of the clients that I have worked with.

The top reason a gun trust is an essential part of an individual’s estate plan is because the individual is looking to a buy a Title II (Class 3 or NFA) firearm. These are highly regulated and only the person the tax stamp is issued to may possess the firearm. Therefore, whenever the individual leaves the firearm at home, which is shared with other people, a transfer in possession is occurring. This transfer is typically referred to a constructive possession, and the transfer is unauthorized. An unauthorized transfer of a Title II firearm is a felony under federal law. Constructive possession is when the firearm is safely stored in a gun safe that the remaining members of the house does not have the key or code to access, but the safe is not impenetrable, and your family members or household members could theoretically break into the safe and take actual possession of the firearm. A gun trust that names the individuals that live in the home would prevent this from becoming something to worry about. 

Reason number two that a gun trust is essential is because a designated beneficiary is a prohibited person under 18 USC 922(g) and there is a desire to leave them a portion of the trust. The named prohibited person can be transferred a firearm by a successor trustee that does not know the federal or state laws concerning firearms. A gun trust can provide for the transfer of firearms to those legally able to own the firearms, and the prohibited person can be provided for within the revocable trust.

The third reason to create a gun trust is to educate successor trustee about the laws surrounding the transfer and ownership of firearm laws. While state laws may provide how to transfer firearms upon the death of an individual, those laws do not cover what a successor trustee needs to know about federal laws, transferring across state lines, what is illegal in other states, or how to transfer a Title II firearm. A gun trust provides the successor trustee with a base line of knowledge before a transfer can be made. In addition, contact information for the attorney that drafted the gun trust is available to the successor trustee to reach out with additional questions.

There are many other reasons why a gun trust is essential. I have found that outside of these top three reasons that the other reasons are unique to person ask for the gun trust. I have heard reasons that include creating a legacy of firearms, families members currently live where certain firearms to be transferred are considered illegal, I am the only firearm enthusiast and I do not want the firearms turned into the police, I want to create a legacy of firearms that I have collected, or my children are still members and they are my only beneficiaries.

You may be identifying with some of these reasons as you are reading this. If you own firearms, you need an estate plan to ensure that your loved ones know what to do with your firearms. If you need more information about gun trusts or how to create one, call (248) 230-2545 today to schedule a Pre-engagement Meeting with our team.

Estate planning for firearm owners is not the same as an estate plan for a young married couple with small children. While the firearm owner may be the young married couple with small children, the estate plan for firearms needs to discuss when, to whom, and how to properly transfer both Title I firearms and Title II firearms. A revocable trust will effectively manage the typical trust assets such as bank accounts, funds from life insurance policies, a house, and distribution of trust assets to beneficiaries, a separate trust designed specifically for the transfer of firearms needs to be a part of the complete estate plan.

A revocable trust designed for the ownership and transfer of firearms is known as either an NFA Firearms Trust or a Gun Trust. While some law firms use these names interchangeably, here at Michigan Gun Law, they are two separate trusts. An NFA Firearms Trust or National Firearms Trust is a revocable living trust designed for the sole purpose of owning and transferring Title II ,also known as Class 3, firearms.  A gun trust is revocable living trust designed for the ownership and transfer of both Title I and Title II firearms.

Title II firearms are those in which the federal government has enacted laws to restrict ownership. Title II firearms include short-barreled rifles and shotguns, machine guns, destructive devices, and silencers, also known as suppressors. All of these firearms require a tax stamp to own and register the firearm to a specific individual. Title II firearms may not be loaned to another person or transferred without the involvement of paperwork and BATFE officials. State laws vary on which of these firearms are legal to own or possess within the state. Some states may allow the ownership and possession of these firearms but restrict the ability to transfer the firearm upon death.

The NFA Firearms Trust provides a means to preserve the firearm after the death of the individual creating the trust, because the trust owns the firearms and has the tax stamp, not the individual. In addition, the trust provides specific instructions to successor trustees on how to transfer the firearms, where to find the relevant laws, to whom the firearms may be transferred, and the requirements under federal law to own or possess a firearm. All this information is important to a successor trustee that may not be as knowledgeable as the firearms owner who created the trust.

Another benefit of an NFA Firearms Trust is that firearms owner can omit a family member that is not qualified under federal law to own a firearm as a beneficiary under this trust, while still providing for the family member in the separate revocable living trust. This eliminates the hard choice of leaving a loved out of the estate plan because of choices that resulted in “prohibited person” status under federal law with firearms.

18 U.S.C. 922(g) defines who is a prohibited person. Some of those people include anyone convicted of a crime punishable by imprisonment exceeding one year, someone who was dishonorably discharged from military service, someone who was adjudicated as mentally defective or committed to a mental institution, a person who is an unlawful user of or addicted to any controlled substance, an illegal alien, or a person convicted of misdemeanor domestic violence. There are other categories of individuals who are prohibited to own firearms under federal law. A thorough review of 18 U.S.C. 922(g) should be done before any individual is named or added to an NFA Firearms Trust. 

Here, at Michigan Gun Law, we vet your chosen successor trustees and beneficiaries before we draft the trust to ensure that no prohibited person is named within the trust documents. In addition, we educate the firearm owner on what steps to take when they learn that a loved one has become a prohibited person.

If you are interested creating an NFA Firearms Trust or a gun trust, call Michigan Gun Law where our attorneys have the experience and in-depth knowledge in this area to craft a gun trust that meet your needs. Contact us today at (248) 230-2545 to schedule your pre-engagement meeting.

            Many times, in conversations with family, friends, or potential clients, I am asked why an estate plan is important. The reasons are varied and personal. Here are the five of the reasons I hear in these conversations about the importance and purpose for estate planning.

  1. I WANT PEACE OF MIND. You work hard to build your live and provide for your family and children. But when it comes to thinking about what ifs, the anxiety arises. For parents with young children, what if the plane crashes on our trip? For parents of children who have been fighting as adults, what will happen if I am not here to make the peace? For parents of children with addictions, how do I prevent them from spending all the inheritance on drugs? The questions that keep people up at night are numerous as the stars in the sky, but the solution is simple: prepare and plan. A properly prepared estate plan can ease the anxiety of what ifs. It can even resolve conflicts over your funeral.
  2. WHO WILL CARE FOR MY CHILDREN? This is a question that troubles most parents. The struggles over choosing who will raise your children after both parents have passed range from not wanting to offend family members to trusting that a chosen person will be the right person for the child. The easiest solution is often to consider the age of the party, the distance from where you live, and does your child know this person. It is serious conversation to have with your intended guardian.
  3. I WANT TO PROTECT MY CHILDREN’S INHERITANCE. This is a question we hear with blended families. As families are divorcing, moving and remarrying, the blended family is real issue. Blended families need to consider how will all the children be treated. My family is a blended family, and we have decided to treat all the children as if they were our children together. But other families choose to keep things separate and provide for the children. With families with his, hers, and ours, the planning needs further consideration. The biggest factor for blended families is trusting that your spouse will not change the estate plan after the death of the first spouse to die.
  4. YOU DECIDE WHAT YOUR FUTURE (AND YOUR CHILDREN’S FUTURE) WILL LOOK LIKE. Terry Schiavo is the case that is often discussed in my office. It is what prompted me to prepare an estate plan. While thinking ahead to scenarios of being on life support long-term, dying with young children, or developing dementia scares everyone, being able to control what will happen when or if that happens is reassuring. When I was a single mother, I had prepared but not signed an estate plan shortly before I was involved in a near-fatal car accident. While I was conscious to think to tell the first responder to the scene to tell my daycare that I would be late (seriously, I was hit head-on by a semi-tractor and merely thought I would be a few hours late picking up my children), I did not think to rely who to call to retrieve my children. I had not shared this information with the child care provider. But fortunately, my designated guardians knew I had chosen them and heard about my accident on the radio. I could recover knowing that my children were safe, well-cared for, and comforted during this time. Having that peace affected the speed of my recovery as I was not worrying about things that I could not change from the hospital bed easily.
  5. AVOID PROBATE. Probate is the process of having the court supervise the authentication of your will, valuing your estate assets, distributing your assets to beneficiaries and heirs, and paying creditors in the right order. Probate can take time, sometimes a year or longer depending on the size of your estate and the amount of fighting amongst beneficiaries. Probate is also stressful on your family and for most grieving family members, they need the assistance of a probate attorney to help them navigate the paperwork and process. While many people believe that executing a will avoids probate, this is not the case. A will is a ticket to the probate court. Avoiding probate requires creating a revocable trust or similar assets, creating joint ownership in assets, or contractually disposing of assets upon your death, this is typically beneficiary designations or pay on death accounts.

If you are worried about the future will look like the day after you pass away, call Michigan Gun Law today, we will help you look to the future and make decisions today that will create peace at your family’s time of grief.