Plan To Be 100

Lots to blog about in the aftermath of busy lame duck sessions in Washington and Lansing.  In order of importance:

• The Fiscal Cliff Law.  Among the components of the so-called American Taxpayer Relief Act of 2012 (that’s original), is the permanent fixing of the federal estate and gift tax unified credit at $5 million per person ($10 million per married couple) indexed for inflation and with the continuance of portability of the unused credit of the first spouse to die.  The highest rate was increased to 40%.  Although this represents no real change in the law, it punctuates the reality that estate plans for the vast majority of Americans no longer require federal estate tax planning components.  Over the last 10-12 years we have seen the federal estate tax removed as consideration in planning for middle class clients.  Practitioners who have historically relied upon A/B trusts and federal estate tax avoidance of justification for the documents they promote are going to have to change their tune.  It’s over.

• SOL on legal malpractice.  A long pursued objective of the Probate and Estate Planning Section became reality with the signing of Senate Bill 1296.  Now, a claim for legal malpractice expires at the earlier of 2 years after the claim accrues or six years from the date of the act or omission.  This is a big deal to estate planning attorneys who have documents that are created decades before they are tested. A big thanks to Senator Tonya Schuitmaker, who sponsored the bill (as well as her father, Harold, the esteemed probate attorney from Paw Paw); Mark Harter, the Section chair who finally got this done; and Becky Bechler, the Section’s lobbyist.  We are all forever in your debt.

• Annuity Suitability.  Of all the seemingly well-meaning but largely pointless (sorry) “elder abuse” laws that have been floating around over the past couple years, the signing of Senate Bill 467 is probably the most significant.  The bill requires people selling annuities to establish the suitability of the product before making the sale.  In my humble opinion, inappropriate annuity sales to senior citizens is the primary source of financial exploitation of vulnerable adults – and has been for years.  This bill should provide the state, and civil litigators, more tools to go after the bad actors that operate in this arena.

• Interstate Guardianships. Senate Bill 539 provides a process for a person appointed guardian in another state to become guardian in Michigan.  This law should be helpful in those few situations where this issue arises.