Protecting Your Inheritance:

How a Recent Michigan Court Decision Empowers Property Heirs

When a loved one passes away and leaves you their home, what happens if a dispute arises over who really owns it? Do you have to wait for the deceased person’s estate to handle the legal battle, or can you take action yourself?

A recent unpublished decision by the Michigan Court of Appeals, Ohla Young v. Lisa Marie Kashat and William Peters (Docket No. 373554), clarifies that individuals who inherit real estate through a will have the direct legal right to sue to protect their property.

The Background of the Case

In Young v. Kashat, a mother (Olena Kislomed) explicitly left her house in her will to her daughter, Ohla Young. After the mother passed away, a dispute arose involving a quitclaim deed that supposedly transferred the house from the estate to both Young and the deceased woman’s granddaughter, Lisa Marie Kashat. Young filed a lawsuit under her own name—rather than acting as the official representative of the estate—to clear the title to the home and evict the defendants. She accused the defendants of fraud, slander of title, and conversion, seeking to undo the property transfer.

The Lower Court’s ruling

The Macomb Circuit Court originally dismissed Young’s lawsuit. The judge reasoned that if the deed transferring the property was indeed fake, the house would technically revert back to the deceased mother’s estate. Because of this, the judge ruled that Young was not the “real party in interest”—a legal term meaning the person who actually possesses the legal right to bring a claim. The trial court believed that only the estate itself could sue.

The Court of Appeals Decision

The Michigan Court of Appeals disagreed and overturned the trial court’s dismissal.

The appellate judges pointed to the Estates and Protected Individuals Code (EPIC), which dictates that the title to real estate automatically passes to the named heirs the moment the owner passes away. Because Young was specifically given the house in the will (legally known as a “devisee”), she was vested with an immediate, direct right to the property. The court ruled that because real estate passes directly to the person named in the will, that person is absolutely a proper party to bring a litigation concerning a deceased person’s real estate. Therefore, the court found that Young had every right to bring her claims of fraud and property disputes to court in her own name.

What This Means for You

This ruling is an important victory for property rights and heirs. It ensures that if you are left real estate in a will, you have strong, immediate legal standing to protect your inheritance. You do not necessarily have to jump through the administrative hoops of opening or managing an estate to defend your property against fraud, disputes, or fraudulent deeds.

If you are facing a dispute over an inherited property or need assistance navigating a real estate conflict, our firm is here to help you protect what is rightfully yours. Contact CMDA today to discuss your situation.

John D. Gwyn is an attorney in our Livonia office where he focuses his practice on commercial litigation, real estate law, community association law, and municipal law. He has broad and extensive experience of over 25 years in matters involving commercial and consumer litigation primarily focused on the representation of community associations and financial institutions. Mr. Gwyn currently represents developers, condominium and HOA associations regarding matters involving real estate, contract, and construction issues. He has handled all facets of litigation in matters related to bylaw violations enforcement, collections, corporate civil rights defense and creditor bankruptcy matters. Mr. Gwyn has also spent a significant part of his legal career representing banks and credit unions in proceedings related to compliance, negotiable instruments, construction lien foreclosures, receiverships, fraud litigation, probate and collections. In 2021, he was selected as a Top 20 “Go To Lawyer” in Real Estate and Condominium Law from Michigan Lawyers Weekly.

He received a Bachelor of Arts Degree in Communications from the University of Michigan in 1986 and earned a Juris Doctorate Degree from the former Detroit College of Law, now known as the Michigan State University College of Law, in 1990. After attending Kings College in London, England, he became a graduate of the Institute for International Legal Studies.

Mr. Gwyn’s affiliations include the State Bar of Michigan, with membership in the Consumer and Bankruptcy Sections; the Oakland County Bar Association-; the Detroit chapter of the Consumer Bankruptcy Association (CBA); the Community Associations Institute (CAI); the American Bankruptcy Institute (ABI); the United Condominium Owners of Michigan (UCOM); and the Commercial Law League of America (CLLA). As a former Young Lawyers Section Chairman of the Macomb County Bar Association, Mr. Gwyn received the Association’s Special Service Award. He also served as a member of the Pro Bono Division of the Macomb County Legal Aid Bureau and has contributed to various legal publications throughout his career.

John can be reached at (734) 261-2400 or via email at jgwyn@cmda-law.com.

That is why, as your recent high school graduate prepares to head off to college or pursue opportunities far from home, there are three legal documents that should be added to the packing checklist: 1) A medical power of attorney; 2) a financial power of attorney; and 3) a Will. These should be in place before a young adult leaves home.

Medical Durable Power of Attorney
A medical power of attorney (MPOA) must be in place for a parent to have authority to make medical decisions in an emergency or in a situation where the child is unable to make medical decisions on their own. This document nominates a parent, or both parents, to be the child’s patient advocate. It should include HIPAA compliant language to authorize the patient advocate to have access to the child’s private and protected medical information. It may also include instructions about life-sustaining treatment and organ donation.
I experienced first-hand the importance of the MPOA when one of my children went through serious medical treatments their first year in college. I have also dealt with a frantic mother whose daughter had a medical emergency at college, and the mother was denied information about her daughter’s condition because there was no authorization in place to release information to the mother.

Without an MPOA in place, a parent may have to go to court where the child is located to be given authority to make medical and decisions for the adult child. Which makes this document even more important if the child has a parent that he/she/they does NOT want to have a say in the child’s medical treatment or access to information. Or the child might prefer a stepparent over a biological parent. This often arises where a child is estranged from a parent or in blended family relationships. Both biological parents have equal rights to be appointed in court as guardian for an adult child unless there is an MPOA that prioritizes one parent over the other or nominates a stepparent instead.

Financial Power of Attorney
A financial power of attorney (FPOA) gives a parent – or other trusted adult – the authority to make financial and legal decisions on behalf of the adult child. This authority will be needed in the event of an accident or illness that renders the child unable to engage in financial or legal transactions. It may be necessary to access bank accounts, engage with a child’s employer, deal with the college, and handle routine matters, such as auto insurance or an apartment lease. The FPOA allows a trusted adult to step in without getting judges, courts, and lawyers involved.

Last Will & Testament
Young adults are immortal. Remember how that felt? The MPOA and FPOA are in place for any distressing events along life’s journey, but if the unthinkable happens, a Will may be helpful to make sure that the right person is given authority to oversee disposition of the child’s property and to commence any legal proceedings required to hold others accountable for negligent actions.

A Will can be a simple document by which a young adult acknowledges their mortality and by which they pronounce support for a beloved person, a favorite charity, or a cause. While a Will is not as critical as the MPOA and FPOA, it is important to have if a young adult wishes to exclude an heir-at-law (perhaps an estranged parent) from inheriting through the child or would rather support a sibling or favorite charity rather than a parent.

Additional Recommendations
In addition to the three legal documents above, there are some practical steps a young adult should take before venturing from home:

• Add beneficiaries to financial accounts. This will allow the accounts to transfer to the designated persons without the need for probate (or the Will).
• Leave a copy of important papers (driver’s license, Social Security card, auto registration and insurance card, bank account(s), etc.) with a parents or sibling.
• Add a parent or other person as emergency contact in a phone or keep a small emergency contact card in a purse or wallet.
• Give a parent or sibling the name and contact information of a roommate or college friend.

We’ve Streamlined the Process for Busy Families
Having had three children go through college, I am aware that preparing for college life is hectic for parents and their adult children. Therefore, I have implemented a streamlined process for young adults to quickly obtain these important legal documents. After a phone or video conversation with a young adult (they are the client after all), the young adult will come to our office where I will explain the legal significance and operation of the documents in plain English. Ideally, parents will attend also to ensure that all family members understand the legal rights a parent has – and doesn’t have – once the documents are signed. While I will spend as much time as needed, most appointments take less than 30 minutes.

Investing a little time to obtain these important legal documents allows parents, or trusted persons, to act in emergency situations without the confusion and delay that can occur without the documents.

Cost
I feel so strongly about the importance of these documents that I offer discounted bundle pricing.

Please contact Norman (Gene) Richards or his legal assistant, Rita Turner, to schedule an appointment. They may be reached at (734) 261-2400 or by email at nrichards@cmda-law.com or rturner@cmda-law.com. Mr. Richards is available to meet throughout the day and on select evenings.

Norman E. Richards (Gene) is a partner in our Livonia office where he focuses his practice on estate planning and elder law. He assists clients with the development of customized estate plans to address their specific needs, including family owned businesses, senior adults concerned about long term care needs, and special needs trusts for children with special needs. He may be reached at (734) 261-2400 or nrichards@cmda-law.com.

CMDA assists clients with the development of customized estate plans to address their specific needs, including family owned businesses, senior adults concerned about long term care needs, and special needs trusts for children with special needs. Please reach out to (734) 261-2400 for more information.

Urban Aging News is a quarterly publication that provides information, insight, and inspiration for Metro Detroit’s maturing adults. Check out the Urban Aging News Fall 2024 issue.

Norman E. (Gene) Richards is an attorney in our Livonia office where he focuses his practice on estate planning and elder law. He assists clients with the development of customized estate plans to address their specific needs, including family owned businesses, senior adults concerned about long term care needs, and special needs trusts for children with special needs. He may be reached at (734) 261-2400 or nrichards@cmda-law.com.

A ladybird deed transfers real estate property to a designated individual or individuals, called the beneficiaries, upon the death of the owner, who is the grantor. Until the grantor dies, they retain full control over the property, and still have the right to dispose of it. This means the grantor can choose to change the beneficiary, or to lease, sell or otherwise dispose of the property at any time. This lifetime power is known as an enhanced life estate.

As long as the grantor still owns the property at the time of death, then the beneficiary of the ladybird deed automatically takes ownership of the property, without needing a trust or going through probate.

Avoiding probate is what makes ladybird deeds so attractive. It is much cheaper and easier to prepare and record a deed that transfers property upon death than it is to go through a probate proceeding or to create and administer a trust to transfer the property.

There are other benefits as well. Because the grantor retains full control over the property after signing the ladybird, there is no gift or otherwise taxable transfer. Also, if the property is the grantor’s home, the grantor continues to qualify for the Principal Residence Exemption and there is no uncapping of the property tax rates. Once ownership transfers, the property taxes will remain capped, provided the beneficiary is a qualified relative and the property is used as a qualifying residence.

So, the ladybird deed can be ideal in some instances, but there are other considerations that are considered hidden risks. These potential problems include, but are not limited to:

Potential conflict if the Property is owned by multiple Beneficiaries after the Grantor’s death

There may be disagreement over the value of and/or whether to keep or sell the property. Such disagreements may require a court proceeding or lawsuit to resolve.

Loss of protection for a vulnerable Beneficiary

If a beneficiary receiving the property has special needs, or is incapacitated, then the protections that would have been in place under a will or a trust will not be available to protect that beneficiary.

Confusion over what happens if a Beneficiary dies before the Grantor

Because a ladybird deed is not a will, there is some legal uncertainty about whether the interests of a beneficiary who dies before the grantor are then passed on to the deceased beneficiary’s heirs – or if this ownership right instead goes to the remaining living beneficiaries. There is no Michigan statute and very little case law governing ladybird deeds to resolve these issues.

Therefore, while there are pluses there are also serious considerations to take into account and consulting a professional is strongly advised.

Norman E. “Gene” Richards is a partner in our Livonia office where he focuses his practice on estate planning and elder law. He assists clients with the development of customized estate plans to address their specific needs, including family owned businesses, senior adults concerned about long-term care needs, and special needs trusts for children with special needs. He may be reached at (734) 261-2400 or nrichards@cmda-law.com.

Some of the assets may transfer to surviving joint owner(s) and some may transfer to named beneficiaries. Those transfers will happen automatically with the appropriate paperwork. Some assets, however, may not have a surviving joint owner or beneficiary. The assets in this category will not transfer automatically and must go through the probate process to determine who receives them. This is where a Will comes into play.

What happens with a Will?

A Will (or Last Will and Testament) is a personal instruction manual for probate. It expresses the intentions and desires of the Will maker. Its primary function is to direct who gets what assets passing through probate. It is important to understand that a Will only applies to the assets passing through probate. It does not control any assets passing by joint ownership or by beneficiary designation. For example, if a Will directs all life insurance be given to a charity, but the life insurance form has a cousin named as beneficiary – the cousin gets the insurance proceeds.

A Will also appoints a trusted person to be the Personal Representative (PR). The PR manages the probate process, which includes collecting assets, handling the deceased person’s debts and taxes, and distributing the probate assets to the people or charities named in the Will.

A Will may be used to disinherit individuals who would naturally inherit from the deceased person, such as a child, parent, or sibling. Alternatively, it may include individuals or charities who would not naturally inherit from the deceased person. A Will may also protect vulnerable heirs, such as minor or disabled children, by naming guardians and conservators for the children.

What happens without a Will?
If there is no Will, there is no personal instruction manual. Michigan law, not the deceased person, determines who will receive the probate assets and the persons eligible to be PR. There will be no distribution to favorite charities, no excluding undesirable next-of-kind, nor will unrelated individuals be included. Also, the default laws sometimes trigger family feuds because the process and results are not as well defined as with a Will.

For example, assume a person has no spouse but has five surviving children. Without a Will, those children all have equal priority to be PR of the probate estate. The children might disagree over who should be in charge. A Will, however, would designate which child the parent wanted to be PR of the probate estate. That clarity provided in a Will might defuse the situation and prevent an argument altogether.

Do you need a Will?

So, do you need a will? Again, it depends. If none of the assets you leave behind go through probate, then a Will is not needed. Similarly, if you want your probate assets to go to your spouse and children, or parents (if you do not have a spouse or children), or siblings (if none of the others) and you do not care who is in charge of the probate estate, then it will not be necessary to have a Will. On the other hand, a Will is crucial if:

• you want certain assets to go to certain people;
• you want to include a charity;
• you want to treat your children unequally;
• you care who is in charge of the probate process; or
• you want to protect a vulnerable loved one.

An example may help put all this in perspective. Imagine a woman named Sally. Sally is unmarried and has no children. Her parents are deceased, but she does have several living siblings who are estranged from her and to whom she does not want to leave anything. Instead, Sally has a partner with whom she has cohabited with for 20 years and to whom she desires to leave most of her assets upon her death. Sally would also like to support a charity with some of her assets. Now imagine Sally passes away owning a house, two cars, several bank accounts, and a brokerage account. Each asset is in her name alone and there are no named beneficiaries.

In this scenario, all of Sally’s assets will pass through probate. If Sally dies without a Will, everything she owned at her death will distribute to her siblings equally. Why? This is because Sally’s siblings are her nearest blood relatives. In the absence of a Will the default probate laws distribute her probated assets to her nearest blood relatives; therefore, her partner and charity will receive nothing. Moreover, her partner will not be involved in the probate process at all, only her siblings.

If Sally dies with a Will, however, she will be able to change that undesirable result. With a Will, Sally may designate her partner to be the PR of her estate. She will give an amount of money, or percentage of her estate, to a charity and the rest to her partner. Sally will accomplish her goals and will exclude her siblings from managing her estate and from receiving any of her assets.

In conclusion, there are many reasons to have a Last Will and Testament. It is the essential legal document by which you decide how your probate estate is handled and to whom your assets are distributed. Without a Will, your estate may pass to individuals not of your choosing.

If you would like to explore whether you need a Will, or if you would like to learn about how to avoid probate altogether, call CMDA to schedule an appointment with one of our estate planning attorneys. As a bonus, if you mention this article when you call, you will be eligible for a free consultation.

Norman E. “Gene” Richards is a partner in our Livonia office where he focuses his practice on estate planning and elder law. He assists clients with the development of customized estate plans to address their specific needs, including family owned businesses, senior adults concerned about long term care needs, and special needs trusts for children with special needs. He may be reached at (734) 261-2400 or nrichards@cmda-law.com.

The U.S. population is increasingly aging. Family members of aging loved ones are increasingly stepping into the role of helper or caregiver. Fulfilling these responsibilities requires a great deal of time, energy and focus. Caregivers should be able to act with minimal complication and resistance. Too frequently, caregivers struggle to overcome legal hurdles when making decisions for their charges. There are five steps caregivers should take to eliminate frustrating, and often costly, legal challenges.

1. Determine the legal authority needed. If an aging person merely needs guidance or prompting with decision-making, this can usually be accomplished informally. If, on the other hand, the caregiver must step in and act on behalf of the aging person, this will require formal (or legal) authority. Legal authority to act on a person’s behalf comes from one of two source: (i) through powers of attorney for financial and health care decisions (POA authority), or (ii) through guardianship and conservatorship authority obtained through a probate court (court authority).

Each of these sources has advantages and disadvantages. For example, POA authority is more efficient and less costly than court authority, but it is less powerful and more likely to be abused than court authority. Financial institutions may reject POA authority while medical care providers may accept it without question. POAs may be impotent if specific language is omitted from the document. And, since POA authority does not override the aging person’s will, court authority may be the best solution if the aging person insists on making bad decisions. It is important to determine as early as possible what types of decisions will be involved and whether the aging person resist the assistance of the caregiver. Regardless of the source of authority, the goal is to have a decision maker with the authority to make appropriate decisions with the least amount of resistance.

2. Prioritize Power of Attorneys. POAs come in two varieties:

• Patient Advocate Designations (PADs): The aging person, or “patient”, gives another person, the “patient advocate”, the power to make medical treatment decisions if the patient is physically or mentally unable to do so. This document may also give authority over end-of-life decisions.
• General Durable Power of Attorneys (GDPOAs): The aging person, or “principal”, gives another person, the “agent” or “attorney-in-fact”, the power to enter into financial and legal transactions on behalf of the principal. The authority continues even if the principal later becomes incapacitated.

Generally, POA authority is preferred over court authority. Going to court should be a last resort. This would be the case if there is no POA in place or if the POA is defective or rejected.

3. Review Existing Legal Documents. Clearly written legal documents that grant authority to act for an aging person are essential tools for caregivers. It is a mistake to assume that a POA will work when needed. It is important that the documents are prepared correctly and contain the necessary authority, or limits on authority. These should be reviewed by an elder law attorney to ascertain if the POAs are appropriate to the situation or need to be replaced.

4. Understand Medicaid & VA benefits for Long-Term Care. Every senior’s financial situation, marital status and care need is unique. Long-term care planning—whether in advance or at the time of need—is never a one-size-fits-all task. Medicaid and VA benefits are needs-based benefits that can be used to pay for long-term care. Each operates under complex rules that seem to change and evolve regularly. It is crucial therefore plan well in advance of the need for long-term care if at all possible. It is easy to unknowingly make mistakes which can be time consuming and costly. A caregiver should always seek the counsel of an elder law attorney about Medicaid and VA eligibility rules and possible advance planning strategies.

5. Build a Team of Experts. A carefully selected caregiving team of experts is a necessary complement to an aging person’s plan of care. The more support a caregiver has, the less likely they are to experience caregiver burnout and the more sustainable the plan of care will be. Keep in mind, relatives and friends are not the only ones to recruit for a care team as not everyone has the personality, time or resources to assist. Team members can include the following professionals:

• Physicians (Primary Care and Specialists)
• Elder Law Attorneys
• Geriatric Care Managers
• Social Workers
• Financial Advisors
• Pharmacists
• Home Care Agencies and Professional Caregivers
• Adult Day Care Centers
• Charities, Organizations and Support Programs

Taking on the role as a caregiver for an aging loved one is a difficult job. To avoid unnecessary stress and confusion, caregivers should complete these five essential steps to eliminate finding themselves in frustrating, and often costly, legal challenges.

Norman E. “Gene” Richards is a partner in our Livonia office where he focuses his practice on estate planning and elder law. He assists clients with the development of customized estate plans to address their specific needs, including family owned businesses, senior adults concerned about long term care needs, and special needs trusts for children with special needs. He may be reached at (734) 261-2400 or nrichards@cmda-law.com.