Michigan Designated Funeral Representative

A new law, 2016 Publ. Act 57, effective June 27, 2016, authorizes a person identified as the declarant, to designate a funeral representative to make decisions about postmortem funeral arrangements and the handling, cremation, disposition, or disinterment of the declarant’s body. MCLA 700.3206(2)(a).  The Act includes authority for cremation and determination of the right to possess the cremains, which is an important change. Under prior law, all persons with equal priority as next of kin had to approve cremation.

The Act revises the priority of persons who may decide on final arrangements and inserts a “designated funeral representative” ahead of spouses, family members and others. MCLA 700.3206(3). The only authority with higher priority is a person designated to direct the disposition of a service member’s remains under federal law or Department of Defense regulation, when the decedent was a service member at the time of death. Id

Historic reenactor Les Scott, dressed as the town mortician at the door of his funeral parlor at South Park City Museum, a collection of historic buildings in Fairplay, Colorado

Historic reenactor Les Scott, dressed as the town mortician at the door of his funeral parlor at South Park City Museum, a collection of historic buildings in Fairplay, Colorado

 

A funeral representative designation may be included in another estate-planning document, such as a will or designation of patient advocate, but it must be executed with two witnesses or be notarized. MCLA 700.3206(2)(b). Like a designation of patient advocate, a funeral representative designation may not appoint or be witnessed by a person associated with a declarant’s medical provider, and persons associated with a funeral establishment, cemetery, or crematory that would provide services for the declarant are also excluded. MCLA 700.3206(2)(c).

A funeral representative designation may be revoked by the declarant, or by the representative’s resignation, absence despite reasonable efforts to locate, or refusal act within 48 hours of receiving notice of the decedent’s death. Revocation by the declarant must be in writing and signed with the formalities of the original designation. MCLA 700.3206b.

The declarant may appoint a contingent representative. MCLA 700.3206a(1). The represtentative accepts the appointment by signing an acceptance or by acting as the funeral representative. MCLA 700.3206a(2).

mortuaryCircumstances that would bar an individual from inheriting from the declarant, such as divorce or annulment of marriage to the declarant, desertion disqualify the individual. MCLA 700.2801(2).  Being convicted of abuse or killing of the declarant, disqualifies the individual, MCLA 700.2802(2)(c), and being charged with the abuse or killing of the declarante bars the individual from acting as the designated funeral representative while the charges are pending. MCLA 700.3206(12).

A major concern for an individual nominated to act as designated funeral representative is personal liability for the declarant’s final arrangements. Unless he or she is a special fiduciary, the medical examiner, or the director of corrections in the case of a prisoner, a person who acts as designated funeral representative is personally liable for the costs of disposition to the extent that payment is not covered under a trust, prepaid funeral contract, or other “effective and binding means.” MCLA 700.3206(13). This is alarming because the statute includes no requirement for the funeral director or other provider of funeral or burial services to advise the nominated funeral representative that if he or she accepts the appointment and makes the necessary dispositions that there could be personal liability. The representative is not even required to sign an acceptance of appointment, if he or she accepts by performance.

Adapted with editorial changes from John B. Payne, “Michigan Probate, 2016-17 ed.,” Chapter 13, 125-27 (Thomson Reuters 2016).

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2017 John B. Payne, Attorney

No Power of Attorney? Go for Guardianship

Clients sometimes balk at signing powers of attorney. They say that they don’t need to appoint an agent because their kids are already on their bank accounts. I explain that writing a check does not resolve everything that comes up. Care and placement issues are also important. Without a POA, an incompetent person is adrift on the tide of the chaotic and dysfunctional healthcare industry (calling it a “system” would be paying what we have in this country an unwarranted compliment).

Disputes with facilities and other care providers arise often. Unless someone other than the facility administrator has authority to make decisions for the person who is incapacitated, the healthcare provider has carte blanche to do what it wants with the patient or resident. Absent a power of attorney, the family will have to initiate a much more expensive proceeding to appoint a guardian to assert control over care and end-of-life issues.

For the myriad decisions that must be made for any incapacitated person, an agent or guardian is absolutely necessary. If no family member or friend is authorized to act for the person, the facility is likely to file for guardianship. Of course, it will ask for the appointment of a guardian it feels comfortable working with. That translates into someone who will not interfere too much in the resident’s care.

Judges tend to give facilities what they request. Family members who object to a facility’s nomination for guardian face an uphill battle. Even if the judge does not appoint the professional or guardianship company the facility nominates, “professional” or “neutral” guardians are usually appointed in contested guardianships, not family members.

Where the facility does not file for guardianship, waiting until a guardian is needed is shortsighted. When the lack of a guardian becomes a problem, the need is imminent. Getting an immediate appointment is a problem in most courts. In addition, family members often disagree about who should be appointed. That can delay things for months. The problems associated with guardianship filings should be addressed before there is an urgent need for the appointment.

A power of attorney is a very cost-effective way to address the need to make decisions for a person whose competence is in question. If there is no power of attorney and the person has become incapacitated, guardianship must be sought as soon as possible.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2016 John B. Payne, Attorney

Judicial OCD in Tennessee

In Frustrating the Intent of the Testator, I observed that many appellate courts seem to delight in invalidating wills that were clearly executed by the testator.  If judges take pleasure in destroying the estate plans of the recently departed, Hon. Kenny Armstrong of the Tennessee Court of Appeals should be rapturous to the point of wetting his pants in having pulled the rug out from under an unfortunate deceased testator, his attorney, and two well-meaning, but displaced, witnesses.  It is the epitome of formalism over substance. morris bill 1

On October 10, 2008, Bill Morris (“Decedent”) executed his Last Will and Testament.  In re Estate of Morris, 2015 WL 557970, 1 (Tenn. Ct. App. February 9, 2015).  The last two pages of the document show that the drafting attorney went to great lengths to establish that the testator intended to sign his will and, in fact, signed it.  However, the Tennessee Court of Appeals managed to find grounds to throw out the will as out of conformity with the Tennessee wills statute.

As is typical in these cases, the court first said that it would “endeavor to effectuate a testator’s intent.”  Id. at 4.  The court then invalidated the will because the word “affidavit” appears between the testator’s signature and the witnesses’ attestation.  According to the court, by signing below the “affidavit,” but not above it, the witnesses signed the affidavit, which, of course, was part of the document, but not the will, itself.

It is particularly ironic that the court stated, “There is no dispute that the testator properly signed his will at the end of the document.”  Id. at 2.  Thus, in a paroxysm of perversity, the court vitiated the testator’s signature by finding a hyper-technical error in the witnesses’ signatures intended to verify the testator’s signature.morris bill 2

In Frustrating the Intent of the Testator, I said:

An attorney should spend at least an hour gathering the facts for even the simplest estate, and at least an hour going over the documents with the client, before they are executed. Attorneys who rush through will executions do not serve their clients properly.

If only it were that simple.  It is clear that Bill Morris’s attorney, the witnesses, and Bill, himself, did their very best to execute his will correctly.  Sadly, best efforts are never enough when there is a judge determined to screw up the testator’s estate plan.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2015 John B. Payne, Attorney

Regulation of Powers of Attorney

The director of a non-profit organization that wants to end financial exploitation of the elderly when wills, trusts or powers of attorney are executed asked why powers of attorney are contracts.  She said her organization would like the law to ensure that principals understand what they are signing.  She would like the legislature to pass a law to require agents to tell principals everything they do or propose to do and to provide an accounting to the principal.

Asking why a power of attorney is a contract is like asking why water is wet.  A power of attorney is based on the law of agency, which is a part of the law of contract.  Wills and trusts are also contracts.  A contract is basically an agreement between or among two or more people that is intended to bind them to do or not do certain things.

Michigan and Pennsylvania, as do other states, require a principal to sign an acknowledgment that they understand that they are empowering the agent to act outside of the principal’s supervision.  Agents are also required to sign an acknowledgment that they are bound to act in the principal’s best interests, to keep the principal’s property separate from the agent’s property, and to do what the principal wants done.  This does not prevent financial abuse, but it does put agents on notice that they may be held accountable for misdeeds.

The best assurance that the principal knows what he or she is signing and is appointing the right person is to have an attorney draw up the document and supervise the execution.  Before I prepare a power of attorney, I talk to the principal one-on-one and assure myself as well as I can that he or she knows what he or she is signing.  An attorney is ethically obligated to protect the client and a conscientious attorney will establish an attorney-client relationship with the principal.  I also interview the prospective agents and other family members to assure myself that they will act in the principal’s best interests.  I have drafted over 1,000 powers of attorney for clients and I am not aware of any cases of financial abuse of my clients.  More often, the problems I see reflect weaknesses in powers of attorney.

It is difficult to regulate powers of attorney without infringing on the principal’s right to contract.  A main objective of signing a power of attorney is to ensure that the court stays out of the person’s life and that the principal’s affairs remain private.  The Pennsylvania Supreme Court Elder Law Task Force and the State Bar of Michigan Elder Law and Disability Rights Section Council, on both of which I sit as a member, have been trying to find ways to protect principals without depriving them of their rights.  Requiring registration or formal accounting might offer protection, but either of those raise questions about who will oversee the agent, restrict privacy, and inflict court supervision similar to guardianship.  This is not a simple problem.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com
 
©2014 John B. Payne, Attorney
 

Tax Dodges for Sale on the Internet

A reader of Debtor and Attorney Burned in Asset Protection Scheme asked about an asset protection scheme he found here. He wanted to know whether a “508 Trust” will really provide the kinds of protection the website claims. In a word, “No.”

The website provides do-it-yourself estate-planning documents that could work like a revocable living trust to help organize your assets and (maybe) avoid probate on your death. However, DIY estate planning is very dangerous unless you really know what you are doing and to know what you are doing would take the equivalent of three or four college classes. You would have to study wills, trusts, income tax, personal property, real estate, and probate, among other subjects. Otherwise, you are groping around in the dark.

The website’s claims about tax avoidance and creditor protection are malicious fabrications. There is no hidden mystery in IRC § 508 that will hide a family’s income or assets from either the Internal Revenue Service or a creditor. Section 508 says that a faulty charity is treated as a “private foundation,” which means that it is not tax-exempt. Tax schemes like 508 Trusts are not sophisticated investment vehicles that take advantage of tax shelters, they are houses of cards that fall apart as soon as an IRS auditor breathes on them.

Ordinary citizens cannot take advantage of the tax dodges used by billionaires, such as private foundations and charities. Those types of entities have five- and six-figure price tags. They are not available for download for $500 or $1,000. Tax “gurus” who claim that they can set up trusts or other legal gimmicks to avoid taxes are either deluded or crooked. The best and the brightest tax attorneys and the best and the brightest regulators and legislators have been hammering out tax law since Egypt was ruled by a pharaoh. There is no miracle trust or legal entity that will make the individual’s or family’s income and assets fall off the IRS’s radar. Sorry, but that is the way it is.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com
 
©2012 John B. Payne, Attorney
 
 

Fiduciary Fiasco

Just as a plan of battle never survives first contact with the enemy, estate plans often fall apart in the crucible of the probate process.  Sometimes these meltdowns can be avoided by properly drafting legal documents, but there are times when it is not the plan, but the people, causing matters to go from bad to catastrophic.  A few years ago a client came to me because he was being sued for attorney fees amounting to six figures.

My client had seen me several years earlier when he and his siblings were butting heads over who would be in charge of the mother’s affairs.  He did not hire me then, but he was back because the matter had become a nasty affair in probate court.

My client’s mother was a widow with four children.  Two wanted the mother in a western state in an assisted-living facility.  The others wanted her in a nursing home in Michigan.  She had gone west for a visit and her son had settled her in an ALF and opened guardianship.  Two of the three Michigan siblings, a daughter and another son, went to the western state to contest the guardianship and bring her back to Michigan.  They were successful in moving the mother and her legal matter back to Michigan.

Since the siblings were at loggerheads, the Michigan judge appointed an attorney to act as guardian and conservator (a conservator is in charge of the person’s financial estate).  The siblings then started trying to get the attorney dislodged as fiduciary.  They blew over $300,000 on court costs and attorney’s fees.  The conservator and the court wanted my client to pay a large part of that.  He disagreed and hired me to contest the sanctions against him.  It was a sad situation for all of the family.  By the time the mother died, after years of legal wrangling, her estate had declined from around $850,000 to less than $400,000.

If the mother had foreseen the sibling conflict, she might have used a living trust and power of attorney to establish who would be in charge of her person and estate.  Although this may have discouraged other sons and her daughter from going to court to establish guardianship and conservatorship, some family conflicts cannot be resolved except by a judge.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com
 
©2012 John B. Payne, Attorney
 
 

It Can Be Your Funeral in Pennsylvania

On December 11, 2010, I posted a column entitled, “It’s Your Funeral – Or Is It?” In that post I painted a worst-case situation where a scorned wife might put her husband’s cremains (cremated remains) in voodoo candles or a Porta-Johnny at a Korn concert. I said that a decedent’s control over his body ends at death and court cases have established that a person has no property interest in the body that extends past death. Although it makes my mouth taste as if it was full of cremains, I am forced to admit that I was wrong with regard to Pennsylvania.

My esteemed colleague, H. Amos Goodall, Jr., of State College, Pennsylvania, has informed me of an often-overlooked Pennsylvania law. This provision, which pertains to health-care powers of attorney, allows a properly appointed health care agent to “make anatomical gifts, dispose of the remains and consent to autopsies.” 20 Pa.C.S.A. § 5456. I am now revising my Pennsylvania power of attorney to include these powers.

Therefore, if you are a Redwings fan in a family of Penguin zealots you can now ensure that they will not flush your cremains in the men’s room at CONSOL Energy Center or add them to a concrete lawn sculpture of Iceburgh. Appoint a fellow Redwings fan (assuming you can find one in southwest Pennsylvania) as your health care agent and give him or her authority to make your final arrangements–for example, burial in Allegheny Cemetery under a massive monument with a Redwings wheel and wings. For a proper health-care power of attorney, call my Pittsburgh office below.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com
 
©2011 John B. Payne, Attorney