A Closer Look at by lifemate


       A Closer Look at                                                  Volume 3, Issue 2


                                                                         Are You Caring for Your
                                                                         Parents?             2

_______________                                                          Michigan Real Estate
                                                                         Taxes – Changing Laws
                                                                         & Interpretations    3


                                                                         Cunningham Dalman, PC
                                                                         321 Settlers Road
                                                                         P.O. Box 1767
                                                                         Holland, MI 49422
                                                                         Phone: (616) 392-1821

  ______________                                                         Fax: (616) 392-4769
                                                                         Disclaimer: This newsletter is for
                                                                         general information only and covers
                                                                         only broad legal concepts. In no
                                                                         way is this newsletter intended as
                                                                         formal legal advice. If you have
                                                                         further questions regarding a legal
                                                                         matter, please consult a licensed

Cunningham Dalman, P.C. is a full service law firm located in Holland, as well as in Douglas, Michigan.
 Our attorneys possess skill and experience in a broad spectrum of areas of practice, and have proudly
                         served the lakeshore community for over 100 years.
                  Are You Caring for Your Parents?
                              By: P. Haans Mulder
                                   Attorney at Law

M        ore and more people are
         moving into their parents'
         homes to take care of them,
                                           avoid the cost and hassle of
                                                   2.      If your parents are
or their parents are moving in with        sharing in the costs of living in
them. In fact, the number of               your house (i.e. paying part of the
multigenerational households has           utility bills, taxes, insurance, etc.)
increased 38% (to 4 million) since         or paying to have your house
1990. Is that the case with you?           remodeled to accommodate their
       Moving in or having your            needs, it is important to have an
parents move in, can be beneficial         agreement for this arrangement. It
in a lot of ways. But, if it is not        is also important for them to keep
done the right way, it can cause a         separate bank accounts. The
host of legal problems. These are          reason for this is Medicaid. The
a few to be aware of.                      Medicaid rules have changed
       1.     Your parents should          dramatically over the last two
have their estate planning                 years and the consequences of
documents (wills, trusts, powers of        your parents making a gift to you
attorney) up to date. If their health      can be a substantial problem. If
declines, you do not want to have          there is no agreement between you
to go to probate court to get              and your parents on the sharing of
authority to manage their financial        these expenses or your accounts
affairs and make health care               are joint (i.e. all expenses are
decisions. Instead, have their             going in and out of one account), it
attorney prepare financial and             may be very difficult to prove that
health care powers of attorney.            your parents have not made a gift
This will save significant expenses        to you. Under the new Medicaid
and stress (by avoiding probate            rules, this could disqualify your
court). Have their attorney also           parents from receiving Medicaid if
prepare a last will and testament          you cannot care for them any more
that will determine who will               and they need to go into a nursing
handle the probate (and be their           home.
beneficiaries) or have them                        3.      Talk to your
consider signing a trust. Having a         accountant about whether you can
trust and properly funding it will         deduct expenses that you are
                                           paying for your parents. This

                            Cunningham Dalman, PC
might include things such as co-                 Plan ahead by contacting an
pays for doctor visits, dental care,      attorney to help you and your
insurance premiums, medical               parents avoid added stress during
equipment and home care.                  this time.
  Michigan Real Estate Taxes – Changing Laws and 
                             By: Vincent Duckworth
                              And Randall Schipper
                                Attorneys at Law

A       new state statute, Public
Act 96 of 2008, immediately
effective, allows a person who
                                          relief to those home owners who
                                          may be having difficulty selling
                                          their former principal residence.
has occupied a residence as a                     Changing interpretations of
principal residence and claimed a         real estate tax laws, however, will
homestead exemption for that              increase some tax burden for new
property to continue the homestead        home builders. Previously,
exemption on a conditional basis          builders of new homes could avoid
for up to 3 years after moving            paying transfer taxes on the
while trying to sell the house,           combined value of a lot and home
provided the former principal             which was ultimately transferred
residence is for sale, not occupied,      to the new home buyer. Under a
rented out or otherwise used for          former interpretation of the State
business or commercial purposes.          Real Estate Transfer Tax
This new law could be a great             (SRETTA), MCL §207.521, et
relief to many people--but the            seq., only the first taxable event in
conditional exemption must be             this process, the signing of the
claimed by May 1 of the given             purchase agreement for the vacant
year. Thus, prompt action must be         lot, was viewed as the event
taken this year to utilize the new        subject to transfer tax. Transfer
exemption. The form needed to             taxes are those tax obligations
claim this exemption, Department          owed by the seller of property to
of Treasury Form 4640, is                 the State and County government
available for download at                 when transferring ownership of
www.michigan.gov/treasury. This           property. These taxes are
new statute can provide some tax          generally collected subsequent to

                             Cunningham Dalman, PC
the recording of a deed or other                This new interpretation of
instrument signifying a change in        the State Real Estate Transfer Tax
property ownership. This prior           (SRETTA), MCL §207.521, et
interpretation has now been              seq. will cause builders to incur a
rejected by the Michigan Supreme         greater tax liability upon
Court in the case of Lake Forest         transferring lots for newly
Partners 2, Inc. v. Dept. of             constructed homes. In addition,
Treasury, 480 Mich 1046 (2008),          because the separate Real Estate
which has held that the value            Transfer Tax Act (RETTA), MCL
ultimately exchanged for a deed is       §207.501 et seq., closely mirrors
the total value of the lot plus the      the provisions of SRETTA,
home constructed on the lot.             builders should also expect that
Accordingly, builders may no             county governments will apply the
longer limit their transfer taxes        similar combined value
based solely on the value of the         interpretation when assessing their
preexisting unimproved lot, if at        transfer taxes as well.
the time the builder conveys title
to such land by a recorded
instrument the lot has been
improved by a structure.

                            Cunningham Dalman, PC

To top