Reverse Mortgages and your Heirs

 

A Reverse mortgage is a financial vehicle that gives older homeowners income by leveraging the equity in their home.  I do not usually like reverse mortgages, for many reasons including the fact that they are burdened with high fees and charges and they allow the elderly homeowner to avoid paying both interest and principal on the loan (which add up quickly, some say exponentially, when it comes time to repay the loan). Because of these reasons, a reverse mortgage should only be used as a last resort so that the elderly homeowner can stay in the home.

 

Another reason I don't like Reverse Mortgages is the impact on your heirs or beneficiaries after the last mortgage holder dies.  Typically, these reverse mortgages have strict repayment rules after the holder's death.  Companies (under FHA rules) make the loan due on the last mortgage holder's death.  Some may give you time to either pay the mortgage from the estate (if there is money in the estate to pay it), or sell the house.  If you ignore the demand to pay, or can't pay off the loan, the reverse mortgage company may initiate foreclosure proceedings against the home.  Is this really something the personal representative or trustee signed up for?

 

For all these reasons, including the headaches that follow the death of the elderly homeowner, one should really look twice into whether a reverse mortgage is appropriate for them.

Adult Children on parent's Auto Insurance may not be Good

For Lots of reasons

Besides the legal liability that may extend to the parents from an adult child's negligence in an automobile, there are concerns also about the Michigan No Fault coverage for that child who is involved in a car accident.

The Michigan Court of Appeals last week re-affirmed a long standing application of the law.  It stems from parents who add children to their auto insurance policies, when those children no longer live with the parents.  Because they no longer live with the parents, they may not be treated as part of the household, and may lose No Fault "household" coverage for that reason.  More importantly, though, is that the children added to the policy are not the Primary Insured on the account, instead they are additional drivers added to the account.

The court held that as additional drivers added to the account, they were not "insured" for the purposes of being able to receive No-Fault benefits under Michigan Law. So, if those children also didn't get coverage for no longer being a member of the parents household, they may be completely out of luck under the Michigan No-Fault coverage.

Free Speech rights and your License Plates

Anyone who has applied for a vanity license plate knows that the DMV won't allow certain combinations of letters (or words).  Their policy often cites "public policy" or "safety" of our transportation system and citizens, or that a particular plate would be "offensive".

Recently in Michigan, a citizen sued the Secretary of State in Federal Court over an overbroad censorship of what could be allowed on license plates.  Guess what?  The Citizen won!  In fact, two Citizens won.

David DeVarti sued the MI Secretary of stated for the denial of his request for a "WAR SUX" license plate. The state defended their denial, arguing that "SUX" carries a sexual connotation inappropriate for a license plate.  The State in effect lost by settling the case.  The settlement required the state to issue the license plate AND to pay $21,500 in attorney fees to DeVarti.

Also, another lawsuit in Federal court asked for  issuance of the plate “INF1DL”.   It too, was initially rejected by the state, but after the lawsuit was filed, the state issued the license plate.

These are significant cases in that they go to the core of our First Amendment right to Free Speech.  There are certain times when certain speech should be restricted, but clearly the State of Michigan had gone too far in their restriction of free speech on your license plates.

Same-Sex Couples and Title to Their Home

Recently the Kent County Michgan Recorder of Deed refused to record a deed of a same-sex couple married in another state.  The deed was to convey their home to themselves as tenants by the entirety (a legal entity allowed only for a married couple).

Because Michigan does not allow or recognize same-sex marriages, Kent County was correct in not allowing the deed to be recorded, as is dictated by current law in Michigan.

So what's the big deal?

Tenancy by the entirety exists only if persons are married at the time the deed is recorded.  Any subsequent marriage will not create a tenancy by the entirety, but will instead default to tenants-in-common.  This is a key distinction, as there are no rights of survivorship when the property is held as tenants-in-common (there is also not the asset protection from creditors available for the home afforded to one spouse under tenancy-by-the-entireties). 

So what is a same-sex couple to do if they want rights of survivorship upon the death of one spouse?  As discussed earlier, even if a county in Michigan did record their deed as tenants-by-the entireties, it may very well be voided by the court and the home ownership would default to tenants-in-common.  Instead, a same-sex couple can get "joint tenants with rights of survivorship" simply by recording the deed in that way.  They won't get the home protection from creditors of one spouse as they would under tenants-by-the-entireties, but at least the surviving spouse would have full ownership, passing outside of probate, upon the death of the other spouse.

As we can see the writing on the wall, same-sex marriage will eventually be allowed in Michigan, as the current Michigan constitutional prohibition against same-sex marriage will probably fall under the next constitutional challenge.  When that happens, any married couple can (and should) consider home ownership under tenants-by-the-entireties. 

The Lawsuit over the Flying Hotdog

The lawsuit over a hotdog launched by an air gun by the Kansas City Royals mascot was decided by the Missouri Supreme Court last week, remanding the case back to the trial court to allow the injured spectator another chance to recover his damages.

The spectator was injured by a hotdog launched by the Mascot at a baseball game.  The spectator suffered a detached retina, and sued the Royals for his damages due to the mascot's negligence.  The trial court said no, getting hit by a flying hotdog is the same as getting hit by a baseball, it is an assumed (inherent) risk of going to a baseball game.  The spectator appealed.

The Missouri Supreme Court ruled that a flying hotdog is NOT an inherent, assumed risk and remanded the case back to the trial court.

What's next?  Perhaps the lawsuit over the flying T-Shirt!


If you are a law nerd and actually want to read the opinion, you can find it here:  http://www.courts.mo.gov/file.jsp?id=74718

Worthless Product Warranty

Even I was surprised to read the warranty for a product I recently bought.  This product is a very high risk product (tends to crash easily when launched), so I understand the company not covering damage due to crashes, but their warranty is ridiculous.  I'm not sure their lack of warranty would stand up to the warranty protections under state law.

Here is the warranty (name of company changed to XYZ):

"XYZ guarantees this kit to be free from defects in both material and workmanship at the date of purchase . . . XYZ reserves the right to change or modify this warranty without notice."

No year-long warranty, not 90 days, not 30 days--you get a warranty on the day you purchase the item.  So what if you bought it online and its delivered 5 days later--Technically, you have no warranty what so ever, according to the terms of the company's warranty.  And, even if you did, they have the right to change it after you bought the item (although there are legal arguments against them doing so).

This warranty wasn't in "small print", but it was not on the box, it was only on the inside of the Instruction Manual.

Social Security, Treasury target taxpayers for their parents’ decades-old debts.

Social Security, Treasury target taxpayers for their parents’ decades-old debts.

Here is a link to a Washington Post article that show's a blatant disregard for due process by our IRS.

How would you like your tax return garnished without any notice of why, or an ability to fight it, or without the government having to prove you received a payment decades ago.

I hope the Federal lawsuit will bear some fruit and force the IRS and Social Security Administration to produce the normal level of due process and proofs that any other entity seeking to garnish an account would have to provide.

http://www.washingtonpost.com/politics/social-security-treasury-target-hundreds-of-thousands-of-taxpayers-for-parents-old-debts/2014/04/10/74ac8eae-bf4d-11e3-bcec-b71ee10e9bc3_story.html

Michigan Senate Bill regarding rights to digital accounts HB 5370

This is at least a step in the right direction.  The Michigan Senate has introduced a bill that would require those holders of our electronic accounts (email, facebook, etc) to give access to those accounts to Trustees of a Trust.  The bill also ties in the same requirements for Personal Representatives of your will, and even an attorney-in-fact of your Durable Power of Attorney.

This is a good start, but what we really need is Federal Legislation, so that we don't eventually have 50 states with 50 different laws covering such access.

So you want to be cremated in Michigan? Not so fast!

Michigan law does not provide for a living person to direct his disposition after death (i.e. cremated, buried) – that would violate the due process rights of post-mortem interests in the body (I can't make this stuff up!).  This is a problem for someone who wants to be cremated.  Unless a living spouse, after death of the other spouse, signs the authorization to have the body cremated, cremation requires unanimous approval of the next of kin.  So if your son or daughter refuses, you can't be cremated--at least in Michigan.

But, other states such as Indiana and Ohio, permit the appointment of a personal representative to authorize someone's final arrangements.  BUT, don't haul the body in the back of your truck, use a licensed mortuary to arrange for pick-up of the decedent in Michigan.

Another way to address this is to include a clause in your will or trust stating that if any beneficiary refuses to cremate you after death, they are cut out of your will (notwithstanding statutory beneficiaries).

Beware of email SCAM telling you are being sued!

Beware that there is a current email scam making the rounds that purportedly tells you that you are required to appear at an out of state court on a particular date.  The email directs you to a link or a ZIP file to download.  DO NOT go to the LINK or Download any file in the email, it is most likely a phishing or virus program.

For the non-legal types, service (delivery) of a Summons or Complaint is almost never allowed by email.  In most jurisdictions, the first notice you get of a lawsuit is personally delivered to you, or in some states sent registered mail with a return receipt required with your signature.

Below is an example of one of the scam emails I received today!

**************

Pretrial notice,

Hereby we inform that you are obliged to come as a defendant
to The Court of Louisiana in February 18, 2014 at 11:30 a.m.
for the hearing of your case of illegal software use.
If necessary you have a right to obtain a lawyer for your protection.

You are kindly asked to have an identity document with you.
Personal appearance is compulsory.

Please find the plaint note with more detailed case information
attached to this letter and study it thoroughly.

Court clerk,
Chloe Mason