Marquette, MI (Law Firm Newswire) February 24, 2015 — Michigan Public Act 310 of 2014, effective Dec. 31, 2014, adds 5 new exemptions for family–owned homes, cottages and camps from uncapping the taxable property tax assessment.
Prior to the new law, the children and other loved ones who inherited homes, cottages, or camps often could not afford to keep them, as annual property taxes doubled, or tripled, because of uncapping rules.
Thanks to the Supreme Court’s Klooster decision in 2011, the use of a joint-tenancy prevented property tax spikes. But joint property unduly exposed jointly-owned properties to the divorce and debt claims of the children named as joint owners.
Public Act 310 adds 3 new trust exemptions that will allow children to inherit homes, cottages and camps without the fear of uncapping.
The use of an irrevocable trust is allowed under P.A. 310. If such a trust is properly designed, under Medicaid, it will prevent the loss of the cottage or camp from a nursing home admission. This is subject to a 5-year waiting period under Medicaid.
There is a rental or business purpose trap under P.A. 310. To avoid the trap, resort must be made to the joint tenancy exemption.
Learn more at http://www.upelderlaw.com
The Elder Law Firm of Anderson Associates, P.C.
148 W. Hewitt Avenue
Marquette, MI 49855
Fax: (906) 228-6219