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UPDATE: In the spring of 2018, the Michigan legislature revised the statute to address the issue addressed below. The change to the statute can be read here. You should consult with your attorney if you have questions about the change and if you still wish to disinherit certain family members.
A recent published opinion from the Michigan Court of Appeals disallowed a parent's attempt to disinherit an adult child through her last will and testament. The case is In re Estate of Shelby Jean Jajuga. The case originated in Clare County Probate Court but now affects all Michigan probate courts.
Why is this important?
Disinheriting a child in a will is more common than one may think. Many parents provide gifts during their lifetimes instead of waiting until death, or they name their children as beneficiaries under life insurance policies. It's not always because of a lack of love or affection, or a strained relationship, although that certainly occurs.
In Jajuga, the testator/parent named individuals other than her children as the beneficiaries of her last will and testament, and specifically disinherited her children with an explanation that they were provided for in other ways.
At the time of her death, the elderly testator had one surviving child. The child sent her exempt property selection to the personal representative of the probate estate requesting property totaling $14,000 (the maximum allowed that year), but the PR refused to pay it based on the language in the will disinheriting the child.
The "exempt property" allowance is a statutory right for surviving spouses, or children if there is not a surviving spouse, to receive a certain amount ($15,000 for 2015 but adjusted for inflation periodically) of a decedent's personal property (think: jewelry, automobiles, household items or cash).
The child objected to the personal representative's final account and filed a petition to receive her exempt property. The Probate Court ruled in the child's favor, holding that a testator cannot, through a disinheritance provision in a will, prohibit a child from obtaining exempt property.
The Michigan Court of Appeals, in a case of first impression in Michigan, agreed with the Probate Court. The court said, among other things, that a surviving child (if there is not a surviving spouse) has an absolute right to exempt property, a right that cannot be unilaterally taken away by a testator in a will through a disinheritance provision.
The court analyzed cases from other states with similar probate code language, including a case from the Nebraska Supreme Court. Interestingly, the Nebraska legislature later revised its law to fix the issue arising from the binding judicial decision. It remains to be seen if the Michigan legislature will do the same.
This Michigan decision is a published opinion, which means it is legally binding in all Michigan probate courts, unless the legislature amends the law (as mentioned above) or it is reversed on appeal by the Michigan Supreme Court. As of the date of this writing, there is no indication online that an application for leave to appeal to the Michigan Supreme Court has been filed.
You should review your current estate plan documents and talk with your attorney to ensure your intentions and goals are not affected by this decision, and if they are affected, make the necessary adjustments to your estate plan. Options include implementing or amending a revocable trust, changing beneficiary designation forms, or other planning tools.
In other words, you must create estate plan documents beyond a simple last will and testament if you want to provide money or property solely for friends or charities instead of your children.
If you have questions or need assistance, please contact us. We are here to help.
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