In cases of divorce or separate maintenance, often the issue of spousal support (also referred to as alimony) must be addressed. In the State of Michigan, courts consider eleven factors in determining whether spousal support should be granted to either party. Often the most important of these factors are:

1. length of the marriage;
2. age of the parties;
3. needs of the parties;
4. ability to pay;
5. and past conduct of the parties (fault issues).

If it is determined that one party is entitled to spousal support, the next step is to negotiate the monthly amount and the length of time the party shall receive said award of support. In Michigan, the amount and duration of spousal support is subjective. There is no adopted formula for the courts to follow in determining what the payee should receive.

In this economy, one important consideration is whether an award of spousal support should be modifiable or non-modifiable. Pursuant to MCL 552.28, a court has the power to modify an award of spousal support. However, the parties, upon an agreement and specific waiver of rights, may agree to make an award of spousal support non-modifiable. Staple vs. Staple, 241 Mich App 562 (2000).

There are many reasons parties would agree to non-modifiable spousal support. Perhaps the most common reason is the certainty it gives to both parties. Both parties can, whether he/she is the payee or payor of the support, make a budget for future payments without having to worry that the amount could change at any time. Parties may also agree to non-modifiable support because one party is expecting an increase in his/her income such as a raise in salary, increase in bonus, or payout from a business venture. For example, if the order called for non-modifiable support, the payor would not have to share that increase in income. However, if the support order is for modifiable support, the payee of support could file a motion to increase support based on this increase in income. If a court finds a change in circumstances, it could order the support amount is to be modified.

If the parties waive their right to modify a spousal support order; it does not matter if there is a change in circumstances, a court will not modify an agreement of the parties. Therefore, if the payor of support loses his/her job and is unemployed for months or even years, the spousal support arrearages keep racking up. Such support awards are not subject to bankruptcy. If the payor fails to make court ordered payments, he or she could be held in contempt of court. With the high rate of unemployment in our State, parties have a great motivation to consider modifiable support more than ever. Despite the uncertainty and other draw backs discussed above, with the current economic climate in our State as it is, parties should consider whether modifiable spousal support may be a better option at this time.

Call the Law Office of Simasko, Simasko & Simasko, located in the City of Mount Clemens, Macomb County, Michigan, for your free consultation with a family law attorney regarding spousal support or other divorce and separate maintenance issues.

State lawmakers Tuesday approved a package of bills that will cut the number of trial judges in the state by Thirty Six through attrition. It is not expected that any judges will be lost in Macomb County.

The original bipartisan legislation passed by the House of Representatives in December proposed eliminating 41 trial court judgeships. The Senate amended the bills and reduced the number to 36. ”The last time we eliminated judgeships in Michigan was more than a decade ago, and even though the current reduction it is not as sweeping as we first envisioned, it is a huge step toward reforming the judiciary, assuring access to justice and saving taxpayer money,” said state Rep. John Walsh, R- Livonia, chair of the House Judiciary Committee.

The legislation was recommended in a 2011 report by the State Court Administrative Office. Past reports have urged similar reductions, but the recommendations were not acted upon. The most recent report received the support of the Michigan Supreme Court and all three state judge’s associations. “This will in no way affect a citizen’s right to a speedy trial or full access to justice through the court system,” Walsh said. “It is overdue reform that will save taxpayer money in the long run, and will bring our judicial system to the correct size.”

The package of bills now goes to Governor Snyder for his signature which is expected because Snyder has supported the measure.

If you are tying the knot anytime soon, you may want to consult a family law attorney about getting a prenuptial agreement.  A prenuptial agreement, also referred to as an antenuptial agreement, is a contract between two people planning to be married concerning the property each person owns.  Typically, these agreements specify what each person’s property rights will be if the marriage is dissolved.  This consideration is becoming increasingly relevant as couples are waiting longer to get married.  In delaying marriage, men and women are often more established and come into marriage with a greater number of assets.  An antenuptial agreement can protect those assets in the event of death or divorce.

If you are considering an antenuptial agreement, you must follow some basic rules to ensure it is enforceable should it be scrutinized by a court.  First, you and your spouse-to-be should each consult separate attorneys.  Although hiring two attorneys will increase your short term costs, it could be the difference in your agreement being enforced or thrown out by a judge.  Second, you should be sure to attach a complete list of assets, liabilities and income for both parties that is detailed and accurate.  A court could examine whether your spouse-to-be knew exactly what he or she was giving up when signing such an agreement.  This disclosure can be particularly important when an agreement is barring spousal support.  Finally, you need to execute the antenuptial agreement in a reasonable amount of time before the wedding.  Both parties should have plenty of time to review the agreement, consult with his or her attorney, and propose changes to the agreement.  If the agreement is executed on the day of the wedding, there could be an appearance of duress or coercion, making the terms of the agreement unenforceable.

An antenuptial agreement does not contemplate divorce, but is a tool to protect both parties should there be an unforeseen breakdown in a relationship.  The agreement can be limited in duration or terminate upon an event such as the birth of a child.  It not only protects assets that are premarital; it includes those assets that are premarital and increase in value during the term of the marriage.  While Michigan law does protect premarital assets to a degree, the longer the marriage, the more the lines can become blurred.  If a premarital asset increases in value, that increase in value could be considered a marital asset by a court.  An antenuptial agreement would protect the entire asset.

Antenuptial agreements can also be important when it comes to blended families.  Often when couples have children from a previous marriage, they have concerns that if they are married again later in life, their new spouse will not honor their wishes in the event of their death.  An antenuptial agreement, in conjunction with an estate plan, can ensure that your children are provided for.

While getting an antenuptial agreement can be a difficult topic to broach when making wedding plans with your future spouse; it will give you insurance that your spouse is marrying the person, not the assets.

Call Simasko Law Offices for a free consultation with a family law attorney regarding premarital agreements.

Most people spend more time each year planning a vacation than they do creating or reviewing their Estate Plan. Life is constantly changing and at the minimum, you should take the following steps on a periodic basis.

1.  Create a Will and Trust.  Review these documents after life changing events, i.e. marriage, divorce, a death or birth, a new job, nursing home or long term care admission, etc.
2. Make sure your estate administrator or a close loved one has copies of or access to these documents when they are needed.
3. Have these documents reviewed by an expert to assure you that the constantly changing laws and tax codes will not adversely impact your estate plan.
4. Review your investments and the beneficiary designations on your investments to assure the beneficiaries are listed properly.
5. Change your estate administrator if needed. The person you designated may not want the responsibility, may have relocated or may be unable to perform these duties.
6. Make sure your assets are properly inventoried and titled, also inventory your liabilities and debts.  Make sure your plan administrator has a copy or access to these documents.
7. Make sure your estate plan has the appropriate Power of Attorneys and Patient Advocates in the event that they are needed.
8. Be careful when choosing individuals to manage your estate, choose the most qualified and trustworthy individual, not the most popular.
9. Ask your loves one to assure that their estate plan is in effect and up to date. Make sure they are as prepared as you are for when the time comes, whether it be illness or death.
10. Call Simasko Law Offices for an appointment to discuss your estate plan.

To easily understand the importance of estate planning, search the Web for “the Estate of Spicer H. Breeden.” The case depicts a tragic story that ended with the heartbreaking and untimely death of a beloved reporter from Denver and the suicide of a wealthy Denver socialite.  Spicer Breeden was the great-grandson of Charles Boettcher. Mr. Boettcher was a tremendously successful Denver entrepreneur.  At age 95, he told Time magazine: ”I like to work. I’ve worked hard all my life, and I suppose I’ll keep working as long as I can raise a hand.”

His great-grandson, on the other hand, never had a job in his life and inherited Two Million Dollars when he was thirteen years old from his mother who passed from cancer. The money came from the Boettcher fortune. According to accounts from friends and family, he led a rock star life consumed by cocaine, alcohol, fast cars and women.  The circumstances surrounding both deaths and the handwritten will Spicer left prior to taking his own life created a blizzard of interesting litigation for years to come.

However, the estate planning lesson is this: Spicer should have never inherited Two Million Dollars at age 13! With proper estate planning the inheritance could have been held in trust by a responsible trustee. The trustee could have held the principal and income of the trust and provided distributions to Spicer in a responsible fashion over a number of years. With unfettered access to wealth at a young age, the young man appears to have led a reckless and irresponsible life. With a simple Revocable Family Trust, Spicer possibly could have absorbed a trace of his great grandfather’s work ethic.

In Michigan, if you are attempting to obtain medicaid benefits for your nursing home stay, you must be aware of a recent law change.  Historically, Michigan treated real estate and stocks that you own jointly with a person other than your spouse as being an unavailable asset.   The theory was that it takes all signatures to sell the property or the stock and since the Department of Human Services “DHS” cannot force the joint owner to sell their interest in the property it is unavailable. This Michigan Medicaid law has been changed effective April 1, 2011.  The DHS will treat your interest in the joint property or stock as a countable asset.

As a resident of a Medicaid nursing home in the State of Michigan, the patient has the same basic rights about their life, medical care, and personal treatment as others who live in Macomb County or other local communities. These rights are protected by both state and federal laws. As a Medicaid beneficiary, the patient has the right to the same quality of medical care as other nursing home residents. The individual also has the right to know about and take part in decisions about their medical care and the operation of the nursing home or skilled care facility. The patient also has the following rights:

• The right to exercise all of their civil and constitutional rights. As a resident of the nursing home, the resident can ask for an explanation of the nursing home’s procedures. As a citizen or legal resident of the United States living in a nursing home, the resident maintains their right to register to vote.
• The right to be informed and in control of their life, care, and treatment.
• The right to adequate and proper care regardless of race, religion, national origin, sex, age, disability, marital status, or source of payment.
• The right to personal privacy and confidentiality. This includes accommodations, medical treatment, written and telephone communications, personal care, visits, and meetings with family and other residents. The nursing home or skilled care facility is not required to provide the patient with a private room unless their medical condition requires it and a private room is available.
• The right to send and receive mail the day the nursing home receives it. Nursing home staff shall be forbidden to open mail without the resident’s permission. The home must provide the resident with access to stationery, pencils or pens, and postage, but may charge for these items.
• The patient is entitled to a reasonable, clean, home-like living space. The patient shall be permitted to keep and use personal clothing and as many personal items as space permits. These items may not be harmful to the patient or other residents and may not violate the rights of others.
• The patient has a right to be protected from: neglect, mental, physical, sexual, and verbal abuse, punishment, isolation (unless medically necessary), misuse or theft of their personal property.
• Finally, the Patient has a right to be informed, orally and in writing, in a language they understand, about their rights and responsibilities. This right applies when they are admitted and when they request information during their stay in the nursing home or skilled care facility. The Patient should receive a copy of the nursing home’s rules and regulations and a summary of their rights when they are admitted. The home may ask for a signature indicating that the patient received copies of the nursing home rules and regulations. If during the patient’s stay the rules or regulations change, the patient must receive copies of the changes.

Despite implementation of a process to catch errors, a high eligibility error rate for certain assistance programs at the Department of Human Services (DHS) led the Auditor General to maintain that a material condition still exists, according to a follow-up report issued Thursday by Auditor General Thomas McTavish.

In 2008, the initial report found a material condition and made two recommendations regarding the client eligibility oversight, error identification and error prevention processes for some public assistance programs at DHS.  The specific programs that were audited included the Family Independence Program (FIP), Child Development and Care Program (CDC) and the Medical Assistance Program (Medicaid).

The audit recommended DHS develop and implement a process to identify and correct errors for FIP and the CDC program to improve payment accuracy and concluded that the department had partially complied. It said a material condition still exists because of the eligibility error rates that continued.

Audits showed that the error rates got worse from 2008 to 2010 for two of the programs.

The CDC error rates went from 36 percent in 2008 to 72 percent two years later. FIP error rates were 60 percent in 2008 and 77 percent in 2010.  DHS disagreed that it only partially complied with the first recommendation, saying it believed it had implemented a robust case reading requirement for its offices dealing with client eligibility.  The department pointed to an audit for the first three months of 2011 that showed the error rates for the CDC program dropped to 29 percent – an indication the controls it put in place are working.

The auditor general’s office acknowledged the improvement, but said errors still at that high of a level indicate DHS’s internal controls were ineffective in preventing, detecting or correcting eligibility determinations on a timely basis. Joshua Larsen, director of the office of monitoring and internal controls, said DHS was dinged in the 2008 audit not for having a high error rate, but because it didn’t have a process in place to catch errors. “We feel we have a very stringent process in place now,” Mr. Larsen said.  Mr. Larsen said the department took the 2008 audit seriously and the process in place now is having a positive effect.

DHS spokesperson Dave Akerly also said that what could constitute an error varies, and can include someone simply leaving a date or a signature off an application. “Not all errors are created alike,” Mr. Akerly said.

Full Story: http://www.macombdaily.com/articles/2011/12/14/news/srv0000016019811.txt

What is a Ponzi scheme?

Ponzi schemes, also known as pyramid schemes, are elaborate plan where all the investment funds received from many investors are pooled together with others and investors are paid returns from the deposits of new investors.  Rarely is the money ever invested in real investment vehicles, much less ones that actually can return what is being offered.  These are attractive to potential investors because they advertise high investment returns with little or no risk.

How does it work?

Mr. Ponzi promises the potential investor incredible rates of return.  These investors trust that their money is safe in these great financial vehicles.  Then, rather than invest the money, he collects enough money from his second set of investors to pay the fantastic rates he promised back to his first set of investors.  As the first set of investors talk about the fantastic return, more and more people want to invest their assets.  Eventually, Mr. Ponzi takes all the money and hits the road.

All is well for one or two rounds, but the Ponzi scheme eventually collapses because it takes more and more and more people to support the fantastic rate of return in each subsequent round of investors.  Mr. Ponzi was eventually caught because he violated an important rule:  he never left town.  He wanted to keep going because, well, he liked the money.

How can you protect yourself?

• Use Common Sense.  If it sounds too good to be true, it probably is. An investment opportunity can look like a sure thing, but investors must always think rationally rather than emotionally.  Some investments will offer a guaranteed return, but guarantees of 8 to 12 percent annually are unrealistic because of market fluctuation. If an investment manager is guaranteeing this rate of return with no risks, you should be skeptical.
• Choose Wisely.  Choose an investment manager just as you would an attorney or accountant. You should consider their experience and knowledge, rather than personality or charm. Most Ponzi schemes are orchestrated by outstanding salesmen with an impressive personal resume but, apparently, a lack of professional ethics.  Ask about professional accreditations and whether any complaints have been lodged against the firm or individuals involved.
• Ask Questions.  Don’t be afraid to ask your investment manager tough questions, such as “What exactly am I investing in?”  You need to make sure you understand the plan that is laid out for you.  It is also a good idea to have your children in on the planning so that they can also understand exactly what is being done.
• Demand Detailed Reports.  Most perpetrators of Ponzi schemes send periodic reports to investors with limited information included. This is a major red flag. Honest investment firms provide very detailed, professionally prepared reports on a regular basis, generally monthly, quarterly, annually or all three. Reports should include clear details about any changes in your assets – whether you’ve made or lost money – and most will tell you where your assets were invested.
• Be Patient.  The promise of significant wealth via one successful investment is appealing, but investing should be an intellectual, rather than an emotional, exercise. Think more about what can go wrong than what can go right. Deal with established investment managers.

If you want to find out about options available to you, give Simasko Law Offices a call at (586)468-6793.