Hire a Convict

Prison

Want to hire a convict but a little worried about what happens if he commits a crime against a customer? The Michigan legislature recently enacted some protection. Public Act 360 of 2014 (effective 1/1/2015) allows the Department of Corrections to issue a Certificate of Employability. The Certificate can be introduced as evidence of an employer’s due care when hiring. Perhaps more important, a Certificate establishes that an employer did not act negligently for failing to give due regard to past convictions.

Eric J. Scheske

The Inherited IRA

Law Firm PicWhat is an “inherited IRA”? It’s simply an IRA that a person inherits from a dead person.

When a person dies, only his spouse can roll over the dead person’s IRA into their own IRA. Every other beneficiary must hold the IRA as an inherited account . . . as an “inherited IRA.”

They’re treated differently than traditional IRAs: With an inherited IRA, the owner may withdraw funds at any time without tax penalties and, in fact, is required either to withdraw the entire balance within five years after the original owner’s death or take annual minimum distributions. And an owner may never make contributions to an inherited IRA.

A further distinction: An inherited IRA is not exempt in bankruptcy. The U.S. Supreme Court recently issued a decision in this matter (Clark v. Rameker), thereby resolving a split in the circuits.

Eric J. Scheske

A True Urban Legend

Firm Sign

We’re waiting for the movie:

Attorney “Charles Vance Millar—a wealthy Toronto bachelor and an irrepressible practical joker—stipulated in his will that he would award a large portion of his huge estate to the woman who could give birth to the most number of babies within a 10-year period. His death on October 31, 1926 sparked Toronto’s Great Stork Derby, which lasted until 1936. . .

“In the end, four women received $125,000 . . . for making nine babies each. Two women actually produced 10 children, but both were disqualified for legal reasons. One woman suffered two stillborn infants (only live births were counted), while another had several children out of wedlock (unless specifically outlined otherwise by the will’s author, Toronto law only allowed legitimate children to be included in a will). The women received $12,500 each as consolation prizes.”

Link.

Sales Tax Break

Trade In Car

A recent amendment to the General Sales Tax Act excludes from sales tax the agreed-upon value of your trade-in when you buy a new or used vehicle.

Unfortunately, the total amount of the exclusion cannot exceed $2,000. This amount increases $500 per year, commencing January 1, 2015, until the maximum exclusion amount is $14,000. At that point, the amount of the trade-in exclusion will equal the agreed-upon value (as agreed upon between the customer and dealership). See Public Acts 159 and 160 of 2013.

Eric J. Scheske

“New” Uncapping Exemption

Law Firm PicTransfer Your House Now?

Beginning December 31, 2013, a transfer of residential real property does not result in real estate tax uncapping if the transferee is related to the transferor by blood or affinity to the first degree and the use of the residential real property does not change following the transfer. MCL 211.27a(7)(s). Residential real property means real property classified as residential real property under MCL 211.34c(2)(e). For example, a transfer from a parent to a child would not cause an uncapping.

Please be aware, however, that it appears that a transfer from a parent’s revocable trust or decedent’s estate to a child would be an uncapping.

Note: Before you run off and put your kids on the deed, you need to be aware of potential pitfalls of such arrangement. Consult with a professional.

Eric J. Scheske