Account of Convenience or Joint Account?

             This daughter, Anne, caused an expensive mess when her Dad added Anne’s name to their Dad’s bank account. The original purpose of adding Anne’s name to the account was for her to help Dad pay his bills.

             Creating a joint bank account allows that new joint owner to take the money in the joint account for any purpose.  Here, in this case, Anne was added to an account of her father and then she used the money for purposes of buying things for herself and her daughter.  So, Anne used Dad’s money for her own purposes and not for the purposes with which Dad intended – not for his own use.

            The Court framed the legal inquiry as: “Was Dad’s money used for the purposes of caring for Dad?”  If not, then the Court will impose a constructive trust on the money in the joint bank account and then the wrongfully acting child (Anne) will have to repay the money into the estate of the Dad, so that the rest of the children or heirs can receive what they are entitled to receive, by will or intestasy.

            In this case, Anne did not treat the joint account like an account of convenience, the new joint owner (Anne) took money for the purposes of buying things for her and her daughter, and now will have to repay that money to the estate of her late father. In short, the evidence showed that Dad intended that Anne help him pay his bills, and the money in the bank account was not intended as a gift.

See case []

For more information regarding the risks of joint ownership bank accounts visit our website at

Or call (248) 643-9530 or email to schedule a consultation.


Third Biggest Mistake in Probate Court

When there is ONLY a Will!

These are a few of the difficulties that arise when ONLY a Will is put in place:

Difficulty #1: Instructions to Probate Judge. What is a Will? A Will is nothing more that a letter of instructions to Probate Judge about how your estate will be divided upon your death. In essence, a guarantee of probate.

Difficulty #2: Unequal Distributions are Possible. A Will deals only with property owned in the decedent’s name alone. Jointly held property (JTWROS) passes to the surviving joint owner – and is not distributed according to the Will. So, for example, if a Will says that all property is divided equally between three children, and one child is the joint owner on a $100,000.00 bank account with the decedent, that bank account is not divided equally with the other children. The bank account passes to the surviving joint owner by contract law, not by the Will in Probate Court.

Difficulty #3. Wills require Conservatorships for Minor Children. Bequests to minor children require the creation of Conservatorships and the annual reporting to Probate Judges of all income and expense for each minor child until age 18. Some Probate Courts require approval prior to the expenditure of funds for the minor child, or before the withdrawal of funds from the minor’s Conservatorship Estate. Upon reaching age 18, the balance of the Conservatorship Estate is paid directly to the 18–year-old child without restrictions – to spend as the 18-year-old sees fit. Usually, not a good decision. In Wayne County, a bond is almost always required by the Probate Court.

Difficulty #4: Guardianships may be required for Minor Children. A Will may require the creation of a Guardianship Probate Proceedings where a parent dies while the child is still a minor, especially in single parent situations. If the Will does not appoint a Guardian, the Probate Court has the power to appoint one, or a public administrator as Guardian who is a stranger to the family. A Court appointed Guardian, can be a different person than the Conservator, which just makes caring for a minor child more difficult and expensive since two different people may be making the care and support decisions for a single minor child.

Difficulty #5: Inventory Fees. Probate Courts require the payment of Inventory Fee that is assessed on the total value of the Probate Estate, usually less than 1/2 of 1%. This fee is completely avoidable with the use of a funded revocable trust for the decedent’s personal and real property.

Call (248) 643-9530 or email for a consultation.

For more information visit our website


The law invariably lags behind technological advances. A new product or service may take off very quickly (the iPhone is not even 10 years old), or it may equally fall off as a fad as fast as it started. (Pokemon Go hardly lasted a weekend.)

And the law moves more slowly, attempting to regulate technology where necessary, or incorporate it into practice. Some Federal Courts have provided for electronic filing since 1996; most Michigan State Courts have yet to implement an electronic filing system.

Many of our laws (and consequently contracts) retain the concept of using the United States Postal Service, rather than e-mail. Even though it is much faster, more convenient and expedient to e-mail opposing counsel certain pleadings, the rules still anticipate mailing the documents.

In the same manner, the law does not quite recognize it is easier to reach someone by E-mail than by letter. In fact, at this point in time, people are communicating through Text, Twitter and Messenger because E-mail is too slow!

Yet our laws continue to require us to provide service by either personally serving someone by the use of a process server, or mailing a certified letter, restricted to the person being served. You could send a Complaint by e-mail, Facebook messenger, and text, and it is not sufficient service, even though the person being served is far more likely to receive the document through those technologies than through a certified letter.

However, the law is slowly catching up. It has always provided a means whereby a litigant may petition the court to serve a person through Alternate Service, such as posting on their door, printing in the local paper, or providing it to another adult in the household. The court focuses on a means “reasonably calculated to give notice.” (Rule 4(f) of the Federal Civil Rules of Procedure.)

Many courts are beginning to recognize the technologies of the last decade are far more “reasonably calculated to give notice” to a person than the use of mail or even personal service. When is the last time you received personal mail? When is the last time you looked at an e-mail, text or message?

Recently, a Federal Magistrate allowed the use of Twitter to serve a Kuwaiti national, recognizing Twitter was more likely to give notice than regular means of service. Meaning you could look at a tweet, or open a message and discover you have been served!

Of course, this will raise new issues the law will have to address. How do you verify a person read a tweet? Or that the e-mail was not filtered out as spam, or blocked? For the time being, we will remain with traditional service—certified mail and process servers—and the more common alternate service of posting and publishing. But in the future, more and more persons will be asking for alternative electronic means, and it would appear courts are more inclined to grant such requests.

The next time you read a tweet—you could be served! #YouAreServed!

Second Biggest Mistake in Probate Court

What happens when someone dies and there is no Will?

  1. All assets, bank accounts, CDs, houses, investment accounts, etc. titled in the decedent’s name alone, must be:
    • inventoried – disclosed in a public court filing,
    • taxed with an inventory fee (less than 1%), and then
    • distributed out of the estate by the Personal Representative.
  2. Risk: decedent’s intentions not followed.
  3. Probate court approval of sale of assets; a home.
  4. Conservator appointed to take care of financial affairs for minor children:
    • Conservator could be different than Guardian;
    • If, different, need conflict resolution time and costs money;
    • Annual reporting to Probate Court until minors reach 18.
  5. Guardian: No choice of guardian for minor children or disabled children:
    • Must open Probate proceeding;
    • Annual reporting to Probate Court until minors reach 18;
    • Court Appointed Guardian, could be different than Conservator; time consuming and expensive.
  6. Estates for Minor Children:
    • Annual reporting to Probate Court until minors reach 18.
    • Upon reaching age 18, children receive 100%; no planned distributions.
  7. Spouses and children receive their share through the estate automatically;
    • Spouse gets only ½; children get remaining ½; no opportunity to even out distributions, and no opportunity to disinherit a wayward child, and no opportunity to provide all assets to surviving spouse.

Call (248) 643-9530 or email for a consultation.

For more information visit our website   probate.html

Can you Trademark a Stop Sign?

If you travel in Northern Lower Michigan, you will see merchandise with a Logo of “M 22” in a traffic sign. M-22 is a popular scenic highway along Lake Michigan in Manistee, Benzie and Leelanau County, and fifteen years ago, two brothers printed up a shirt with the popular logo.

Tourists associate “M-22” with an up-north feeling and began to purchase the merchandise to retain the happy memories of vacation spent in the towns, lakes, rivers and shores within this section of Michigan. The logo can be seen on vehicle’s stickers throughout Michigan. Often bringing a smile to shivering commuter in Metro Detroit on a cold February morning with both recalled events in warm sunshine, and expectant hope for the next summer. In fact, it is so popular; people are now stealing the actual M-22 Road Signs!

Recognizing the value of this Logo, the brothers Trademarked the familiar road sign to protect their initiative and investment in producing shirts, mugs, stickers and other items for sale. And now the State of Michigan has sued the M-22 Company, alleging it violated state and federal law in trademarking the symbol of the Northern Michigan Highway.

A trademark is a symbol or words registered with the United States Patent and Trademark Office, whereby a person or company protects the branding associated with the symbol or words. Imagine an apple with a bite from it, or a swoosh, or a golden arched “M.” We immediately recognize these symbols, associating them with Apple, Nike and McDonalds. And companies have the right to protect their investment in this branding by preventing other individuals from using the same or very similar logo.

So what is wrong with the company protecting their idea and trademarking this Logo? Entrepreneurs imagine an enterprising way to utilize a Highway sign, increasing employment and bringing tourism dollars to a local community. Why would the State care?

Because the State is claiming the Manual on Uniform Traffic Control Devices (MUTCD) states “Traffic control devices contained in this Manual shall not be protected by a patent, trademark or copyright.” To obtain federal funds for highway safety programs, each State must adopt the MUTCD as a state regulation—this was intended to create uniformity in road signs so a person can travel from Arizona to Wyoming and understand the signage. Each state may create a unique design, and Michigan chose to maintain the historic white diamond on a black sign with a block “M” over the number.

Since the “M-22” road sign is controlled by MUTCD, the company—according to the State of Michigan—cannot trademark it. Much like “Route 66” or the Statute of Liberty cannot be trademarked.

The trouble developed when another individual began selling merchandise with the Logo of “M-119” (in the familiar white diamond on a black square.) M-119 is another popular Lake Michigan highway in the Petoskey area with a scenic “Tunnel of Trees.” When the person began selling the M-119 Logos, the M-22 company sent a “cease-and-desist” letter, demanding the merchandise stop, since the logo was so similar to the M-22 Logo. M-119 applied for its own trademark and was denied, again because it was so similar to the M-22 Logo.

So does M-22 have a trademark on every single Michigan Highway road sign? In 2012, the Michigan Attorney General issued an opinion letter, stating M-22 cannot have a Trademark on the M-22 sign, because of the MUTCD’s statement on traffic control devices.

In August of 2016, the State of Michigan filed a complaint against M-22, stating the trademark is not valid, and not enforceable. To be clear, the company can continue to produce the shirts and mugs and stickers with the “M-22” Logo—it simply cannot prevent others from doing likewise. Nor could it prevent others from printing M-119 Logos, or M-24 Logos, or even make a shirt with a Stop sign.

Perhaps the lesson here should be to pick one’s battles. If the M-22 Company had allowed others to make a few cups or stickers with “M-119” then very likely nothing further would have happened. But by insisting it has rights to every single Michigan highway road sign, it is very possible to lose the exclusive use of “M-22” and its competitors can now print up products with the M-22 Logo.

It will be interesting to follow this matter and discover whether we can trademark Stop Signs!

Hazards of joint ownership bank accounts

What not to do:

  1. Do not put a neighbor or a friend on your Joint Account. The new joint owner can withdraw 100% of the money in the bank account without your knowledge and approval.
  2. Banks and other creditors can garnish all money in the account for the debt of any of the joint owners, even if the money in the account does not belong to the joint owner. And the garnishment from the creditor can be done without the owner knowing first.
  3. Transfers out of a joint account could be construed as a gift and then, unintentionally, make you ineligible for Medicaid benefits.

What to do: See: .

  1. Make sure that you unquestionably trust the friend/child/relative whose name you add to the bank account or investment account.
  2. Make sure that you know that the friend/child/relative to be your new joint owner does not have any judgments against them, is current in their own mortgage payments, does not owe any State or Federal income taxes, or is not liable for unpaid income or payroll withholding taxes, and is current in their child support and/or alimony obligations.
  3. Make appropriate use of a power of attorney. A power of attorney can be withdrawn at anytime.   That keeps control of your assets within your control.
  4. Best solution? Prepare and fund a revocable living trust. See more:

Call  248.643.9530 or email for a consultation.

How do you avoid probate?

  1. Be sure to have all of your assets in a revocable living trust. This means that your bank accounts, your brokerage accounts and CD monthly statement registration statements read as follows: “Mrs. XYZ Revocable Living Trust dated 01/01/2016”. This includes stocks, tax exempt bonds, US savings bonds, and membership interests in LLCs and stock in privately held small corporations. See  Most of the time, this does not happen, but titling assets in this correct manner is what a properly funded trust looks like.
  1. Have every asset you own in joint ownership with the right of survivorship (JTWROS) with another highly trusted person. This works to avoid probate, but creates a lot of other (avoidable) problems. For example, joint ownership does allow all of the other joint owners complete power over all of the values in the joint accounts – even though the one joint owner did not contribute one nickel to creation of the values in the joint accounts.

Hazards of Joint Ownership: True story: Our Michigan elderly widow added her adult daughter to her own bank account, JTWROS, on a Friday. The plan was to avoid probate. When the widow went to withdraw her money the next Tuesday to pay for a needed medical treatment, her money was gone. Seems daughter had a Florida judgment against her from a Florida bank, and the Florida bank successfully garnished all of the Mom’s Michigan bank account to satisfy daughter’s debt, and Mom was unable to get her medical treatment.

There are other ways to avoid probate that can be explored more thoroughly in a consultation with one of our experienced lawyers.

Call  248.643.9530 or email for a consultation.

Overtime Violations; New O/T Salary $913 Effective 12/1/2016

Overtime Violation Found: The Wage and Hour division of the US Department of Labor fines Citibank Group $1,967,689.00 for misapplying the overtime exemption rules for administrative employees. It is a result of the audit of the internet and security technology subsidiary of Citibank. This affected several hundred workers.

The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status.

Employers Beware: “Employers must understand that simply paying an employee a salary does not necessarily mean the employee is not eligible for overtime,” said Wage and Hour Division. “The back wages and penalties paid in this case should cause other employers to take note, and to examine their pay practices. The Wage and Hour division will continue its vigorous enforcement of the law, including the overtime regulations, to ensure that workers take home every penny they have rightfully earned.”

Effective 12/1/2016, the weekly O/T salary requirement will be increased to $913.00 from $455.00. See DOL news release:

Should Attorneys Ever Sue Clients?

We have all been there—the client you spent an extraordinary amount of time, attention and devotion to, and then fails to pay the final bill. You can keep sending the invoice or making phone calls, but it becomes apparent they are not going to pay. Do you start a suit?

We have been involved in numerous suits representing attorneys collecting their fees, and clients being sued for fees. Here are a few tips:

  1. Wait until two years after the very last activity, and then wait one month more before starting suit. To determine the date of last activity, we use either the final order (Withdrawing as counsel, or Final order of the case) OR the very last billed date. Whichever is later–It is imperative to wait this period.

The Statute of Limitations for Breach of Contract (see the second point below) is six years. The Statute of Limitations for Malpractice is two years. If you start a suit for collection within that two-year period, the client will counter-sue for malpractice. We have heard countless times, “But I didn’t do anything wrong” or “They would never counter-sue for malpractice.”

Doesn’t matter—the counter-suit alone will be sufficient to chill your collection activities. Additionally, you will have to report it to your Malpractice Insurance Carrier, and they may step in to take over the matter!

Recently, the Court of Appeals addressed this issue in Bishop & Heintz, PC v Finch, where the Law Firm initiated collection after the two years, and the client counter-sued (for $3 Million Dollars!) alleging malpractice. The Court threw out the counter-suit, as it was filed more than 2 years after the last activity, and the Statute of Limitations barred the action.

Wait the two years. The client will be barred from filing a counter-complaint for malpractice.

  1. Always have a signed written engagement letter. Always. While oral contracts are enforceable, they only create problems and will make collection much more difficult. Within the agreement include at least:
  • What are you doing, and more importantly, what you aren’t If filing a suit for damages, does the representation include collection, or just getting the judgment? What if a counter-complaint is filed? If a criminal matter, does representation include a bond hearing (should the client violate bond), or probation violation hearing, or subsequent appeal? What if the other side files bankruptcy, or an Estate is needed? It is more important to list what legal actions are not covered by the retainer, as compared to what is.
  • Is the agreement a contingency, hourly or fixed fee? If contingent, include an hourly rate in the event the client discharges you. If a fixed fee, again it is very important to clarify what is not included, in the event additional legal matters arise. List out the hourly rates of the persons working on the file.
  • When will the client be billed?
  • Is there interest on the outstanding amount? If so, limit it to the 7% per annum allowed by statute.
  • Are costs extra, and what do costs include?
  • How will you communicate? Will it include E-mail?
  • What is the policy for destroying the file?

This way the collection activity becomes a simple breach of contact action on a written agreement.

  1. Continue to send the invoices for two (2) years. Don’t stop, simply because the payments stopped. There are two reasons for this–one legal, one practical. As you continue to send the invoices, it becomes an Action on Account Stated. The client has not objected to the bills and it is presumed they have no objection to it. Further, in the (unlikely) event the matter goes to trial, we have found it a very effective and powerful point of persuasion to bring out the invoices, one-by-one, and point out how the client never objected to them month, after month, after month.
  1. If you do start suit, start it in the venue where the Defendant resides. Many lawyers think it is appropriate to initiate suit in the same venue where the action “occurred” (either the court action, or the lawyer’s office), however the correct venue is actually where the Defendant resides. (Interestingly enough, if you initiate a Small Claim, then you can start it in your local District Court and it will remain there if removed to the General Court.)
  1. Start suit as an Action on Account Stated with the appropriate affidavit.

However, before you even start suit, or pursue this course of action, there are a few things to consider.

  • Is your client collectible? If not, what good will a Judgment do?
  • Will this person retain you in the future? While not likely, it is always possible.
  • Will they write a bad review if you start an action? (The bad review may cost you more in new clientele than you could gain on the fee itself.)
  • Your malpractice insurance application may ask if you have started suit against clients. If the carrier sees too many suits for collection, this can raise concerns and cause your rates to increase.

In short, you must weigh the benefits and the detriments before considering whether to start suit to collect an outstanding fee. Taking a few careful steps will reduce the aggravation and ease the litigation process.

Protecting Yourself as a Shareholder or Member

We often set up Corporations (owners are shareholders) and Companies (owners are members) because people are concerned about protecting their individual assets and possession from Corporate liabilities.

The Michigan Court of Appeals recently ruled in Gallagher v Persha (Crt. App. No. 325471) that Creditors may now file a separate action against a shareholder or member for a corporate debt and “pierce the corporate veil.”

In a case of first impression, the Michigan Court of Appeals concluded that: “when a judgment already exists against a corporate entity, an additional cause of action is not needed to impose liability against a shareholder or officer if a court finds the necessary facts to pierce the corporate veil.”  Thus, once a judgment against a Michigan corporate entity exists, be it a corporation or on LLC, and facts allowing the veil to be pierced exist, a judgment creditor can pursue claims against the individuals whether they are shareholders of a corporation or members of a limited liability company.

Simply put—one must maintain a distinct and separate corporate identity, file the timely and appropriate paperwork, and be prepared to establish the legal differences between their company and themselves. It is now much easier to sue individual owners.

Contact us for a review of your business to confirm your individual assets are protected, and you and safe from future litigation.