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Are there estate and inheritance taxes in Michigan?

Clinton Township, MI |

My father passed away 5 months ago. He had many bonds in my mother's name. My mother has been deceased since 2005. The trustee said he was going to try To cash them to pay the taxes on the trust. I had read on the Michigan government website that there are no estate or inheritance taxes in Michigan. Is this true? My understanding was that these bonds were to be split with my mother's 4 surviving children so how could he take it upon himself to cash them without all our permission to do so?

Attorney Answers 4

Posted

There are potential taxes in Michigan, and the trustee has the duty to liquidate all or some of the assets to pay them. As I stated before, you need to seek counsel who can provide you counsel based on all of the facts and circumstances.

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Posted

There is no estate tax at the state level, but there may be taxes to be paid, such as income tax, etc. If the bonds are not in the trust (if they are in the individual's name), then they are probably not part of the trust estate and should not be liquidated by the trustee but divided among the proper beneficiaries. You need your own attorney.

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Posted

I agree with my colleagues. There are no estate or inheritance taxes in Michigan. There may be income tax consequences, since bonds are usually taxable when they are redeemed. This is especially true if these were tax deferred investments.

James Frederick

***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ***************************************** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state. I hope you our answer helpful!

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Posted

Although I agree with the others on the tax issue, if there were CD's in your mothers name a probate estate should have been opened for your mom unless your father or the children were the beneficiary of them. If your father was then what ever your mother wanted to do with the CDs is mute as she predeceased your dad. If the kids were then this should have been done in 2005. You may want to hire an attorney to flush this out.

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