They say, “beauty is in the eye of the beholder.” That’s especially true when applied to the family cottage. Whether the family cottage is a small rustic cabin on a pristine lake or stream, a luxurious retirement home on one of the Great Lakes or ocean shore, or a family retreat in some stunning mountain region, it’s not “economic value” that is the most important factor in keeping the family cottage, it’s the “emotional value.”

Some would argue that a place is just a place but the people make it special. When it comes to the family cottage, it can be argued “the place” is special, sometimes almost magical, and can transform those who spend time in that place from stressed out, overworked adults back to their carefree days as a child; skipping rocks on the water, swimming off the dock, nursing a sunburn and eating s’mores by the campfire. For most, the family cottage creates a place for memories and traditions to be formed and a safe haven to retreat to for rest, reflection and reminiscing later in life. The family cottage is a constant in an ever-changing world. It’s where experiences can be shared and passed on to the next generation in their purest form.

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Budget Proposal Includes Anticipated Proposals to Change Both Tax and Spending Policies

Michigan Governor Rick Snyder called the consideration of his proposed Executive Budget a “defining moment” for the state this week as the Executive Budget was submitted to state legislators for the 2011-2012 fiscal year. Snyder commented on his budget as an opportunity to “stop living in the past and start looking to the future.”

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While the changes are mainly technical in nature, some are substantive and worth noting. Changes to the Michigan Limited Liability Company Act (“LLCA”) took effect on December 16, 2010.

The LLCA now: Read the rest of this entry »

Spike continues to be a topic of interest around The Depot and from first time visitors.

One of the most popular questions and points of confusion is how a soft looking and fuzzy haired yellow cat acquired the name “Spike.” A consistent mindset is because of The Depot being connected to the railroad, and hence “Spike” because of railroad spikes.

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Penning Receives Prestigious “Five Star” Wealth Manager Award

Attorney Dan A. Penning was named a “FIVE STAR Wealth Manager” for 2010 by Hour Detroit and D Business magazines. Both magazines contracted an independent market research company to administer a research process to identify a select group of wealth managers who were exceptional in both their ability and commitment to overall client satisfaction.

More than 102,500 high net worth individuals and 4.200 financial services professionals were asked to evaluate wealth managers including financial planners, investment advisors, estate attorneys and accountants in the Detroit community. The final list was reviewed by a blue ribbon panel of financial services industry professionals. Fewer than 7% of those nominated were selected.

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“As reported by the Detroit Free Press (see article below) there is unprecedented opportunity for those who have dreamed of owning a vacation home, cottage or cabin to make that dream come true.

After the purchase is completed, furniture moved in and the first family barbeque is voted a success – and cleaned up after, and your children and/or grandchildren are nursing their first sunburn of the summer season, what’s next?

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Launching a boat in Michigan waters during the month of April is not very common. Boat insurance policies, however, generally begin to provide coverage on April 15. If you’ve not given much thought to your boat insurance policy, this spring might be a good time to review your policy and determine if you need more protection as you navigate the Great Lakes or Michigan’s inland lakes while at the family cottage.

Although many homeowner and automobile companies offer boat insurance, the coverage your existing policy provides may not be adequate. Many policies provide a list of “named perils” outlining situations the policy covers, such as fire, vandalism and malicious mischief. If you need more coverage, look for an “all risks” policy that covers more predicaments in which you might find yourself.

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As weather in Michigan becomes warmer signaling the approach of summer, family cottage owners of waterfront property begin thinking about boats, docks, jet skis, etc. Every summer, unfortunate accidents occur which affect family cottage owners and their guests that are related to water and recreational activities: swimmers make a wrong judgment regarding the depth of the water and dive off the cottage dock into shallow water resulting in severe neck injuries, boaters and those driving personal watercraft can be blinded by the sun and fail to see someone skiing or tubing behind a boat resulting in a catastrophic accident, a “slip and fall” during a game of volleyball played on the beach or in shallow water can cause unexpected and long-lasting injuries.

In 1987 the Michigan Supreme Court consolidated two cases, one involving an individual who was injured while slipping on logs that property owners installed at the edge of a lake to prevent erosion. The resulting neck injury caused paralysis from the shoulders down. Three neighborhood associations and individual subdivision lot owners were sued for damages. The defendants included over 200 individuals. The other case involved a child who drowned while she and her mother were visiting relatives. The child died in the shallow part of a pond owned by her aunt and uncle. The Supreme Court determined that the cases could proceed to trial despite the protections afforded property owners in the Michigan Recreational Land Use Act (RUA). The Court determined that the RUA was only applicable to large, undeveloped tracts of land.

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The Michigan General Property Tax Act (the Act) requires real property in Michigan be assessed yearly and taxed at one-half (1/2) of its true cash value (true cash value is the same as market value). However, with the passage of the Headlee Amendment to the Michigan Constitution in 1994, limitations were placed on how much assessments and taxes could go up each year. Since 1994-1995, annual property tax increases have been “capped” at levels specified in the Act and remain capped until a “transfer of ownership” occurs. Once a transfer of ownership occurs, the property is reassessed at one-half (1/2) of the “true cash value” as of that date and the taxes, in most cases, go up substantially. The property tax is capped at the new, higher amount until the next transfer of ownership takes place (Michigan property tax bills show a “Taxable Value” and a “State Equalized Value.” The Taxable Value is the capped value upon which the property tax is assessed. The State Equalized Value approximates one-half (1/2) of the true cash value/market value of the property. Once the property tax is uncapped, the State Equalized Value and the Taxable Value become the same for the year in which the uncapping occurred and the cap goes back into effect at that amount).

The key term in all of this is “transfer of ownership,” which basically means a conveyance of title to, or a present interest in, real property. However, not all conveyances constitute a transfer of ownership. One such exclusion is for a transfer of ownership between two or more persons that creates or terminates a joint tenancy if
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Do you entertain in your family cottage or have your children’s friends over to the family cottage for play dates while on vacation? Perhaps you enjoy having family and friends over for summer cookouts in the summer and holiday parties in December on occasion when you are visiting your family cottage. Have you ever thought about what would happen if your brother-in-law severely burnt his hand on the hot grill while trying to help you cook the hamburgers and you knew your grill was not working properly? What about your aunt Helen, who at eighty-six years old insists on wearing four inch heels to your Christmas party and always has the bottomless glass of eggnog in her hand while spinning in circles under the mistletoe waiting for someone to kiss her?

Injuries and legal action are typically not at the forefront of our minds when inviting friends and family over to the family cottage for a few hours of fun and conversation. But when aunt Helen breaks an ankle, or worse a hip, under the mistletoe and she blames it on your freshly polished wood floor, you will wish you had used some forethought before inviting the family and friends over to the family cottage for a party. Even if we lived reclusively, there is the possibility that someone could stumble on an uneven sidewalk paver or slip on a patch of loose gravel in the driveway while trying to deliver a package. Unavoidable accidents happen, but you should know your liability if someone is physically injured while on your cottage property and take precautions to guard against them. Although having adequate liability insurance and additional host liability insurance is a smart thing to have, it does not prevent a lawsuit.

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