Transferring a Disney Vacation Club Interest to the Next Generation

Disney Vacation Club (DVC) contracts are more than vacation perks. They are deeded real property interests that require thoughtful estate planning. Whether points were purchased years ago or more recently, understanding how a DVC contract is titled, and how it will transfer at death, is critical to avoiding probate, unintended ownership outcomes, and potential family disputes.

Three Ways to Title a DVC Contract

Most DVC contracts are governed by Florida law. Generally, title may be held in three ways: individually, in a revocable trust, or through a corporate entity such as a limited liability company (LLC) or corporation. Each structure has different implications for estate administration, tax planning, creditor protection, and long-term membership management.

1. Individual Ownership

Individual ownership can take several forms, including tenancy in common, joint tenancy, joint tenancy with right of survivorship, or tenancy by the entireties. If the deed does not specify the form of ownership, and the owners are not married, Florida law defaults to tenancy in common, meaning each owner holds a separate interest that may be subject to probate.

Joint tenancy with right of survivorship allows a DVC interest to transfer automatically to the surviving owner without probate. Tenancy by the entireties, available only to married couples, provides similar survivorship benefits along with certain creditor protections under Florida law.

For out-of-state owners, the form of title may also determine whether ancillary probate proceedings in Florida are required upon the death of an owner.

2. Titling a DVC Contact in a Trust

A revocable living trust is a common planning vehicle for DVC ownership. A properly funded trust allows the grantor to retain full control during life while enabling the contract to pass to designated beneficiaries at death without probate.

Trust planning also allows families to establish customized provisions addressing maintenance fees, usage rights, and long-term governance of the membership. For example, a trust may require beneficiaries to contribute toward annual dues or risk losing usage privileges. These tailored provisions can help preserve the value of the membership and reduce the likelihood of disputes.

Families should also evaluate whether the trust should retain ownership through the contract’s expiration or distribute interests outright to beneficiaries. Ongoing trust ownership can provide centralized management but may involve continuing administration costs and tax filings.

3. Ownership Through an LLC or Corporation

In some cases, families may hold DVC contracts through an LLC or corporation. While less common, entity ownership can provide a formal structure for shared ownership, allocation of usage rights, and financial obligations through operating agreements or bylaws. Families considering entity ownership should consult legal and tax advisors regarding governance, liability exposure, and potential tax consequences.

Planning for Multiple Contracts and Multiple Heirs

Families with more than one child should consider whether purchasing several smaller contracts rather than a single large contract may allow for cleaner division of ownership. Separate contracts can be distributed individually and may be easier to sell on the secondary market if a beneficiary chooses not to retain the membership.

A key operational consideration is that contracts must carry consistent titling to be linked under a single membership number. Differently titled contracts or separate trusts may create additional membership numbers, which can complicate point management and reservation planning. Similarly, differing Use Years may complicate your vacation planning, but individual heirs may have differing preferences that may be accommodated.

Retitling an Existing DVC Contract

Owners who initially titled their contracts individually may later transfer them into a trust through an established retitling process. This process typically includes administrative fees and timing considerations, including potential restrictions related to pending reservations. Advance planning can help minimize disruptions.

Key Takeaways

Because DVC contracts are deeded real property interests, titling decisions directly affect probate exposure, transfer tax planning, creditor protection, and long-term family governance. Revocable trusts often provide flexibility and continuity, while entity ownership may be appropriate for complex shared arrangements.

Before changing title or relying on outdated estate planning documents, DVC owners should review their strategy with our experienced estate planning counselors to ensure their plan protects family interests and supports multigenerational use. Contact a member of Varnum’s Estate Planning Practice Team to discuss today.

U.S. Supreme Court Holds FAAAA Does Not Preempt Negligent-Hiring Claims Against Freight Brokers

6 8 Advisory Supremecourtfaaaa 1200x628

On May 14, 2026, the U.S. Supreme Court issued a unanimous decision in Montgomery v. Caribe Transport II, LLC, No. 24-1238, holding that negligent-hiring claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act (FAAAA). The Court concluded that such claims fall within the FAAAA’s safety exception, which preserves a state’s authority to regulate safety with respect to motor vehicles.

The decision resolves a longstanding split among federal courts and significantly expands potential liability for freight brokers and transportation brokers. Going forward, brokers may face increased exposure to state-law negligence claims arising from their carrier-selection decisions.

FAAAA Preemption and the Freight Broker Safety Exception

Freight brokers play a critical role in the U.S. supply chain, arranging freight shipments between shippers and motor carriers. Congress enacted the FAAAA in 1994 to deregulate certain economic aspects of the trucking industry and included a broad preemption provision prohibiting states from enforcing laws related to a broker’s or motor carrier’s prices, routes, or services.

Congress also included an important limitation on that preemption. The FAAAA’s safety exception provides that the statute does not restrict a state’s safety regulatory authority with respect to motor vehicles.

For years, courts disagreed on whether negligent-hiring claims against freight brokers fell within that exception. The Supreme Court’s decision in Montgomery answers that question and establishes that states may allow plaintiffs to pursue negligent-hiring claims against brokers when injuries allegedly result from the selection of an unsafe motor carrier.

Facts Behind the Supreme Court’s Freight Broker Liability Decision

Plaintiff Shawn Montgomery suffered severe injuries when a truck hauling freight struck his tractor-trailer. The shipment had been arranged by freight broker C.H. Robinson Worldwide, Inc.

Montgomery alleged that C.H. Robinson negligently selected the motor carrier despite the carrier receiving a “conditional” safety rating from the Federal Motor Carrier Safety Administration (FMCSA). According to the complaint, the carrier had documented safety deficiencies involving driver qualifications, hours-of-service compliance, vehicle maintenance, inspections, and crash history.

Montgomery argued that the broker knew or should have known that selecting the carrier created an unreasonable risk of harm to the public.

The district court dismissed the negligent-hiring claim, finding it preempted by the FAAAA, and the U.S. Court of Appeals for the Seventh Circuit affirmed. The Supreme Court reversed.

Supreme Court Rules Freight Brokers Can Be Sued for Negligent Hiring

The Supreme Court unanimously held that negligent-hiring claims against freight brokers fall within the FAAAA’s safety exception and therefore are not preempted.

The Court reasoned that state-law claims requiring brokers to exercise reasonable care when selecting motor carriers directly relate to motor vehicle safety. As a result, those claims constitute an exercise of a state’s safety regulatory authority and may proceed under state law despite the FAAAA’s general preemption provisions.

The decision answers a question that has divided federal courts for years: whether freight brokers can be held liable under state law for negligently selecting unsafe motor carriers. The Court concluded that they can.

Increased Freight Broker Liability and Litigation Risk

The Montgomery decision removes a significant defense that freight brokers have relied upon to obtain early dismissal of negligent-hiring claims.

As a result, brokers should expect an increase in trucking accident litigation naming both motor carriers and freight brokers as defendants. Plaintiffs’ attorneys may seek to expand theories of liability by challenging the adequacy of carrier-selection procedures, safety reviews, and other due diligence efforts.

The ruling may also prompt litigation over whether brokers have ongoing responsibilities to monitor carriers after initial approval and onboarding.

Carrier Selection Practices Will Receive Greater Scrutiny

Because negligent-hiring claims can now proceed under state law, a broker’s carrier-selection and onboarding practices may become central issues in future litigation.

Transportation brokers should consider reviewing and strengthening procedures related to:

  • FMCSA safety ratings and safety records
  • Carrier operating authority and regulatory compliance
  • Insurance verification
  • Crash history and out-of-service rates
  • Driver qualification information
  • Documentation of carrier-selection decisions

Maintaining thorough records of carrier evaluations, safety reviews, and onboarding decisions may become increasingly important when defending against negligent-hiring claims.

Notably, the concurrence suggested that brokers who maintain reasonable carrier-selection policies and conduct meaningful due diligence before tendering loads may be better positioned to defend against negligence allegations.

How Transportation Brokers Should Respond to the Montgomery Decision

The Supreme Court’s decision significantly changes the legal landscape for freight brokers and transportation brokers. The ruling increases potential exposure to negligent-hiring claims and underscores the importance of robust carrier-selection and risk-management practices.

Transportation brokers should evaluate their onboarding procedures, documentation protocols, carrier-vetting standards, and safety review processes to assess potential liability in light of the Court’s decision. Strengthening due diligence procedures and maintaining detailed records may help reduce risk and improve defensibility in future litigation.

For guidance regarding freight broker liability, FAAAA preemption, negligent-hiring claims, transportation broker litigation, or the impact of the Montgomery decision on your operations, contact a member of Varnum’s Litigation Practice Team.

Federal Government Signals Appeal of Order Requiring IEEPA Tariff Refunds

6 1 Advisory Ieppa 1200x628

Update June 3, 2026: The U.S. Department of Justice has formally appealed the Court of International Trade’s universal injunction requiring U.S. Customs and Border Protection to issue IEEPA tariff refunds to all affected importers. The appeal will be heard by the U.S. Court of Appeals for the Federal Circuit and seeks to limit refund relief to importers that have filed their own lawsuits. If the government obtains a stay or ultimately prevails on appeal, importers that have not filed suit could lose their current pathway to recover refunds on liquidated entries.

On May 29, 2026, the federal government notified the court in V.O.S. Selections, Inc. v. United States, Court No. 25-00066, that it intends to appeal the U.S. Court of International Trade’s universal injunction requiring U.S. Customs and Border Protection (CBP) to issue refunds of tariffs imposed under the International Emergency Economic Powers Act (IEEPA).

The appeal could have significant consequences for importers seeking IEEPA tariff refunds, particularly those that have not filed their own lawsuits challenging liquidated tariff payments. If the government obtains a stay or prevails on appeal, importers who have not filed their own lawsuits could lose their pathway to refunds on liquidated entries.

Court of International Trade Ordered IEEPA Tariff Refunds

Several importers filed lawsuits in the Court of International Trade challenging the legality of tariffs imposed under IEEPA. On April 17, 2026, the Court entered an injunction directing IEEPA tariff refunds. The Court later expanded that relief through a universal injunction requiring CBP to reliquidate entries and issue refunds to all affected importers, including companies that had not filed lawsuits.

CBP is currently processing approximately $85 billion in refunds for tariffs on unliquidated entries, representing over half the total IEEPA tariffs paid. According to the agency, refunds are being issued in phases through its CAPE processing system because immediate full compliance is not feasible.

Federal Government Plans Appeal of Universal IEEPA Tariff Refund Order

In its recent filing, the government stated that it “intend[s] to appeal the Court’s universal injunction and to seek a stay of the injunction except as to the particular importer plaintiffs in each case in which the Court has entered the injunction.”

The government argues that the universal injunction exceeds the Court’s jurisdiction and equitable authority under Trump v. CASA, Inc., 606 U.S. 831, 839 (2025).

If the government files the appeal and obtains a stay from the U.S. Court of Appeals for the Federal Circuit, the universal refund order would be paused while the appeal is pending. Critically, the government has indicated the appeal targets only the universal scope of the injunction, relief for the named plaintiffs would remain intact.

What the Appeal Means for Importers Seeking IEEPA Tariff Refunds

The appeal creates the greatest uncertainty for importers that paid IEEPA tariffs but have not filed their own cases.

The universal injunction currently provides a mechanism for those importers to obtain refunds on liquidated entries without pursuing individual litigation. If the Federal Circuit stays the injunction, or ultimately reverses the universal relief order, importers that are not plaintiffs may no longer have access to those refunds.

By contrast, importers that are already parties to pending IEEPA tariff refund lawsuits should continue to benefit from importer-specific relief ordered by the court. This distinction makes the question of whether to file suit increasingly urgent for importers who have not yet done so.

Should Importers File an IEEPA Tariff Refund Lawsuit?

Importers evaluating whether to pursue IEEPA tariff refund claims should be aware that the Court of International Trade has established a streamlined process for new cases.

Under Administrative Order 25-02, new cases challenging tariffs based on IEEPA and the relevant executive orders are automatically stayed upon filing. No order of assignment is issued before entry of the stay, and the Clerk maintains a schedule of all stayed cases. The Court has indicated it expects to determine next steps for these cases following a final, unappealable decision in V.O.S. Selections.

As a result, filing a new IEEPA tariff refund lawsuit generally does not require immediate discovery, motion practice, or hearings. Instead, the primary benefit of filing is preserving the importer’s position while the legality of the tariffs and the scope of available funds continue to be litigated.

For importers who have paid IEEPA tariffs on liquidated entries but have not yet filed suit, initiating a case now may be the most efficient step to preserving refund rights while the appeal proceeds.

Legal Guidance for IEEPA Tariff Refund Claims

Varnum attorneys represent importers pursuing IEEPA tariff refund claims before the Court of International Trade. Businesses with questions regarding IEEPA tariffs, CBP refund procedures, tariff litigation, or potential refund eligibility should contact a member of Varnum’s Litigation Practice Team.

Estate Planning for Winery, Brewery, and Distillery Owners

5 28 Advisory Brewerywinerydistillery 1200x628

Owning a winery, brewery, or distillery is often a labor of love as much as it is a business endeavor. Whether family-owned or a newer venture, estate planning for alcohol beverage businesses must address ownership, licensing compliance, and long-term operational continuity.

Licensing and Regulatory Compliance

Alcohol beverage businesses are heavily regulated at the federal, state, and sometimes local levels. A key estate planning issue is that alcohol licenses are often not automatically transferable upon death or incapacity and may require regulatory approval or reapplication.

Without proper planning, a business may experience operational delays or interruption while licensing authorities review new ownership or management structures. Estate plans should therefore include a strategy to maintain compliance and continuity during transitions.

Business Succession and Operational Control

Succession planning should identify who will:

  • Inherit ownership interests
  • Manage day-to-day operations
  • Oversee licensing and regulatory compliance

Trusts and business entities can help maintain continuity where ownership is divided among beneficiaries or where the beneficiaries are not active operators. It is important to define the relationship between ownership and management control to support continued operations during post-death administration, and governance documents should also address whether the business will remain family-owned, be sold, or transition over time.

Valuation and Transfer of Business Interests

Wineries, breweries, and distilleries often include a mix of real estate, equipment, inventory, intellectual property, and brand goodwill. These businesses may also have significant debt or variable cash flow, making valuation more complex.

A clear valuation strategy is important for estate tax planning, gifting, and ownership transfers. Early planning can support more efficient use of transfer techniques such as trusts or other entity structures where appropriate.

Intellectual Property, Brand Value, and Real Estate

Intellectual property, such as trademarks, trade names, and proprietary recipes, can be a significant component of business value. These assets require careful documentation and ongoing protection.

In addition, many owners seek to preserve agricultural or production land as part of their legacy. Conservation easements and similar tools may be used where consistent with broader estate and business succession goals.

Legacy and Long-Term Planning

Estate planning should reflect the owner’s long-term goals for the business, including whether it should continue operating, be sold, or be wound down over time. These intentions can be incorporated into governing documents to guide future fiduciaries and decision-makers.

Coordinated Planning Approach

Effective estate planning for alcohol beverage businesses requires coordination between estate planning counsel, business advisors, and regulatory counsel to address licensing requirements, tax considerations, and operational continuity.

If you own a winery, brewery, or distillery and would like to discuss estate planning strategies for alcohol beverage businesses, contact a member of our Hospitality and Alcohol Beverage Control Practice Team or a member of the Estate Planning Practice Team.

New USCIS Policy on Adjustment of Status Applications

5 25 Advisory Uscis 1200x628

On May 21, 2026, U.S. Citizenship and Immigration Services (USCIS) issued Policy Memorandum PM-602-0199, significantly shifting how the agency evaluates adjustment of status applications, the process for obtaining a green card while present in the United States.

Key Changes to the Adjustment of Status Process

USCIS now characterizes adjustment of status as an “extraordinary” act of “administrative grace” rather than a routine step in the immigration process, and it directs officers to favor consular processing abroad as the default pathway. This marks a shift from longstanding agency practice.

Officers must consider all relevant factors, including immigration history, visa compliance, moral character, and family ties. Applicants may need to demonstrate “unusual or even outstanding equities” for approval. The memo applies to all pending applications as well as new filings, and USCIS has indicated that additional category-specific guidance may follow.

A USCIS spokesperson recently said that individuals whose roles provide “economic benefit” or are in the “national interest” will likely be permitted to remain in the United States and pursue adjustment of status domestically.

The impact of the memo will vary depending on individual circumstances, including visa category, immigration history, and family situation.

How the USCIS Policy Affects Green Card Applicants

The memo does not change the law or prohibit new Form I-485 filings. However, applicants may see increased Requests for Evidence, Notices of Intent to Deny, and longer processing times. A shift toward consular processing could also extend wait times at U.S. consulates, many of which are already experiencing staffing constraints.

Varnum immigration attorneys are closely monitoring the situation and tracking further guidance from USCIS. As implementation develops, we will review cases to assess the most appropriate path forward, whether through adjustment of status, consular processing, or supplementation of pending applications with additional evidence of favorable equities.

Bonuses, Overtime, and FLSA/OBBBA Compliance

5 26 Advisory Bonusesovertimeflsa 1200x628

Varnum recently hosted a webinar addressing employee bonuses, overtime calculations, Fair Labor Standards Act (FLSA) compliance, and new reporting obligations under the One Big Beautiful Bill Act (OBBBA). The program provided practical guidance for HR professionals, payroll administrators, and employers managing wage and hour compliance obligations in 2026 and beyond.

Below are key takeaways regarding overtime pay requirements, nondiscretionary bonuses, and OBBBA reporting obligations.

Why Bonus and Overtime Compliance Matters

Many employers use bonuses to support employee retention, productivity, and performance goals. However, under the FLSA, certain bonuses must be included in an employee’s regular rate of pay when calculating overtime compensation.

At the same time, the OBBBA introduces new payroll reporting requirements related to qualified overtime compensation and qualified tips for tax years 2025 through 2028. Employers should review payroll systems and compensation practices now to reduce compliance risks.

FLSA Overtime Rules and the Regular Rate of Pay

The FLSA requires nonexempt employees to receive overtime pay at one and one-half times their regular rate of pay for hours worked over 40 in a workweek. A workweek is typically a fixed and recurring period of 168 hours. Compensable time may include work performed at home, travel time, waiting time, training, and probationary periods.

The regular rate of pay is not always the same as an employee’s hourly wage. Under the FLSA, the regular rate generally includes most forms of compensation and is calculated by dividing total included compensation by the total hours worked during the workweek.

Because the regular rate affects overtime calculations, employers should carefully evaluate whether bonuses and incentive payments must be included.

Discretionary vs. Nondiscretionary Bonuses

Whether a bonus must be included in the regular rate calculation depends on whether it is discretionary or nondiscretionary.

Discretionary Bonuses

Discretionary bonuses, where the employer retains genuine discretion over both the fact and amount of payment, are excluded from the regular rate. Examples include employee-of-the-month awards, severance bonuses, and bonuses for extraordinary efforts not tied to pre-established criteria.

Nondiscretionary Bonuses

Nondiscretionary bonuses generally must be included in overtime calculations because they are tied to measurable expectations or communicated in advance to employees. Common examples include production, attendance, quality, and safety bonuses.

The Department of Labor considers bonuses nondiscretionary when they are intended to encourage employees to work more steadily, rapidly or efficiently, or to remain employed.

Labels alone are not determinative. A bonus described as “discretionary” may still qualify as nondiscretionary if employees expect payment based on established criteria, prior practice, or other communications from the employer.

How Bonuses Affect Overtime Calculations

When a nondiscretionary bonus applies to a single workweek, the employer must include the bonus in the employee’s regular rate calculation for that week to determine whether additional overtime compensation is owed.

More complex issues arise when bonuses cover multiple workweeks, such as quarterly or annual bonuses. In those situations, the bonus generally must be allocated across the workweeks in which it was earned using a reasonable and equitable method. Employers may then owe additional overtime compensation for weeks in which overtime was worked.

If overtime is paid before the final bonus amount is known, the employer may initially calculate overtime without the bonus. Once the bonus amount is finalized, however, the employer must recalculate overtime and issue any additional overtime pay owed.

Employers cannot avoid overtime obligations simply because a bonus is paid later.

OBBBA Reporting Requirements

The OBBBA created new federal tax deductions for qualified overtime compensation and qualified tips for tax years 2025 through 2028.

The updated 2026 Form W-2 includes new Box 12 reporting instructions related to these deductions. Employers should confirm payroll systems are configured to separately track and report qualifying compensation.

Qualified overtime compensation does not include all overtime pay. In general, it includes only the premium half-time portion required under Section 7 of the Fair Labor Standards Act for hours worked over 40 in a workweek.

Qualified overtime compensation generally does not include:

  • Overtime paid under collective bargaining agreements
  • Overtime required solely by employer policy
  • Contract-based overtime arrangements
  • Overtime paid under more generous state or local standards

Employers with Michigan employees should review Michigan House Bill 4961, a recent law which applies a similar “no tax on overtime and tips” concept to Michigan state income tax for tax years 2026 through 2028.

Common Wage and Hour Compliance Mistakes

HR and payroll teams should remain alert to several common FLSA compliance risks, including:

  • Excluding nondiscretionary bonuses from overtime calculations
  • Failing to recalculate overtime after deferred bonus payments
  • Misclassifying all overtime pay as qualified overtime compensation under the OBBBA
  • Failing to coordinate among HR, payroll, finance, and legal teams
  • Relying on bonus labels instead of analyzing actual payment structure and employee expectations

Next Steps for Employers

Employers should review bonus structures, overtime calculation procedures, and payroll reporting systems to confirm compliance with the FLSA and OBBBA requirements.

For questions regarding overtime compliance, bonus structures, or OBBBA reporting obligations, please contact a member of Varnum’s Labor and Employment Practice Team.

Understanding Certified Questions Before the Michigan Supreme Court

5 6 News Youngdahlcontributestomiappellatesocial Linkedin 1200x628

This advisory summarizes an article by Neil Youngdahl, originally published in the Michigan Appellate Practice Journal. To read the full article, please visit the Michigan Appellate Practice Journal Spring 2026.

Lawsuits filed outside of Michigan can sometimes raise complex and unresolved questions of Michigan law. Rather than attempting to predict how the Michigan Supreme Court would rule on an issue of first impression, federal courts, tribal courts, and appellate courts from other states may certify a legal question directly to the Michigan Supreme Court for guidance.

Under Michigan Court Rule 7.308(A)(2)(a), a court may certify a question when Michigan law could resolve the issue, and there is no controlling Michigan Supreme Court precedent. The Michigan Supreme Court then has discretion to either answer the certified question or decline to answer it under MCR 7.308(A)(5).

Although certified questions are an important procedural tool for resolving unsettled issues of Michigan law, they remain relatively uncommon before the Michigan Supreme Court.

What Is a Certified Question in Michigan?

A certified question is a procedural mechanism that allows a non-Michigan court to request an authoritative interpretation of Michigan law from the Michigan Supreme Court. Certification is most often used when:

  • A federal court is deciding a case involving Michigan law
  • There is no controlling Michigan Supreme Court precedent
  • The legal issue is outcome-determinative
  • Existing Michigan case law appears unsettled or unclear

The certification process helps promote consistency in the interpretation of Michigan law and reduces the likelihood that federal courts will incorrectly predict how Michigan courts would rule on a legal issue.

Michigan Court Rule 7.308 and Certified Questions

Michigan Court Rule 7.308 governs certified questions presented to the Michigan Supreme Court. The rule provides that certification may occur when a federal court, tribal court, or another state’s appellate court encounters a question of Michigan law that lacks controlling precedent.

Unlike applications for leave to appeal, however, the Michigan Court Rules provide very little guidance regarding when the Michigan Supreme Court should accept or answer a certified question. The absence of formal criteria has contributed to uncertainty surrounding the certification process.

How Often Does the Michigan Supreme Court Answer Certified Questions?

Certified questions are relatively rare in Michigan appellate practice. Since 2000, the Michigan Supreme Court has received approximately 19 certified questions and answered only eight of them.

Although the answer rate is significantly higher than the Court’s typical grant rate for leave-to-appeal applications, the statistics still show that the Court frequently declines certification requests.

Between 2007 and 2016, the Michigan Supreme Court answered five out of six certified questions, making that period one of the most active eras for certified-question jurisprudence in Michigan. More recently, however, the Court has declined several certified questions in a row, signaling a more restrictive approach.

The Court last answered a certified question in October 2020 during litigation involving the Governor’s emergency powers and the COVID-19 pandemic.

Why Certified Questions Matter in Michigan Litigation

Certified questions can play a significant role in complex litigation involving unsettled issues of state law. They allow federal courts and other jurisdictions to obtain authoritative guidance directly from the Michigan Supreme Court instead of relying on predictions about how Michigan law may evolve.

Supporters of certification argue that the process:

  • Preserves Michigan’s authority to interpret Michigan law
  • Promotes uniformity in legal decisions
  • Strengthens principles of federalism and judicial comity
  • Reduces inconsistent interpretations between state and federal courts

Beaubien v. Trivedi and the Future of Certified Questions

The Michigan Supreme Court recently revisited the certified-question process in Beaubien v. Trivedi, a case involving the constitutionality of Michigan’s noneconomic damages cap in medical malpractice litigation under MCL 600.1483.

The United States District Court for the Eastern District of Michigan certified the constitutional question after concluding that prior Michigan Supreme Court precedent appeared to conflict with later appellate decisions and evolving constitutional analysis.

The Michigan Supreme Court declined to answer the certified question.

Chief Justice Megan Cavanagh’s Concurring Opinion

In a concurring opinion, Chief Justice Megan Cavanagh emphasized that the certified-question process is intended to resolve genuinely unsettled questions of Michigan law, not to revisit issues already decided by the Michigan Supreme Court.

Chief Justice Cavanagh explained that prior Michigan Supreme Court decisions upholding the constitutionality of Michigan’s medical malpractice damages cap remained controlling precedent, regardless of ongoing criticism or disagreement.

She also noted that the Michigan Court of Appeals had repeatedly rejected the same constitutional arguments raised in Beaubien.

The Role of Michigan Court of Appeals Decisions in Certification

One of the most notable aspects of Chief Justice Cavanagh’s concurrence was her discussion of the Michigan Court of Appeals’ role in determining whether certification is appropriate.

Although only Michigan Supreme Court decisions constitute binding precedent under MCR 7.308, Chief Justice Cavanagh suggested that consistent Court of Appeals decisions interpreting Supreme Court precedent may still demonstrate that Michigan law is sufficiently settled to make certification unnecessary.

This reasoning could influence how federal courts evaluate future requests for certified questions involving Michigan law.

Key Takeaways on Certified Questions in Michigan

Certified questions remain an important but infrequently used component of Michigan appellate practice. While the procedure allows federal and out-of-state courts to seek guidance on unresolved questions of Michigan law, the Michigan Supreme Court continues to exercise significant discretion in deciding whether to answer those questions.

Recent opinions, including Chief Justice Cavanagh’s concurrence in Beaubien v. Trivedi, suggest that the Court may view certification as a narrow tool intended to clarify unsettled law rather than reopen established precedent.

As a result, litigants considering certification should carefully evaluate whether a legal issue is truly unresolved under existing Michigan Supreme Court and Michigan Court of Appeals authority before seeking review.

Estate Planning for Patent Holders

5 14 Advisory Estateplanningforpatentholders 1200x628

For inventors, engineers, entrepreneurs, and business owners, patents are often among the most valuable assets. In addition to their financial value, patents may represent years of innovation, technical development, and personal legacy. Effective estate planning for patent holders should address how intellectual property assets will be maintained, managed, transferred, and monetized over time.

Understanding Patent Assets in Estate Planning

Patents are time-sensitive intellectual property assets with strict legal and administrative requirements. In the United States, the two primary categories of patents are:

  • Utility patents, which protect how an invention is structured, functions, or is used
  • Design patents, which protect the ornamental appearance or visual design of a product

Utility patents generally remain in effect for up to 20 years from their earliest effective filing date, while design patents last 15 years from issuance. Utility patents also require regular maintenance fees to remain in force. Missing these deadlines can result in the loss of patent rights and a significant reduction in estate value.

For patent owners with international intellectual property portfolios, estate planning should also account for foreign patent registrations, renewal deadlines, and jurisdiction-specific filing requirements.

Organizing Patent Documentation and Ownership Records

Estate planning documents should clearly identify all patents, pending patent applications, licensing agreements, royalty streams, and joint ownership arrangements. Pending applications may also hold significant business value and should not be overlooked during planning.

If a patent is co-owned, the estate plan should address how shared control, decision-making, or potential buyout rights may continue after death. If a patent is licensed, whether exclusively or non-exclusively, those agreements should be reviewed to determine whether they continue after death and how related income will be handled.

Planning for Business-Owned Patents

Some inventors hold patents personally, while others assign them to a business entity. If the patents are owned by a company, but the estate includes ownership interests in that business, the plan should account for how control of both the company and the underlying intellectual property will transfer.

It is also important to confirm that ownership records and prior patent assignments are properly documented to avoid disputes or complications during estate administration. In situations where patents are valuable but not actively commercialized, a fiduciary, trust beneficiaries, or heirs may eventually decide to sell or license the rights, which may require guidance from experienced legal and tax professionals.

Preserving an Inventor’s Legacy

Estate planning for patent holders may also involve personal considerations. Many inventors feel a strong connection to their innovations and want to help shape how those inventions are used in the future. Even if those preferences are not legally binding, they can often be expressed through trust provisions or written guidance to fiduciaries.

Working With Estate Planning and Intellectual Property Counsel

As with other complex intellectual property assets, involving experienced legal and tax professionals is important when structuring trusts, business entities, or licensing arrangements involving patent rights. Careful planning can help avoid unintended income or estate tax consequences while preserving the long-term value of intellectual property.

For assistance planning for patents and other intellectual property, contact your Varnum attorney or a member of Varnum’s Estate Planning or Intellectual Property Practice Teams.