What does it mean to leave a legacy? While many think of estate planning as just Wills and Trusts for after we pass away, a truly comprehensive plan is about your values and the mark you leave on the world during your life. Recently, Michigan took a monumental step in supporting residents who choose to leave a profound legacy: the gift of life.
Starting with the 2025 tax year, Michigan has enacted a new law allowing living organ donors to claim a $10,000 tax credit. This bipartisan legislation is a massive victory for healthcare and Michigan families, but it also carries significant implications for your estate and incapacity planning.
Understanding Michigan’s New Living Donor Tax Credit
Michiganders who become living organ donors—such as those donating a kidney or a portion of their liver—no longer have to shoulder the heavy financial burden of the recovery process. While it is illegal to buy or sell organs, donors often face significant out-of-pocket costs.
The new law offers a tax credit for expenses incurred on or after January 1, 2025, including:
- Lost wages during hospital stays and home recovery.
- Travel and transportation to and from transplant centers.
- Hotel and lodging for the donor and their support system.
- Childcare costs incurred during hospitalization and recovery.
To claim this on line 20 of your Michigan 1040 form, you must save your receipts and coordinate with the transplant center to receive a certification letter.
Why Living Donors Need Up-to-Date Incapacity Documents
If you are considering becoming a living donor, it is critical that your estate planning documents are in order before entering the operating room. You need robust incapacity planning to protect yourself during and after surgery:
1. Medical Power of Attorney (Patient Advocate Designation)
Major surgery requiring general anesthesia carries inherent risks. You must legally designate a trusted person to make medical decisions if an unexpected complication prevents you from speaking for yourself.
2. Living Will (Advance Directive)
This document outlines your wishes regarding life-prolonging treatments and is the primary space to state your preferences regarding deceased organ and tissue donation.
3. Financial Power of Attorney
While you are recovering for several weeks, a durable financial power of attorney ensures a trusted agent can pay your bills and manage your day-to-day finances while you focus on healing.
Securing Your Foundation: Wills and Trusts
While powers of attorney handle immediate needs, a comprehensive plan requires a solid foundation for your assets and family.
- The Role of a Last Will and Testament: A Will ensures your assets are distributed according to your wishes rather than Michigan’s default laws. Most importantly, it is the only legal document where you can nominate a guardian for your minor children.
- The Power of a Revocable Living Trust: A Trust offers higher protection for incapacity. If complications arise, a successor trustee can manage your assets without court intervention, and your family can avoid the public probate process entirely.
A Reminder for Deceased Organ Donation
Even if you are not currently in a position to be a living donor, this new Michigan law serves as an excellent reminder to address your broader organ donation wishes. Ensuring your family and your Patient Advocate are legally bound to your desires prevents confusion, guilt, and family disputes during highly emotional times.
Protect Your Legacy: Schedule Your Consultation Today
Whether you are preparing for an organ donation or simply need to get your affairs in order, our dedicated legal team is here to guide you. We believe estate planning is about empowering you to live your best life today.
Don’t leave your family’s financial future or your healthcare wishes to chance. The process starts with a simple intake and consultation meeting. When you choose to build your plan with us, your intake meeting fee is completely rolled into the total cost of your plan.
