Year End Legal Checkup: Key Actions Michigan Families and Businesses Should Take Before 2026
As 2025 comes to a close, both families and business owners in Michigan face important legal and financial deadlines that can significantly impact risk, taxes, compliance, and long term planning. Several new Michigan laws, especially in employment and business compliance, are already in effect, and year end is also the ideal time to update personal estate plans and family financial protections.
To help clients prepare, we have outlined essential steps every Michigan household and business should consider completing before the end of the year.
Key Developments
1. Michigan Employment Law Compliance Deadlines for Business Owners
Michigan’s updated employment laws, including the Earned Sick Time Act (ESTA), new record keeping rules, and minimum wage increases, are now fully active. Year end is the right time for employers to audit internal documentation and ensure compliance.
What Businesses Should Do Now:
- Update employee handbooks and policies to align with ESTA accrual, usage, and anti-retaliation rules.
- Confirm payroll systems are correctly tracking hours worked, sick time accrued, and sick time used.
- Review minimum wage and tipped wage increases set for January 1, 2026.
- Train managers on approval procedures and documentation requirements.
- Update new hire packets with required notices and sick leave summaries.
2. Business Year End Planning:
Contracts, Records, and Tax Strategy
Year end is often the best moment for corporations, LLCs, and partnerships to ensure their business structure and contracts still match their goals. Proactive updates help minimize legal exposure and improve tax efficiency heading into the new year.
Recommended Business Actions:
- Conduct an annual review of operating agreements, shareholder agreements, and buy-sell provisions.
- Ensure annual meeting minutes and corporate records are properly maintained.
- Revisit independent contractor agreements, employment contracts, and vendor contracts to confirm compliance with recent legal changes.
- Review tax classifications, distributions, and compensation arrangements before closing the books for 2025.
- Evaluate whether 2026 restructuring, such as a new entity, merger, or dissolution, should be planned now.
3. Estate Planning: A Critical Year End Review for Families
Estate planning documents should be reviewed annually to account for major changes in the law, finances, or family structure. If you have welcomed a child, bought a home, changed jobs, or started a business in the last year, updating your estate plan is essential. Year end is a perfect moment to confirm your plan still reflects your wishes.
Every Michigan family should review:
- Wills and trusts to ensure beneficiaries, trustees, and guardians are current.
- Powers of attorney and healthcare powers of attorney, which should be updated every few years to avoid banks or hospitals rejecting outdated documents.
- Trust funding, to confirm that homes, bank accounts, and business interests are properly titled in the trust.
- Life-insurance policies and beneficiary designations.
- Charitable giving or end-of-year tax strategies.
4. Coordinated Planning for Business Owners With Families
For clients who own a business, personal and business planning overlap. Year end is the ideal time to evaluate:
- Whether successor trustees or powers of attorney have authority to manage the business if you become incapacitated.
- Whether buy-sell agreements align with your trust or estate plan.
- Whether key person insurance, disability coverage, or business continuity plans need updating.
- Whether membership interests or shares must be retitled into a trust to avoid probate.
Why These Steps Matter
- Avoid penalties and claims under Michigan’s updated employment laws
- Strengthen legal protections for your business
- Prevent probate complications and ensure your estate plan functions as intended
- Lower your family’s financial and legal risks
- Improve tax outcomes for both individuals and businesses
- Position your company for a smoother and more compliant start to 2026
Recommended Actions
Before December 31, employers should audit their handbooks, update policies, and verify that payroll practices comply with Michigan’s 2025 employment law requirements. Families are advised to review and update their wills, trusts, powers of attorney, and beneficiary designations to ensure their plans are current. Business owners should complete corporate records, review contracts, and coordinate estate planning documents with business succession plans to safeguard the future of their enterprises.
At Daudi & Kroll, we help Michigan employers and families navigate these changes with confidence. For guidance or a consultation, call us at (734) 351-5578.
Adil Daudi, Partner at Daudi & Kroll, P.C., serves as a trusted advisor specializing in employment law and complex corporate transactions. His expertise includes structuring and negotiating buy/sell agreements, real estate transactions, corporate restructuring strategies and providing guidance on employment law compliance. Adil also provides strategic counsel on estate planning, Shariah-compliant estate solutions, and corporate formation. He can be contacted for any questions related to this article or other areas of law at [email protected] or (734) 351-5578.
Disclaimer: This article is intended to provide general information and does not constitute legal advice. Please consult with an attorney for advice regarding your specific situation.
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