From previous disputes here in Michigan, you can trim back to the property line AS LONG AS IT DOES NOT ENDANGER THE LIFE OF THE TREE. If a limb (or whole tree) falls on your neighbor's house, it's HIS responsibility (i.e. he files the claim with HIS insurance company). Just had this happen last fall. Tree on my property got hit by lightning, fell on neighbor's house. Both insurance companies came out. Mine paid for cost of cleanup on MY property. HIS insurance company paid for cleanup on his property.
If your neighbor thinks a limb is a danger to his property, tell him to deal with it and walk back into your house. I've dealt with a-hole neighbors by putting them on "Ignore".
And, as I said, that's the way I understand it's handled in Michigan. And even if there's a law on the books regarding it in your State, there's no guarantee that a judge will follow the law when rendering a decision. He/she could go back into their chambers and flip a coin for all you know. That's why there are Appeals Courts and I doubt that it would be practical to appeal a decision over a "tree". As others said, removing the tree is the cheapest option. And if you're worried about the half/half tree, get him to sign a document stating that he will not hold you responsible if you cut the tree. If he won't sign a document, have someone videotape you TELLING him what you're going to do and asking if he has any objections. Might not be worth anything in court, but at least he'll know you're being up front and legally cautious with him.
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