Michigan Probate Process
The Guide To The Michigan Probate Process And How To Navigate It
When a person passes away in Michigan, their remaining debts need to be paid and their remaining money and property needs to be distributed to their loved ones they left behind. If the person who died did not have the proper Estate Planning documents in place, their estate will need to go through the Michigan Probate process.
What Is The Michigan Probate Process?
The Michigan Probate process is the public court process that ensures your debts are paid, and your money and property are distributed to your loved ones after you die. This is sometimes referred to as Probate Administration or Estate Administration.
What Is An Estate?
An estate consists of what a person owned when they died. Typically, this includes money, property, and debt. Those who are entitled to the estate are known as “heirs” or “beneficiaries”.
When Is The Probate Process In Michigan Necessary?
There are four common scenarios that require the Probate Process in Michigan:
- The decedent passed away without a Will
- The decedent had a Will, but not a Living Trust
- The decedent had a Living Trust, but did not properly fund it
- There are people contesting the estate
What Does Probate In Michigan Involve?
Probate in Michigan involves:
Appointing a Personal Representative
If a Personal Representative was not named in the Will, one will be appointed by the Probate Court.
An Inventory of the Assets
The Personal Representative must catalog all of the decedent’s property and money so it can be distributed to the beneficiaries.
Any debt and taxes must be paid to creditors after death.
Distributing the estate
After all debt and taxes have been paid, the remainder of the estate will be distributed according to the Will. If there is no Will, then it will be distributed according to Michigan Probate Law.
What Assets Have To Go Through The Michigan Probate Process?
The Michigan Probate process is necessary when the decedent passes away and owns property or assets solely in their name. If the decedent had joint ownership over certain assets, typically it may be transferred to the other owner with no, or little court involvement.
What assets DO NOT have to go through the Michigan Probate Process?
Some assets do not have to go through Probate in Michigan. A few examples of these assets are:
- Cash $500 or less
- Personal property $15,000 or less
- Motor vehicles less than $60,000 in value
- Watercrafts less than $100,000 in value
- Insurance policies and retirement accounts with a beneficiary listed
- Property held in a Trust
- Property or land held jointly with rights of survivorship
- Bank accounts with a transfer on death or pay on death clause
Will Banks Release Money Without Going Through Probate In Michigan?
Typically, most banks and financial institutions will not release your loved one’s money without obtaining Letters of Authority. Though, this situation depends on how much money is in the bank account.
In some cases, if there is less than $24,000 in the bank account, you may be able to open a small estate with the Probate Court. This process is generally faster and less time consuming.
If the bank account listed a pay on death, or transfer on death clause, then the bank account will typically avoid the Michigan Probate process.
What Is A Letter Of Authority In Michigan?
A Letter of Authority is a document signed by the Probate Court Register. The Letter of Authority lists the person who is appointed as Personal Representative of the Estate. Typically, Letters of Authority are needed in order to access a decedent’s bank accounts.
How Do You Get Letters Of Authority In The Michigan Probate Process?
To obtain a Letter of Authority, you must open a Probate Estate in the county where the decedent lived and commence an informal or formal Probate proceeding. The court will appoint a Personal Representative and issue the Letter of Authority. Obtaining the Letters of Authority is a tricky step in the Michigan Probate process. In most cases, it is best to consult with an experienced Michigan Probate Lawyer.
What Is A Personal Representative?
The Personal Representative is appointed by the Probate Court and is responsible for managing and distributing the property and belongings of the estate.
What Power Does The Personal Representative Have Throughout the Michigan Probate Process?
The Personal Representative is generally able to control and manage all money, property, and assets owned by the estate. They must follow specific rules, as well as any instructions left in the decedent’s Will. The Personal Representative is able to manage the Estate’s assets, which is why financial institutions request a Letter of Authority showing that they’re dealing with the person who is legally allowed to represent the Estate.
What Are The Responsibilities Of A Personal Representative?
The Personal Representative is responsible for many aspects of the estate. Their responsibilities include:
- Gathering the estate’s assets and preparing the inventory
- Maintaining the estate checking account
- Preparing the accounting
- Preparing the income tax returns
- Paying the federal estate tax
Who Can Be Appointed Personal Representative?
A Personal Representative will be appointed by the probate court based on Michigan Probate Law in the following order:
- A person named as Personal Representative in the decedent’s Will
- A surviving spouse if they are a beneficiary under the Will
- Other beneficiaries of the Will
- The surviving spouse if they are not a beneficiary under the Will
- Other heirs of the decedent
- A person chosen by a creditor may be named by a probate judge if no one else is named after a certain amount of time
How Much Does An Estate Have To Be Worth To Go Through The Michigan Probate Process?
The Michigan Probate process depends on the value of the estate.
In most cases, an estate larger than $24,000 is more complex, time consuming, and expensive.
This is because larger estates have a more in depth probate proceeding and generally take longer to complete.
If an estate is less than $24,000, there’s an alternative proceeding which is much simpler and less expensive. This type of Probate is referred to as a “small estate”.
In a small estate, a Personal Representative may immediately distribute the entire estate and file a closing statement without notifying creditors.
What Is The Michigan Probate Process When A Person Dies Without A Will In Michigan?
In Michigan, if you die without a Will, your estate is referred to as “intestate” and is administered according to Michigan intestacy laws. In other words, who will receive your money and property will be left in the hands of the court which is less than ideal for many families.
For example, if you die without a Will or more robust Estate Plan, a long lost family member could possibly receive your money and property, and your loved ones could be completely left with nothing.
Is A Will Enough To Avoid The Probate Process In Michigan?
No, a Will does not avoid the Probate process in Michigan. It’s actually your ticket to Probate, and it tells the court who should manage your estate, and who should receive your money and property after death. When you pass away, your Will is filed with the Probate Court in the county where you lived or owned real estate.
How Do You Avoid The Michigan Probate Process?
Avoiding Probate in Michigan requires a more robust Estate Plan, like a Living Trust.
A Living Trust is a private document that places your assets, such as bank accounts, real estate, and valuable personal property, in trust during your lifetime, and states how you would like things to be distributed upon your death.
If you properly fund your Trust, your family will be saved from the excruciating Probate process.
There are also some other benefits of a Trust such as reducing death taxes, maintaining family privacy, making sure beneficiaries attend college before receiving an inheritance, and protecting your family from creditors.
What Happens If A Decedent Owns Property Outside Of Michigan?
If your loved one owns property outside of their state of residence, you will need to open an Ancillary Probate.
For example, if your loved one lived in Michigan and owned a home in Georgia when they passed away, you will need to open an Ancillary Probate.
What Are The Different Types Of Probate In Michigan?
Formal Probate takes place in front of a judge and is typically if an estate is very large and complex, or if there is a disagreement regarding the Will.
Informal Probate takes place in front of the Probate register instead of in front of a judge. However, this does not mean that it is any less difficult or complicated than Formal Probate. Rather, it just requires less formal oversight by the court.
Probate for Small Estates may take place if the estate is worth less than $24,000. This process is much simpler and less time consuming.
How Do You Begin The Michigan Probate Process?
The Michigan Probate process begins by filing a petition in the county Probate court where the decedent was residing at the time of their death.
How Long Does It Take To Complete The Probate Process In Michigan?
The timeline for the Probate process in Michigan varies from case to case. At a minimum, it takes 5 months, but it generally takes six months to one year to complete. Contested cases can take much longer.
How Much Does The Michigan Probate Process Cost?
How much Probate costs in Michigan varies depending on the situation. Below are five factors that influence the cost of Probate in Michigan:
- How much the estate was worth
- What type of Probate is required
- If the decedent opened any property outside of Michigan
- If the Will is contested
- How long the Probate lasts
Each situation is different, so it is best to consult with a Michigan Probate Lawyer to get an accurate quote.
Do I Need A Probate Lawyer To Help Me With The Michigan Probate Process?
If you need to go through the Michigan Probate Process, it is recommended that you work with an experienced Michigan Probate Lawyer.
The Probate process in Michigan can be complicated, long, and confusing.
At Rochester Law Center, our compassionate and dedicated Michigan Probate Lawyers are experienced in all matters of Probate Administration and serve every county in the state of Michigan.
We make Probate fast, easy, and stress free by acting as your guide through the complicated paperwork and legal proceedings you’ll undoubtedly be facing throughout the Michigan probate process.
We understand the intricacies and nuances involved with Probating an Estate and can help you navigate every step of the way while keeping costs as low as possible.
Call us today at (248) 613-0007 for a free case evaluation.