When individuals in Michigan and elsewhere draft an estate plan, they are taking the time to memorialize their wishes in writing. These wishes can detail what happens to their assets and property after they pass, medical directives if they are deemed incompetent, authorization for an individual to make medical and financial decisions and a wide range of trusts. While certain steps, such as setting up a trust, could help one avoid probate, it is commonly used to distribute the assets of a decedent.
Michigan probate laws
Regardless if a valid will is present at the time of a person’s death, the probate process will be used to ensure that property is distributed according to the will, or if there is no will or a will is invalidated, distributing assets as state law dictates.
When the probate process occurs in the state of Michigan, there are four steps involved. The first is appointing a personal representative. The next is to assemble all the assets of the decedent. The third step is to pay any bills, including funeral expenses, creditors, taxes and any expenses related to the estate administration.
Assets that will and won’t go through probate
The probate process is only necessary when a decedent leaves behind property in his or her name or has rights to receive property. This commonly includes houses or real property titled only in the decedent’s name. Other property that needs to go through property includes personal bank accounts with no co-owner or designated beneficiary, real estate that is co-owned as tenants in common, stocks and bonds in the decedent’s name, tangible property and motor vehicles registered in only the decedents name.
Property that will not go through probate includes property in a revocable trust, real estate owned as joint tenants with a right of survivorship, life insurance policies and retirement accounts with a designated beneficiary and bank accounts with payable on death or transfer on death. Other property includes cash up to $500, motor vehicles if the value doesn’t exceed $60,000 and there is not probate proceeding, watercrafts if the value doesn’t exceed $100,000 and there is no probate proceedings, income tax refunds and personal property not exceeding $15,000.
The probate process may be confusing for those drafting an estate plan and for those going through the process. If any issues arise in the probate process, or even if no issues occur, it is important that the process moves along as smoothly as possible, ensuring all legal rights and obligations are met and protected.