What’s the difference between an heir and a devisee? Do you know what it means to be the beneficiary of a trust? Whether you are getting started with estate planning or facing the legal aftermath following a loved one’s passing, you’re sure to encounter many unfamiliar terms and concepts along the way.
One area where there is often some confusion? In Michigan, you may come across a few different terms to refer to people who inherit or receive property from a deceased person — including heir, devisee, and beneficiary.
While they may have some overlap depending on the unique circumstances of your situation, these three categories refer to three different ways that someone may receive property from a decedent:
- “Heir” generally refers to a person who is entitled to receive the decedent’s property under the statutes of intestate succession, the distribution process that occurs when someone passes away without a will.
- A “devisee” is any person designated to receive real or personal property in a decedent’s will.
- “Beneficiary” is a broad term, and may refer to a person who receives property from a trust, or anyone who receives the proceeds of an insurance or annuity policy, pension, financial account, or security with a designated “transfer on death” or “pay on death” beneficiary. This generic term also encompasses devisees, as well as donees, appointees, and any person “in whose favor a power of attorney or power held in an individual, fiduciary, or representative capacity is exercised.”
Let’s explore each of these important concepts in a bit more depth, and examine how they may come into play during estate estate planning and administration:
Heirs
Broadly speaking, an heir is going to be related to the decedent through blood, marriage, or adoption.
An heir is anyone who would stand to inherit from the estate of the decedent if they were to pass away without a valid or complete will. In such a situation, Michigan’s statutes for intestate succession apply.
Under Michigan law, there is a particular order of succession by which heirs stand to inherit when an individual dies intestate — as well as guidelines for how much each party might ultimately receive from the decedent’s estate.
Generally speaking, Michigan law gives highest priority to the surviving spouse of the decedent, followed by their children and grandchildren; then their parents, siblings, nieces and nephews; and then more distant relatives. If the decedent is not survived by any heirs, then the contents of the estate will ultimately pass to the state.
The rules for intestate succession are complex, and the process can be long and difficult — particularly if there needs to be a determination of heirs. A probate attorney can help you understand the nuances of intestate succession, and how Michigan statutes may apply in your circumstances.
Want to control the distribution of your assets and streamline things for your loved ones down the line? Whatever stage of life you’re currently experiencing, an experienced estate planning attorney can help you take action to maintain control. Setting down a plan for your most important assets can help ensure that they will be distributed in a manner appropriate for your circumstances, while minimizing the risk for disagreements and confusion among family members after you’re gone.
Devisees
A “devisee” means a person designated in a will to receive a devise, which is defined as “a testamentary disposition of real or personal property.”
Whereas heirs will always be family to the deceased, anyone named in a decedent’s will is considered a devisee — including friends, co-workers, and so on.
A will is a powerful way to help you maintain control, even when you’re gone. For example? Let’s say Pat is unmarried and has no children, but has two siblings, Alex and Sam. Pat is close with Alex, but broke off contact with Sam decades ago due to a bitter personal conflict. Under the statutes of intestate succession, Alex and Sam would both receive an equal amount of Pat’s estate. A properly executed will can help Pat ensure that Alex receives a larger share, in line with her wishes, while disinheriting Sam.
In addition, a will can help assure that someone you can rely on is appointed to handle your assets and affairs, while also ensuring that your children will have a guardian of your choosing if you are unable to raise them. Along with other estate planning mechanisms, a will is also a way to help make sure that your partner has the assets and control you want them to have.
Keep in mind that a will is subject to jurisdiction by the probate court, and a will, if there is one, must be admitted to court for estate administration to begin. A will can be contested by any interested person — including, but not limited to, an heir, a devisee named in the will, a spouse, or a child of the decedent. Grounds for contesting a will include undue influence, fraud, incapacity, improper execution, or forgery.
If you are facing the possibility of having to defend or contest a will in the Michigan probate courts, it’s important to bring on an experienced legal professional, who can help you understand your options and aggressively advocate for your position in any contested probate matter.
Beneficiaries
“Beneficiary” is a very broad and general term. While it can be used to refer to any devisee or distributee, there are a few circumstances where “beneficiary” takes on a more significant and unique meaning — particularly in relation to nonprobate assets, such as trusts and beneficiary designations.
Probate assets are those that are included as part of the decedent’s estate, subject to court proceedings when he or she dies. Most typically, this refers to property and assets that are owned solely by the decedent, without any co-owners or designated beneficiaries. Nonprobate assets are those that experience a nontestamentary transfer on death. Most commonly, this category includes assets with a co-owner who is legally entitled to the property; assets with a beneficiary or payable-on-death designation; and assets held in a revocable living trust.
Assets with that are set up with a designated beneficiary — typically known as a “pay on death” (POD) or “transfer on death” (TOD) beneficiary — are transferred directly to the named beneficiary (or beneficiaries) upon the death of the account owner or policy holder, outside of probate. Common examples of assets with beneficiary designations include retirement accounts, life insurance policies, bank accounts, investment accounts, pension plans, and other securities.
A trust beneficiary is a person who has a present or future beneficial interest in a trust, vested or contingent. A person may also be considered a trust beneficiary if they hold “power of appointment” over trust property in a capacity other than as trustee or trust director.
Trusts and beneficiary designations are important components of the estate planning process to keep in mind. There are many different types of trusts that can be utilized to help you meet your goals. Consulting with an experienced estate planning attorney about trusts, beneficiary designations, and other types of nonprobate transfers can help you to maximize the assets available to your beneficiaries when you have passed, minimize or eliminate the cost of probate fees, allow for immediate distribution of your assets, and help ensure that inheritance does not become a detriment to your beneficiaries.
Like wills, trusts and beneficiary designations can be contested, under certain circumstances. For example, an interested party can pursue litigation in order to terminate, modify, or reform a trust, or dispute the actions of a trustee.
If you are facing the need to contest or defend the validity of a trust or the actions of a trustee, do not hesitate to get in touch with an experienced probate litigation attorney to get the expert guidance your matter deserves.
Want to Discuss Any Element of Michigan Estate Planning and Probate?
Interested in learning more about the differences between heirs, beneficiaries, and devisees, and how each of these important concepts may affect you? Curious about any aspect of estate planning, or the legal process your estate may succumb to in court during probate?
Whether you are currently dealing with the legal aftermath following the passing of a loved one, or are ready to find ways to make estate administration more efficient for your friends and family down the line, our firm is here and ready to help.
At the Patrick & Associates, PLLC., we put our legal experience and skills together with our commitment to excellence in representing your rights. You can depend on our law firm’s ability to listen to you and our talent for creative strategies as we help you navigate estate planning and probate, including (but not limited to) general probate litigation, wills and trusts contests, beneficiary disputes, guardianships, and conservatorships.
Have any more questions? Ready to get started? Our staff is available 24/7 to answer any questions and help you with your legal matters. Contact Dean E. Patrick at his Southfield office at (833) 469-4897, or click here to arrange your initial consultation.
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