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Understanding Michigan’s Homestead Allowance, Family Allowance, and Exempt Property

Michigan Homestead Allowance, Family Allowance, Exempt Property

Losing a loved one is always difficult and emotionally trying. The loss of a family member can take on a new dimension when the decedent was the head of the household, or one of the primary income earners in the family. In Michigan, there are a number of rights belonging to the surviving spouse and children of the decedent that can help make this daunting loss somewhat easier to manage — and which are important for the personal representative and surviving family members of the decedent to understand. 

As described in Michigan’s Estates and Protected Individuals Code (EPIC), the priority allowances to which a decedent’s surviving spouse and dependent children are entitled are the homestead allowance; the family allowance; and exempt property. 

It is important to note that these allowances and rights to exempt property are only available in situations where an individual dies while domiciled in Michigan; for a decedent who dies domiciled outside of this state, rights to homestead allowance, family allowance, and exempt property are governed by the law of the state where they were domiciled at the time of their death. 

*An important note on adjustments: The dollar amounts used below are adjusted annually for inflation, pursuant to MCL 700.1210. When you see a dollar amount noted with an asterisk (*), keep in mind that this specific dollar amount shall be multiplied by the cost-of-living adjustment factor for the calendar year in which the decedent dies. You can find a chart of relevant cost of living adjustments from 2001 through 2020 here, courtesy of the Wayne County Probate Court. An experienced and knowledgeable probate and estates attorney can also help you determine the most up-to-date figures.

Homestead Allowance

A surviving spouse of the decedent is entitled to a homestead allowance of $15,000* (adjusted to $24,000 as of 2020, as provided in section 1210). If there is no surviving spouse, the decedent’s minor and dependent adult children may share the amount of the allowance, divided equally. 

The homestead allowance is exempt from and has priority of other claims against the estate, except administration costs and expenses and reasonable funeral and burial expenses. Broadly speaking, the homestead allowance is payable in addition to any share of the estate that passes to the surviving spouse or minor or dependent children by the will of the decedent, intestate succession, or elective share. 

Family Allowance

The family allowance is intended to provide support for the decedent’s family during the administration of the estate — a period of time which may be quite speedy or slow and drawn out, depending on the unique circumstances of the decedent and their estate. 

Under EPIC, a “reasonable” family allowance is payable to the decedent’s surviving spouse and minor children whom the decedent was obligated to support, as well as children of the decedent or another who were being supported by the decedent.

If the estate is inadequate to discharge allowed claims, allowance shall not continue for longer than one year; the amount of the family allowance may be paid in a lump sum or in periodic installments. The amount is payable to the surviving spouse, and is meant to go to their use and to care for their minor and dependent children. Otherwise, this amount may be paid to the decedent’s children or anyone having their care and custody; if a minor child or another dependent is not living with the surviving spouse, the allowance may be paid partially to the child or to a fiduciary or another person in charge of their care and custody, and partially to the surviving spouse. 

The family allowance is exempt from and has priority over all claims except administration costs and expenses, reasonable funeral and burial expenses, and the homestead allowance. This allowance is generally payable in addition to any share passing to the spouse or children by will, intestate succession, or elective share. A recipient’s right to unpaid allowances is terminated upon the death of the individual.

Exempt Property

The decedent’s surviving spouse is also entitled to household furniture, automobiles, furnishings, appliances, and personal effects from the estate up to a value not to exceed $10,000* more than the amount of any security interests to which the property is subject (adjusted to $16,000 as of 2020, as provided in section 1210). If there is no surviving spouse, the decedent’s children are entitled jointly to the same value (unless they are excluded, as we’ll explore shortly). 

If encumbered assets are selected and the value in excess of security interests, plus that of other exempt property, is less than $10,000* or if there is not $10,000* worth of exempt property in the estate, the spouse or children are entitled to other assets of the estate to the extent necessary to make up the value. 

Rights to exempt property and assets needed to make up a deficiency of exempt property have priority over all claims against the estate, except as necessary to permit for the payment of all of the following in the following order: 

  • Administration costs and expenses
  • Reasonable funeral and burial expenses.
  • Homestead allowance.
  • Family allowance.

Exempt property rights are in addition to a benefit or share passing to the surviving spouse or children by the decedent’s will, intestate succession, or elective share. The decedent may choose to exclude one or more of their children from receiving exempt property (or assets to make up a deficiency) by:

  • Expressly stating by will that the child takes nothing, or the child takes an amount of $10.00 or less from the estate
  • Expressly stating by will that the child is not to receive exempt property

Selection, Determination, and Documentation

If the estate is otherwise sufficient, property specifically devised shall not be used to satisfy the homestead allowance or exempt property. Subject to this restriction, the surviving spouse, fiduciaries or others that have the care and custody of minor children, or children who are adults, may select property of the estate to satisfy the homestead allowance and exempt property.

If they fail to do so within a reasonable time, the personal representative may make those selections. The personal representative may execute a deed of distribution or other instrument to establish the ownership of property taken as homestead allowance or exempt property. 

The personal representative may also determine the amount of the family allowance to be paid in a lump sum not exceeding $18,000* ($29,000 as of 2020, adjusted as provided in section 1210), or periodic installments not exceeding 1/12 of that amount per month for one year. The personal representative may disburse funds of the estate in payment of the family allowance and any part of the homestead allowance payable in cash.

The personal representative or any interested person aggrieved by a selection, determination, payment, proposed payment, or failure to act under this section may petition the court for appropriate relief, which may include a family allowance other than that which the personal representative determined or could have determined.

Have Any More Questions About Michigan Probate or Estate Administration?

Coming to terms with a loved one’s passing is a difficult and emotional process – and one that is only made more fraught when you need to deal with intricate legal and financial matters at the same time.

Throughout this trying time, it’s important to have an experienced and professional advocate on your side, one who can patiently help you understand the ins and outs of probate and estate administration in your area.

Whether you are a personal representative, an heir, a creditor, a named beneficiary, an omitted child, or a widow/widower, a probate and estates attorney can help address your questions and navigate the process from beginning to end, so that you can secure the best possible outcome for your situation.

If you’re based in Michigan, Attorney Dean E. Patrick can help you gain a better understanding of probate and estate administration. Mr. Patrick is knowledgeable on all aspects of probate, with years of experience as a practicing attorney. Whenever you’re ready to get started, he is here to listen and learn more about your circumstances, and start finding a solution to your desired outcome. 

If you have any probate-related issue that has interrupted your life, our entire firm will work hard to accomplish your goals – with expertise, empathy, intellect, and professionalism at every step of the way.

Ready to keep the conversation going? The Patrick & Associates, PLLC.. is conveniently located in Southfield, Michigan, close to both Wayne and Oakland Counties. You may click here to arrange your initial consultation or call us at (833) 469-4897 today.

This post has been prepared for general information purposes only. The information you obtain here is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and electronic mail.  Accessing the content of this site does not create an attorney-client relationship.  Nor, does contacting us create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

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