After losing a loved one many face a difficult and emotional time — and it can be made even more complex and frustrating with the addition of formal legal proceedings and the potential for nasty disputes and prolonged contests. This is why it is so important in Michigan to plan ahead for probate, and all that it entails.
When someone passes away, they leave behind a lifetime’ worth of property, financial accounts, and other assets, known as their estate. Probate and estate administration are meant to help settle all matters related to a person’s estate under the guidance of Michigan Law and supervision of the courts, in order to minimize the potential for fraud and manage unexpected complications as they arise.
What Does Probate Mean in Michigan?
While the probate court has broad jurisdiction to handles matters related to deceased estates, trust estates, guardianships, and conservatorship, this article focuses on probate relating to deceased estates.
Black’s Law Dictionary defines probate, used as a noun, as “[t]he judicial procedure by which a testamentary document is established to be a valid will; the proving of a will to the satisfaction of the court.” That’s mumbo jumbo for having a last will, if there is one, admitted to court so that administration can begin.
In the minds of most, probate as is typically thought of as in its verb form. That is the court process through which a person’s property is gathered and distributed after they pass away. The probate process is required in order to open and administer the estate of the deceased person, also known as the decedent.
In broad strokes, estate administration typically involves a few key pieces, including:
- Appointing a personal representative to oversee the estate
- Gathering the assets of the estate and determining their value
- Paying the decedent’s debts and final expenses from the estate
- Distributing remaining assets to the appropriate people or entities, in line with the decedent’s wishes and all relevant local laws
Do All Estates Go Through Probate?
While probate is quite common, there are situations in which probate may be avoided after an individual’s death, based on several factors. Taking steps to avoid probate — or, at the very least, to streamline or simplify the process — will often be a key consideration when estate planning, which is the process of preparing financially and personally for death or incapacity.
Broadly speaking, probate is meant to oversee specific types of assets — namely, assets owned in the decedent’s name alone, with no stated beneficiary.
This means that many common types of assets automatically avoid probate in most cases, including:
Property owned as joint tenants or tenants by the entirety.
Assets owned through joint tenancy with rights of survivorship automatically transfer to the surviving co-owner upon the decedent’s death. Tenancy by the entirety operates similarly to joint tenancy except it is only available to married couples in Michigan.
Assets placed in a trust.
Many individuals set up a revocable living trust to help assets avoid probate. Any assets placed into a trust bypass probate, and are instead managed and distributed by a trustee, who is named by the person who established the trust (also known as the settlor or grantor). There are also specific types of trusts which can be used to allocate money for charity, provide for future beneficiaries with special needs, or even allocate resources for the well-being of a pet.
Financial accounts, assets, and policies with a beneficiary designation.
Many types of financial accounts and assets — including retirement accounts, life insurance policies, bank accounts, and securities — can be set up with a designated payable-on-death beneficiary. If set up properly, this means that the account assets or policy proceeds go to the named beneficiaries upon the death of the account owner or policy holder.
If a person passes away leaving behind an estate that falls below a certain financial threshold, the estate may be administered in such a way that the courts are not involved (or their involvement will be significantly limited). It is important to consult with a lawyer to gain a better understanding of the process for administering a small estate in Michigan, including the most up-to-date values for when an estate may qualify for the simplified small estate process.
Probate will almost always be required in situations where the decedent has assets in his name alone at the time of death but he left only a will, or no will at all, to direct the disposition of those assets. In cases where there is no will, the laws for intestate succession (legalese for the State of Michigan making a will for you) go into effect. Depending on the circumstances this can lead the court to become closely involved in overseeing the collection and distribution of all estate assets.
If you do have a will, it must be administered by the probate court. However, there are other mechanisms you can put in place in addition to your will, including a trust, which can simplify and expedite the process and minimize the risk for disputes and contests.
Formal, Informal, and Simplified Probate
In researching Michigan probate, you may come across a few key terms — including “formal” or “informal” probate and “supervised” or “unsupervised” administration. These are all different ways through which probate may be administered under the Estates and Protected Individuals Code (EPIC), which governs matters pertaining to the administration of estates of deceased and protected persons in Michigan.
EPIC indicates that the proceeding used in a given case will reflect a judgment by the personal representative and the attorney as to the degree of protection needed under the circumstances.
Under EPIC, the basic options are:
Formal Proceedings.
Under EPIC, formal proceedings are desirable when there is a need for immediate certainty or when there is a conflict among interested parties. Formal proceedings typically include many more steps than informal proceedings, And, formal probate proceedings include more time spent in front of a probate court judge, who must oversee and approve many of the actions taken by the appointed personal representative. The formal approach results in an order of the court so a personal representative can move forward without concern of later lawsuits against them.
Informal Proceedings.
Informal proceedings typically involve fewer steps and less time in the courts than formal proceedings —but there are still many important moving parts to consider. Generally speaking, informal proceedings are used in situations where probate is expected to be somewhat simpler — whether due to fewer creditors to the estate or more agreement between surviving friends and family. In informal proceedings, the personal representative has more consultationdom and authority to act on behalf of the estate.
Supervised Administration.
Under EPIC, supervised administration provides a single, comprehensive settlement process under which the court must, in a formal proceeding, oversee and approve all aspects of the administration process — including the validity of the decedent’s will, the personal representative’s priority and qualification to serve, and all distribution of assets.
Understanding the distinction between these proceedings can be complex. A local attorney can help you gain a better understanding of the entire estate administration process, and how it may play out based on your specific circumstances.
Probate: The Timeline and Associated Costs
While no two individuals’ experiences with probate will occur in exactly the same way, there are a few general benchmarks and questions to be aware of. Many people try to avoid probate because of their concerns about how long the process will take, as well as the costs and fees associated with probate.
In short, there are certainly financial and personal costs associated with probate which you may wish to prepare for in advance.
Realistically, the probate process typically takes less than a year, but probate can be avoided or shortened if initial planning steps are taken and the matter remains uncontested. Probate will likely take longer if there are administration issues that arise, including contests or disputes to trusts,wills, joint accounts, and beneficiary designations. Typical monetary costs involved in probate may include court costs, administration fees, and appraisal fees.
Many people are also concerned about their privacy in probate. Court records associated with probate are public, and people can access information regarding the value of the estate, the name and contact information of the beneficiaries, and other private details. With proper planning you can preserve the privacy of your loved ones.
When Probate Becomes Complicated
As alluded to so far, probate can be a fairly straightforward process, but there are also many circumstances in which it is very far from cut-and-dry. It’s important to be aware of all possibilities and outcomes in complicated and contested probate matters. In these situations, you must find a legal professional who can competently help you navigate the ups and downs of the probate process at every step of the way.
Probate is typically much more complex if there is conflict among the decedent’s heirs/ beneficiaries, or if it is not made clear who should receive estate assets. The decedent’s estate planning documents may be incomplete or inaccurate, leading to confusion and frustration, particularly if there must be a determination of heirs. And all to often, we have a client walk into our office stating that although the will directs everything equally amongst the surviving children, “dad” told him he was to receive the expensive “you fill in the blank.”
Similarly, probate can be made far more fraught if there are questions surrounding the decedent’s passing — including wrongful death or abuse while the decedent was incapacitated — or if there are lingering questions about their estate planning documents, such as whether there was fraud or undue influence from an outside source.
There may even be complications with the personal representative which must be addressed, such as a breach of fiduciary duty or problems with the estate accountings.
The Importance of Working with an Experienced Michigan Probate Attorney
Even under the best of circumstances, probate can be difficult to handle on your own. Whether you are a personal representative, an heir, a creditor, a named beneficiary, or a person who knows the deceased was taken advantage of before their death, the knowledge and guidance of an experienced probate attorney can help you understand the intricacies of this important process, while also giving you a supportive ally as you recover from grief and pursue justice for your loved one.
If you are currently dealing with the legal aftermath following the passing of a loved one, Attorney Dean Patrick can provide the assistance and support that you need as an estate, contested or not, is guided through the Michigan probate courts.
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 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? Contact Dean E. Patrick at his Southfield office at (248) 663-2566, or click here to learn more or arrange your consultation initial consultation. Our staff is available 24/7 to answer any questions and help you with your legal matters.