When someone passes away, their affairs must be cared for. While family and friends may feel they are in the best position to do this, according to the Michigan Estates and Protected Persons Code, an estate of a decedent must go through a legal process called probate. During that process, the personal administrator appointed by the Probate Court manages the decedent’s estate and ensures that it is settled in the manner required by law.
The probate process has multiple steps, the first of which is the filing of a petition with the Probate Court in the county where the decedent lived. If the decedent left a will, it must also be filed. The court will review the will for validity and appoint the personal representative, empowering them to move forward with the steps necessary to settle the decedent’s estate.
The next step is to identify, secure, and appraise the decedent’s estate. This step is critical as the value of the estate will determine how much money is available to pay estate debt and distribute to the beneficiaries and heirs. The personal representative must understand the definition of probate property, as only property that the decedent owned that is classified as “probate property” is relevant to the probate process. For example, if the decedent owned a house with another person as joint tenants with right of survivorship, the decedent’s interest in that house would automatically transfer to the other person upon the decedent’s death. The terms of the will and the probate process would not impact that property.
The next step is paying estate debt. Estate debt must be paid out of estate assets. If there are not sufficient assets to pay all debt, then some debt will go unpaid. Similarly, when it is time to distribute assets to the beneficiaries or heirs, the amount that beneficiaries receive depends not only on the terms of the will, but on what is left in the estate after debt and expenses of administration are paid.
Even if you do everything correctly, follow all the steps, and adhere to the legal requirements, the process may not be free of complications. Parties to the proceeding may find that they do not agree on various aspects of the process. For example, a disinherited family member may believe that they have evidence that the will is fraudulent and initiate a will contest to prevent the will from being probated. The personal representative and a beneficiary may have conflicting interpretations of provisions of the will and request that the court resolve the difference. A beneficiary may question the way the personal representative managed estate asset and demand an estate accounting.
Any probate dispute has the potential to significantly delay the process. If the litigation is related to the validity of the will or entitlement to inherit, such litigation will impact how estate assets are distributed.
If a decedent does not leave a will or if their will is declared invalid, the decedent would be intestate. This does not mean that probate does not apply. It does. The estate must still go through an administration process to settle the affairs of the decedent. The main difference between testate administration and intestate administration is how it is determined who receives the decedent’s property. When there is a will, the will states who gets what property. When there is no will, Michigan’s law of intestate succession determines who gets the decedent’s probate property. Mich. Comp. Laws § 700.2102 et seq. With intestate succession the surviving spouse and children, if any, are the primary heirs. In the absence of either, other relatives would be entitled to inherit.
Small Estate Administration
In instances where the estate has assets that do not exceed a threshold amount, Michigan has two procedures that allow a much faster distribution of assets than standard probate.
Small Estate Affidavit
The Small Estate Affidavit procedure allows a decedent’s surviving spouse, adult child, or other heir to request immediate distribution of specific assets. The person requesting immediate distribution must complete an affidavit indicating the asset to which they are entitled. When the signed affidavit along with the death certificate is presented to the party who holds the asset, that party is required to release it and transfer title to the affiant. Thus, the beneficiary receives the asset without having to go through probate.
This process is only available to estates that do not include real estate and where the value of the estate is $15,000 or less. Mich. Comp. Laws § 700.3983.
Simplified Probate Procedures
Another option for certain small estates is a simplified probate process. Upon petition, the court can allow the executor to immediately distribute assets without giving notice to creditors. This procedure is only available if the value of the estate is $15,000 or less . Mich. Comp. Laws § 700.3982. The procedure is also available if the value of the estate does not exceed the homestead allowance, family allowance, exempt property, expenses related to the administration of the estate, and reasonable expenses related to the decedent’s last illness and funeral. Mich. Comp. Laws § 700.3987.