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Our firm handles probate
and estate administrations, which is the area of law dealing
with the distribution of an individual's property at his or
her death, taking into account wills, taxes, insurance, property,
and trusts so as to gain maximum benefit of all laws and, at
the same time, carrying out the person's wishes. Probate is
the court proceeding through which a will is proved to be valid
and the estate of a decedent is administered. The process,
generally, includes collecting a decedent's assets, liquidating
liabilities, paying necessary taxes, and distribution of property
to heirs.
Lawyers refer to the entity that owns the deceased`s
assets until those assets are distributed as an "estate." Estate
Administration includes the probate process as well as non-probate
transfers of the deceased`s assets, such as joint ownership
and transfer on death (TOD) accounts. Michigan laws direct
the probate court how to distribute the deceased`s estate.
The law is complex, so, it is important to consult a firm that
has expertise in this area of the law to ensure that the deceased`s
assets are distributed correctly and according to his or her
wishes.
What Is Probate?
The term probate refers to the manner of administering the
property (the estate) of a decedent by a personal representative
(PR) under the jurisdiction of one of Michigan's county probate
courts. The estate's PR is appointed by the court, usually
on the basis of being named in the will or by the interested
person asking the court for commencement of the probate proceedings.
The administration of a decedent's estate essentially involves
3 steps after the court has appointed the PR:
First, the marshalling of assets (the assembly, securing,
valuation, and sorting of the decedent's property), second,
the payment of charges (last illness and funeral expenses,
amounts owed to creditors, taxes, family allowances, and general
expenses of administration), and third, distribution of what
is left to the estate beneficiaries (either according to the
terms of the decedent's will or, if there is no will, in accordance
with Michigan's law of interstate succession).
When Is Probate Required?
Generally speaking, probate is only necessary when a person
dies leaving property in his or her own name (such as a house
titled only in the name of the decedent) or having rights to
receive property (such as wrongful death claim or a debt owed
to the decedent). However, not all property in which the decedent
has an interest will be subject to probate. There are 4 kinds
of property which pass to a new owner on death without going
through probate.
1. Property that is owned by the decedent and another person
as joint tenants with right of survivorship will pass automatically
to the surviving joint owner without going through probate
(except in the case of certain joint bank accounts which are
established with another person who is to act as agent for
the decedent).
2. Beneficiary designated properties (such as life insurance,
pension benefits, and IRAs) are payable on death, without probate,
to the beneficiary designated by the decedent (or, if none,
as designated in the contract or plan itself).
3. Properties owned by a revocable trust do not go through
probate, but instead, are disposed of after death in accordance
with the instructions written into the trust document.
4. There are even some forms of property owned solely by the
decedent which would otherwise require probate that are exempt
in certain instances. Those notable exceptions include the
following -
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Unpaid wages. An employer in Michigan may
pay the wages due a deceased employee to the employee's
spouse, children, parents or siblings, in that order, unless
the employee filed a request to the contrary with the employer. |
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Cash up to $500 and wearing apparel. A hospital, convalescent
or nursing home, morgue, or law enforcement agency in Michigan
holding cash, not exceeding $500, and wearing apparel of
the decedent, may deliver that property to the decedent's
spouse, child, or parent who provides (i) suitable identification
and (ii) an affidavit which states the person's relationship
to the decedent and that there are no pending probate proceedings
for the decedent's estate. |
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Travelers checks. Most issuing companies (such as American
Express) will redeem unused travelers checks following
the death of the owner without requiring the appointment
of a PR on submission of the checks, a death certificate,
and an appropriate affidavit by the next of kin indicating
to whom payment should be made. |
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Motor vehicle transfers. If the combined value of one
or more of the decedent's motor vehicles does not exceed
$60,000, and there are no probate proceedings for the decedent's
estate, registration of title may be transferred by the
Michigan Secretary of State to the surviving spouse or
next of kin upon submitting a death certificate, an affidavit
of kinship, the vehicle's certificate of title, and certain
other Michigan Secretary of State documents. |
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Watercraft transfers. If the combined value of all of
the decedent's watercraft does not exceed $100,000, and
there are no probate proceedings for the decedent's estate,
registration of title may be transferred by the Michigan
Secretary of State to the surviving spouse or next of kin
upon submitting a death certificate, an affidavit of kinship,
and the certificate of title for the watercraft. |
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Income tax refund claims. These may be collected without
probate by filing IRS or Michigan form 1310. |
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Transfer by affidavit. Personal property with a value
not exceeding $15,000 may be transferred to a decedent's
successor by presenting a death certificate and an affidavit
stating who is entitled to the property. |
Types Of Probate Administration
Small Estates
There are two types of proceedings for small estates - in
either case, Michigan's small estate law provides for the manner
of distributing the estate assets (i) even though the decedent
may have had a will giving the property to other persons or
(ii) regardless of Michigan's law of interstate succession
in certain instances (if there is no will).
The first small
estate proceeding applies to those cases where all of the real and personal property
owned by the decedent has a total value equal to or less than the sum of the
following: (1) the funeral expenses; plus (2) $17,000 (adjusted annually
for inflation). Upon presentation of a petition and payment
of the filing fee, the probate court may order that the funeral
expenses be paid, if they have not been paid, or that the person
who paid them be reimbursed. The balance of the property will
be assigned to the surviving spouse, or if none, to the decedent's
heirs under Michigan's law of interstate succession. No court
hearing is held. During the 63 day period following the court's
assignment of the property, the heir, if neither the decedent's
surviving spouse nor minor child, will be responsible for any
unsatisfied debt of the decedent up to the value of the property
received.
For somewhat larger estates, a second kind of small estate "summary
proceeding" may be available in those cases when the decedent
is survived by his or her spouse or minor/dependent children.
If, upon preparation of the estate's inventory, the value of
the estate is less than the sum of the following:
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All mortgages and
liens |
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The homestead allowance (such
an allowance of $15,000 can be paid to the surviving spouse
or, if none, to the decedent's minor and dependent children) |
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Exempt property (up to $10,000
of the decedent's personal and household articles can be
selected by the surviving spouse or, if none, by the decedent's
children) |
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The family allowance (of up
to $18,000; if a higher amount is desired, it must be approved
by the probate court) |
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Funeral, last illness, and
administrative expenses, then the PR may simply pay the
amounts due the secured creditors and the balance to the
surviving spouse (or, in some cases, to the conservator
for the minor children) and then close the estate. |
Regular Estates
There are two forms of regular administration of a decedent's
estate. The first, unsupervised administration, permits the
PR to act in a manner independent of the court unless intervention
is requested by the PR or an interested person (such as an
unpaid creditor or an estate beneficiary). This form of administration
is generally preferred unless there is a specific reason to
request the court’s supervision of the estate. In addition,
since there is less court involvement, fewer details concerning
the estate's administration will be in the court file and available
for inspection by the public and the media, unsupervised administration
offers some privacy for the decedent's family.
The second form
of probate administration, supervised administration, requires
the probate court's review and approval of much of the estate
activities. For example, in supervised administration the court
would be required to (i) approve the sale of the decedent's real
estate (unless the decedent's will authorizes the PR to do so),
(ii) authorize the payment of PR and attorney fees, (iii) review
the PR's accounting of all receipts and disbursements, and (iv)
prior approval of all distributions to heirs (people receiving
property from the estate if there is no will) and devisees (people
receiving property under a will). While the court's involvement
frequently adds to the time and expense of administering an estate,
the court's supervision will likely afford greater protection
to the PR and the other interested persons against losses and
claims.
Unsupervised administration is commenced by filing either
an application or petition with the probate court. Supervised
administration is commenced by filing a petition that includes
a request for supervision.
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