When a loved one or relative passes away, the property of a Michigan resident decedent's estate is processed through the Michigan probate system. At such a difficult time, beginning the process of probating an estate can be overwhelming. There are many probate options and considerations depending on the size of the estate and potential liability for the personal representative or persons responsible for managing and processing the estate. Care should be taken to minimize the expense of probating the assets while ensuring that all necessary administration actions are timely performed. A decedent with debts outstanding may require careful consideration of the type of estate administration to use. Steiger Tax Law can help you manage this process at a low cost to preserve the assets your loved one worked so hard for.
General Probate Process
The first question encountered by loved ones seeking to probate an estate is whether a will exists. If no will can be located, then the decedent's probate estate will be distributed according to the Michigan intestate rules, which are standardized distribution rules to various classes of heirs.
Next, a determination of whether the will is valid or defective. Multiple wills, wills without proper signatures, wills drafted and signed after losing mental capacity to sign, etc. may result in challenges to the validity of the will and a "will contest" among family members. Expensive litigation likely results from will contests and should be contemplated and avoided during the estate planning process.
A will also generally is drafted by the decedent to appoint a personal representative. The personal representative under Michigan probate law is the person responsible for managing the probate process. If no personal representative is appointed by the will, the Michigan probate law provides rules for who may seek appointment for this purpose. These rules apply to intestate estates and usually the person applying to probate the estate will seek the role of personal representative.
To begin the probate process, an application must be made to the probate court in the county where the decedent last resided. There are many options for processing a probate estate in Michigan depending on the size of the estate and if litigation is sought by any of the interested parties for any reason. Michigan has multiple options for specific small estates, informal and formal proceedings, and supervised and unsupervised proceedings. While sounding complicated, upon a careful review prior to filing, an uncontested probate estate can be administered cost effectively upon choosing the right course of action. Attorney Andrew Steiger can help guide you through this probate process.
Small Estate Administration
Estates with limited assets or types of assets may qualify for small estate administration proceedings. The benefit of small estate administration under Michigan law is the avoidance or limitations on filing many forms that require careful preparation, including an inventory accounting, notices to interested parties, and potential liability of the person administering the estate. The small claim options include a "paycheck only" option where a paycheck or employee benefit is the only asset in the decedent's estate, where the decedent owns only an automobile that must be transferred, a $500 cash and apparel procedure. While uncommon these options require very minimal effort to process. For slightly larger estates, two other small estate options exist.
A "dollar limit" estate may be administered under either court or affidavit proceedings if the value of the gross estate is less than $23,000 (in 2019) after taking funeral expenses into account. Issues related to what is in the gross estate may arise and non-probate assets are not taken into account when determining the value of the gross estate. When complete the court provides an order that is used to transfer or re-title assets. An heir receiving property is responsible for 63 days to pay creditor bills that may arise but only up to the value of any assets received.
There is also a "total allowances" estate proceeding that may benefit surviving spouses and others. The Michigan probate code provides various allowances to pay funeral expenses, a homestead, family allowances, medical costs and estate administration costs. If these costs exceed the value of the estate, the total allowances method may be used to streamline the administration procedures and close the estate quickly. This method can be used for both testate or intestate proceedings. Care should be used if the spouse or heirs believe an estate will be contested because a later appointed personal representative can make a claim against a spouse or heir who receives a distribution under this type of proceeding.
If you have questions about the above methods to probate an estate, contact Steiger Tax Law for a free consultation. Michigan probate attorney Andrew Steiger offers low flat fees or hourly rates to advise clients who utilize any of these methods. Avoid costly probate administration - contact Steiger Tax Law today.