Why You Should Avoid Michigan Probate
When most people think of probate, they think of an expensive, time consuming process that often involves costly litigation and personal financial risk to person responsible for administering the estate. While many probate estates do not involve litigation, whether related to the validity of a will, who is entitled to property under the terms of the will, or a contest related to a blended family (for example, the decedent's children vs. a second or third spouse), probate may be a lengthy, time consuming process requiring strict adherence to fiduciary standards and reporting to the court. Given the many options to avoiding probate, and the benefits of the tools available to avoid probate, it is often advisable to avoid probate when possible.
Probate is the process of distributing a decedent's probate estate according to the terms of a valid will, if one exists, or by the Michigan intestate rules when no will exists or is held by the probate court to be invalid and unenforceable. The Michigan estates and protected individuals code defines what property is not subject to the probate process. Probate assets generally include all property owned at the time of death except for property held in trust, property subject to joint ownership and property that passes through a beneficiary designation. These three big classes of property interests allow for a decedent to avoid probate, but the advantages and disadvantages of each should be considered carefully.
For an estate that is in probate, one disadvantage is the loss of privacy. The will is filed with the court and is a public document, along with other court filings. For large estates or estates with very personal possessions that the family may want to keep private, this loss of privacy may be better avoided by putting the property in a trust. Another disadvantage is the cost of probate. There are filing costs, an inventory fee based on the value of the assets in the probate estate, the cost of a personal representative and likely attorney fees to support personal representative decisions. There is also the risk of liability to creditors who do not receive payment. The personal representative may also be liable to pay other estate administration expenses, and if the personal representative fails to do this, may be personally liable. Finally, depending on the speed of the personal representative and the general timing requirements to notify creditors and pay other expenses, beneficiaries who are entitled to assets and need them immediately, like a spouse for example, may have a lengthy wait to receive those assets. This may cause unnecessary hardship for the beneficiaries.
If you have questions or are interested in estate planning to avoid probate and ensure your loved ones are taken care of, contact Michigan estate planning attorney Andrew Steiger at Steiger Tax Law for a free consultation to see what kind of estate planning tools are available and the cost of implementing an estate plan.