Probate is a court oversight process to determine who will inherit your assets – and if applicable: (a) appoint who will care for your minor children (Guardian); (b) appoint who will oversee their finances (Conservator).
When is Probate Required? Probate applies if you don’t have a will or if your assets exceed a threshold amount (which is quite low).
Types of Probate: Michigan has four probate avenues:
- Small Estate: if your total non-exempt assets (after paying for burial and funeral costs) is less than $22,000, you can use the Small Estate process. It is quite simple and merely requires the filing of Form PC 556.
- Medium Estate: if you are survived by your spouse and/or minor children and your total non-exempt assets (after paying for burial, funeral, last illness and administration costs) is less than approximately $55,000 (there is a specified formula based upon types of assets), you can use the Medium Estate process. It is quite simple and merely requires the filing of Form PC 556.
- Unsupervised Regular Probate: the personal representative is permitted to close the estate without court supervision unless the personal representative requests the court’s assistance or an interested party (usually a creditor or beneficiary) requests court intervention. The minimum time to close your estate using this avenue is 5 months.
- Supervised Regular Probate: the court reviews and approves the estate activities. This is required for estates where: (a) real estate will be sold; (b) fees will be paid to an attorney or personal representative; or (c) distributions will be made to beneficiaries.
Assets Exempt from Probate: Items “exempt” from probate include:
Joint tenancy with right to survivorship – available for real estate, stock, bonds, mortgages and other forms of indebtedness. Tenancy by the Entirety – available only to married couples (in Michigan this only applies to real estate)
All other assets will be subject to probate if the total assets non-exempt assets exceed $22,000.What does the Court do?
1. Guardians – the probate court will appoint who the Guardian(s) will be to raise your minor children (or care for your incapacitated adult children). If you have a will nominating Guardians, in almost all instances, the court will honor your wishes by appointing the person you nominated. If you don’t have a will, the court will appoint a Guardian based upon what is in the “best interests of the child”.
2. Conservator – the probate court will appoint the Conservator who will oversee the assets available for your minor children (or incapacitated adult children). These assets will include: (a) assets the children owned before your death; (b) assets inherited through your will; or (c) if there is no provision in your will, then according to statutory inheritance rules (called Intestate Succession). If you have a will nominating a Conservator, in almost all instances, the court will honor your wishes by appointing the person you nominated in your will. If you don’t have a will, the court will appoint a Conservator based upon what is in the “best interests of the child”.
3. Personal Representative – the probate court will appoint your Personal Representative who will wrap up your estate according to the terms of your will or, if you don’t have a will, then according to law. If you have a will nominating a Personal Representative, in almost all instances, the court will honor your wishes by appointing the person you nominated in your will. If you don’t have a will, the court will appoint the Personal Representative.
4. Asset Distribution – the probate court will transfer legal title for your estate assets: (a) to the beneficiaries designated in your will or; (b) if you don’t have will, then to the inheritors who will take the assets by statutory inheritance rules (called Intestate Succession).
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