Oftentimes, people are of the mind that they can procrastinate making an estate plan because they expect to live a full life. However, unfortunately, passing away sometimes occurs sooner than expected. In Michigan, when you don’t have an estate plan in place when you pass away, your estate will go through public probate rather than being handled privately. Subsequently, your family will have to go through this time-consuming and expensive process.

Public Probate in Michigan

In Michigan, when somebody dies without having an estate plan in place, they have “died intestate,” and their estate (all money, property, assets, and debt) will likely go through public probate, or the court-administered process of distributing assets. In general, there are four steps in the Michigan probate process:

1. Settling the Estate: A personal representative is appointed by the probate court.

2. Inventorying the Assets: The personal representative is responsible for taking inventory of all the deceased’s assets, such as property and bank accounts, so they can be distributed to the deceased’s beneficiaries. There is a fee for everything that passes through inventory.

3. Settling Debts: All the deceased’s outstanding debts, taxes, and creditors need to be paid after their death.

4. Distributing Assets: The remaining assets will be distributed according to Michigan’s intestacy laws, which generally intend to distribute a person’s assets how they likely would have had they made a Will or Trust. Intestate succession laws start with the deceased’s closest relatives and then move to more distant relatives:

• Surviving spouse
• Children (biological and adopted)
• Grandchildren
• Surviving parents
• Siblings
• Nieces and nephews

Sometimes after a death, the family of the deceased may disagree about what they believe they are entitled to from the deceased’s estate. Without a proper estate plan in place, or even simply a Will, there is no way of proving what the deceased may have wanted. This could possibly result in a formal legal dispute that needs to be settled in court.

Public Probate with a Last Will and Testament

A Last Will and Testament is the estate planning document people are most commonly aware of. In general, it dictates who should receive the deceased’s assets after they pass.

However, although a Will does dictate how and to whom assets are distributed, it does not avoid probate court, and it will go through probate in the county in which the deceased lived.

Avoiding Probate with a Revocable Living Trust

A Revocable Living Trust is an estate planning document similar to a Will. Unlike a Will, which requires going through public court proceedings in order to distribute assets, a Revocable Living Trust avoids probate, meaning the assets are distributed privately and more quickly. The only time a Revocable Living Trust may go through the probate process is if a family member or creditor contests it.

Why Would Someone Want a Revocable Living Trust?

A Revocable Living Trust assists in times of incapacity. If you become mentally or physically unable to manage your affairs, your successor trustee can step in without court involvement. The significance of this seamless transition cannot be understated when this must occur during a time that is already stressful for the family. Too often, financial institutions will not accept a durable power of attorney. It is uncommon that a successor trustee will be denied access to accounts.

A Revocable Living Trust allows you to manage assets across states. If you own real estate in multiple states, a trust helps avoid probate in each of those states, which can be a real headache for your heirs.

A Revocable Living Trust is Flexible

You can change or cancel it anytime while you’re alive and competent. It’s not a permanent lock-in. You can remove or add assets to it and tailor specific instructions such as “my kids receive my assets for their health, education, maintenance and support until they are 30 years old” or “my house goes to my second spouse until death, then my house goes to my kids.” There is no court approval needed.

The best way to avoid the lengthy, expensive, public probate process is to have a proper estate plan in place. Call or email our office today to ensure a smooth transition for your family.