Probate Law

An Informal Probate Overview

Whenever someone dies they are often referred to in the legal word as a decedent. To be more specific, a decedent is someone that left property behind. Various types of property must be passed down to the individual deemed to inherit it. What kind of property does this include?

  • Real Estate Including residential housing and other buildings, commercial property, as well as land and other property attached to it.
  • Personal Property Such as furniture, vehicles, and other elements otherwise unattached to land.
  • Bank Accounts, Stocks, and Bonds
  • Debts Owed to the Decedent
 

How a decedent’s personal property is to be distributed is spelled out in law upon their death. For example, in the state of Michigan, probate courts are responsible for ensuring the proper distribution of a decedent’s property. This practice is referred to as probate administration, which often involves elements beyond that of the decedent’s property. 

Any possessions outside of an estate are not handled or distributed by the probate court. Typically, an estate does not consist of jointly owned property, insurance policies, trusts (that aren’t established by a will), or retirement accounts. When property is owned by more than one person, it is known as jointly owned property, and stands as a rather complex situation.

Jointly Owned Property

Jointly owned property is not typically included in an estate, as it is property owned by more than one person. Some examples of jointly owned property may include the title of a vehicle, joint bank accounts, and more. Once a joint owner becomes a decedent, the other owner automatically gains full ownership of said property. As such, it is not part of the decedent’s estate. If you are the joint owner on a piece of property, and the other owner has passed away, you will need to present your bank or Secretary of State office with a copy of the decedent’s death certificate. This enables you to remove the name of the decedent from the property, car title, or account.

In some cases joint ownership can prove to be more complex than the aforementioned explanation. In terms of joint ownership on real, physical property, it may be hard to understand ownership after their death. Seeking legal help from an attorney can prove helpful when navigating property ownership after the death of a joint owner.

What’s a Simplified Processes?

An estate can be administered through a variety of ways, especially if the state does not have property attached (or in it). If you qualify for a simplified process, you will be poised to avoid the involvement of the probate court. While the overall involvement of the probate court plays a vital role to decedents and their property, a simplified process offers many benefits to beneficiaries. 

The simplified process is especially beneficial in the situation of: assignment of property, transfer of a vehicle, collection of personal property, transfer via affidavit, and the collection of money due (from an employer). The estate in question, in order to side step the probate court, must be valued at $24,000 or less, for a decedent who died in 2020, or 2021 to qualify. Every few years this dollar amount increases.

Administration in Probate Court

There are several reasons for utilizing probate proceedings after the death of a loved one. In some cases, the heirs wish to adhere to the will of the decedent, rather than follow a legal inheritance formula. This is especially true in the case of a decedent’s estate encompassing large amounts of property. Large estates are typically distributed during probate proceedings, which can range from formal to informal. The steps involved in a formal proceeding are far more in number compared to those of an informal proceeding. 

Formal proceedings may provide more oversight compared to informal ones, serving as a good solution where disputes arise. The appointment of a personal representative is a common occurrence, with formal proceedings being conducted in the presence of a probate court judge. If an aspect of the estate is being contested, it’s highly advisable to speak with your lawyer beforehand.

If you are unable to afford the legal fees associated with hiring a lawyer, consider hiring an attorney for a portion of the case, instead of the entirety. This practice is known as “limited scope representation”, and serves as a great option for those of a lower income. Alternatively, if your income is low enough, you might also qualify for free legal services. If you are searching for limited scope attorneys in Michigan, you may:

  • Contact the State Bar of Michigan Lawyer Referral Service directly, and speak with them about locating limited Scope representation.
  • Visit to the State Bar of Michigan Lawyer Search webpage. Search for a specific lawyer, such as bankruptcy, divorce, and more. Continue by choosing your city/county, and click the “Find a Lawyer” button. Scroll to the lefthand box labelled “Don’t see the filter you need? Type in your own words” and search for the phrase “limited scope”.
  • Conduct an online search for local “limited scope lawyers”.

More often than not, you may request the decedent’s estate administration to be supervised, or even unsupervised.  In some cases, administrations may require supervision, regardless of your request. In terms of a supervised administration, a chosen probate judge will review and approve various activities that influence the decedent’s estate.

An unsupervised administration is not required to endure oversight of a probate judge. In either type of administration, there are specific forms and various steps that must be used throughout the process.

An Informal Probate Proceeding

Any informal proceedings are conducted in the presence of a probate register. Typically, this type of proceeding involves fewer steps compared to a formal proceeding. Either process still carries the potential to be rather complicated, depending on the decedent’s estate and local requirements.

File the Completed Forms

In order to begin the process of informal probate proceedings, you must determine who plays the role of personal representative. If you wish to take on the responsibility for the decedent’s estate, simply complete the Application for Informal Probate and/ or Appointment of Personal Representative form. You may file the form alongside the decedent’s will (where applicable), as well as a certified copy of the death certificate (in the county probate court of the decedent’s previous residence). This requires a $175 filing fee upon document filing.

In the event of the decedent not living within the state of Michigan, and simply owning real property in MI, you must file documents within the county where the decedent’s real property is located. 

Should there be a reason to believe the decedent left behind a will within a safe deposit box, complete the Petition and Order to Open a Safe—Deposit Box to Locate a Will or Burial Deed. This will serve to ask the court to place an order for you to be permitted access.

Should the probate register approve your application, they will sign the Probate Register’s Statement. Such a statement will admit the will, appointing the personal representative. The chosen personal representative will be required to sign and file an Acceptance of Appointment form before they’re given the authority to act upon it.

There are a few other forms commonly required throughout the process, such as: Testimony to Identify HeirsSupplemental Testimony to Identify, and Nonheir Devisees in the event there is a will (which names individuals who aren’t heirs of the decedent), and Letters of Authority for Personal Representative.

Appointment of a Personal Representative

In Michigan, there are laws in place to specifically spell out the priority order of an individual capable of being appointed as a personal representative. This order works the same in the event of either formal or informal proceedings. The order (from highest to lowest priority) involves:

  • A person named, in the decedent’s will, as a personal representative
  • A surviving spouse of the decedent (if the spouse is a devisee)
  • A surviving spouse of the decedent (not a devisee)
  • The decedent’s other devisees
  • Heirs of the decedent (who aren’t devisees)
  • creditor’s nominee (who is required to wait up to 42 days after the decedent’s death to nominate someone – plus the court must locate the nominee suitable)
  • The county or state county public administrator (this person is required to wait 42 days post decedent’s death, and is used in the event of no known heir or entitled U.S. resident beneficiary)

When someone is named as a personal representative in a valid will, they are given the highest priority. This chosen individual cannot transfer their priority to another nominee. That being said, anyone else can transfer priority to nominees of the role of personal representative. Determining the suitability of the individual in role of highest priority falls to a judge alone. If this is the case, they may appoint another individual.

It’s important to note that, simply because someone is deemed a higher priority than you, doesn’t mean you are unsuitable for personal representative appointment. Their higher priority means if they challenge your priority they are more likely to be appointed than someone of a lower priority.

Serve the Notice

It is your responsibility to serve the notice on anyone who received a greater or equal right to appoint themselves as personal representative of the decedent’s estate. This may be done in person, or through the mail. Once you have completed the services, you are required to attach a Proof of Service to your personal application.

If you choose to utilize the mail, the probate court is required to wait 14 days after the initial mail date before it may act on your own application. If the address of the recipient to be served is unknown, you are required to publish the notice using a form PC 563a. Alternatively, when an in-person delivery is chosen, the court is required to wait 7 days after the notice is served before it may act on your application.

Personal Representative Responsibilities

The duties of a personal representative include:

  • Inventory Preparation
  • Paying Any Inventory Fees
  • Providing Notice to Known Creditors
  • Publishing a Notice to Unknown Creditors
  • Pay Taxes and File a Final Tax Return on Behalf of the Decedent
  • Pay any Applicable Estate Bills 
  • Pay Claims Against the Estate
  • Distribute the Appropriate Asset Remainder
  • File a Notice of Continuing Administration (if the estate remains open for over a year, where applicable)

The Michigan One Court of Justice website provides an inventory fee calculator in to enable representatives to calculate exactly how much the inventory fees may be.

Once the decedent’s estate has been administered in a probate court, any and all creditors must be given notice. This enables them to try and collect money owed to them by the decedent. Notices must be sent to known creditors, with different types of creditors receiving different priorities. Any creditors with a higher priority will be paid first.

The Personal Representative is required to serve on all interested parties, including:

  • The Notice of Appointment and Duties of Personal Representative
  • Right to Spousal Election
  • Notice Regarding Attorney Fees
  • Inventory
  • Account of Fiduciary
  • Representative notice to the Friend of the Court (filed with the Friend of the Court)
  • The Sworn Statement to Close

Any interested party involves a person who has interests in, property right in, or a claim against the decedent’s estate. This may include the decedent’s:

  • Heir
  • Beneficiary
  • Devisee
  • Creditor

Closing the Estate

There are a few things that are required to take place before an estate can be closed. This includes:

  • An estate must’ve been open for a minimum of five months
  • Publishing of required notice to creditors (at least four months prior to closing)
  • Payment of inventory fee
  • Payment of any estate and inheritance taxes (proof of payment is required)

A personal representative or interested party has the right to close the estate in either a formal or informal fashion. The subsequent steps and documents used to close an estate differ greatly, depending on whether it underwent supervised or unsupervised administration. 

Social Security Benefits

In the event of a decedent having received Social Security benefits, you must notify the Social Security Administration (or SSA) of the death. In some cases, the funeral home director may file a form on their behalf, to notify the SSA of the decedent’s death. However, you may be required to do this on your own.

You will be required to pay benefits back to the SSA if the decedent was paid benefits for the month after their death. This applies to direct deposit of benefits, as well as in the event an account has remained open. In either event, the SSA has the right to withdraw funds.

Income Taxes

Upon the decedent’s death, their estate becomes a new taxpayer for income tax purposes – a separate entity from the individual. This means the estate is required to receive an Employer Identification Number (or EIN) from the IRS. This assigned number is used on the estate’s accounts, including applicable brokerage accounts, banks, and credit unions. This EIN is also used to file a final income tax return on behalf of the decedent.

Top Probate Lawyers from The Lobb Law Firm Can Help

 

Our probate lawyers understand the many complexities associated with a Michigan probate laws. We also believe we empower our clients through a larger recovery, placing them in a better financial position as compared to working with a different law firm. We handle cases out of Southfield, Detroit, Grand Rapids, Traverse City, Sterling Heights, and Dearborn Heights and more. Contact a top injury lawyers from The Lobb Law Firm.