Probate is defined in Michigan as the court process by which certain limited situations are dealt with. Those situations include things like, how someone’s assets are passed on to their heirs or others when they die, who is appointed as guardian or conservator for a minor child or incapacitated adult and care and treatment of other legally disabled individuals.
In Michigan, when it comes to dealing with a decedent’s assets, the process can be a informal process where there is a minimum of court appearances, but usually a lot of paperwork that must be filed with the probate court, or it can be a more formal process with related paperwork where the parties and attorneys have to appear before a judge in open court for many of the steps required. The first thing that typically happens, in either case, is that someone is going to be named as the “personal representative” to be responsible for the administration of the estate. The personal representative is going to be the person responsible for gathering up all of the assets of the deceased, paying off all the final bills and then distributing what’s left to the people who are named in the will or the people who will receive the remainder under the intestate laws of Michigan, if there is no Will.
The time required for the probate process varies from estate to estate and it depends a lot upon whether or not there are going to be any disputed issues in the probate process or whether or not somebody is going to contest the Will or the distributions in it. It also depends on whether or not there are a lot of creditors who may file claims against the estate because they didn’t get fully paid before the decedent died. The probate court has the responsibility for overseeing most of the steps necessary to complete the administration of the estate, from beginning to end.
Probating an estate is not going to be required in every case. The cases where probate is necessary that I see most often are probably the widow or widower whose spouse has passed away some years ago and they’ve never bothered to update their old estate plan which was made when they were both still alive with minor children. When the surviving spouse passes away, their name is the only name left on the assets that were jointly titled. Thus, there is no longer a living person who owns those assets. One of the major causes of the need to probate an estate is when somebody dies and their name was the only name on all of their assets. The job of the probate court, in that case, is to determine who owns the assets of the deceased. The court will determine that based upon whether or not there is a will and what the will might say, or whether or not there are heirs who will inherit under the intestate laws of Michigan.
Many times, even though people plan to avoid probate, there will be assets that come along later on, or that they don’t know about, that are going to have to go through probate. It is critical to keep your estate plan updated.
It’s not uncommon to run into a situation where somebody has been working for a long time for a large company and they bought a life insurance policy when they were first hired, and on which they never bothered to change the beneficiary, or even name a beneficiary.
I just had a case recently where that happened and the lady had named her mother as her sole beneficiary, probably decades before she was married and had children. This probably happened when she was hired in after high school or in her early twenties, and later on she forgot about the policy. Even though the deceased did some planning and a will, she just never even thought about that whole-life insurance policy. So when the policy was discovered by her children after her death, the sole beneficiary was deceased and the proceeds of that policy were required to go through the probate court before they could pass to her surviving children. Depending on the life insurance company, the company may have default rules that tell the client how the benefits will pass if the sole beneficiary does not survive the insured, but many times the benefits will have to pass through probate first. This could have been avoided if the mother had only remembered to change the beneficiary on her policy.
The probate process is not as bad as people think. I think a lot of the horror stories that still remain are from the “old days” when Michigan had substantially different probate laws and the probate process took so long because of the need to go before a judge for almost everything you needed to do, and the years that it would take to get through that process. So some of those “horror stories” are true.
The old probate laws have been replaced by new laws and the new laws are substantially different, and they are called the Estates and Protected Individuals Code (EPIC). One of the nice things about that change in the laws is that the legislature put into place a lot of processes that are much shorter and easier to go through when probate is required.
Today, all of the steps that used to require a hearing before a judge can be handled just with the proper preparation and filing of documents in what we call an informal probate process. The attorney needs to prepare the documents properly, have the client sign them, and take them into the court and file it on time. There are just a few deadlines for filing documents and, if you do that, then you never have to go before a judge at all, provided that there are no other unusual issues that come up. Even with the newer system, certain procedures and/or documents can be challenged, which will substantially increase the time and expense of administering the estate. So even under our newer system, there can be “horror stories”, but they are not as likely with the simplified processes now in place.
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