In addition to our other services, our firm can also assist you in various probate matters.

Below, please find some answers to commonly asked questions regarding probate. They are intended to provide you with "plain English" responses to common queries. Estates are almost always complicated enough to justify the professional services of an attorney to handle the probate proceedings. Attempting to probate an estate without legal assistance could be a decision that you regret.

1. What is probate?
2. Who is an heir?
3. How to open a probate estate.
4. What are the duties of a personal representative?
5. Do your surviving spouse and children have rights when you die?
6. What is an accounting?
7. Payment of creditors and taxes.
8. Distributions.
9. Closing your estate.
10. How long does probate take?
11. What does probate cost?
12. Disadvantages of probate.
13. How can probate be avoided?


1. What is probate?

Probate is the Court-supervised process of proving your will and transferring property that you own to the persons entitled to it after you die. Your probate estate includes only the property that you own in your name. Some property is not part of your probate estate, such as jointly owned property and insurance policies with a named beneficiary.

Your will describes how you want your property to be distributed. It also names a personal representative who will see that your instructions are carried out. Many people believe that by having a will, they will avoid probate, but that is not true. Having a will may make probate easier, but all property that you own in your own name must still be probated.

If you do not leave a will, then the State of Michigan will make one for you. Your estate will be distributed in accordance with the Michigan law entitled the Estates and Protected Individuals Code ("EPIC").


2. Who is an heir?

The term "heir" means a person who is entitled, under EPIC, to your property at your death. A “devisee” is a person you name in your will to receive your property. 


3. How to open a probate estate.

There are two different ways to open a probate estate.  To “open a probate estate” means to have a will admitted to the Probate Court and a personal representative appointed.

Your estate may be opened informally by filing an application with the Court. If the application is in order, the Court will admit your will to probate and appoint your personal representative without a hearing.

Or probate can begin formally by filing a petition with the Court. The Court will schedule a date for a hearing. The person attempting to open the estate must notify all "interested persons" (your beneficiaries and heirs) of the upcoming hearing and their right to be heard by the Judge. After the hearing, the Probate Judge will enter an order admitting the will (if any) to probate, determining who your heirs are and appointing a personal representative for your probate estate.

A person petitioning for formal proceedings may request that your estate's administration be supervised by the Probate Court. In general, a personal representative in a supervised administration has the same powers as a personal representative who is not supervised except that a supervised personal representative may not make any distributions until after the Judge approves them.

Generally, if all the devisees and heirs agree with the admission of the will to probate and the appointment of the personal representative, it is best to begin with informal proceedings. If it is likely that the will may be challenged or the appointment of the personal representative is contested, however, use formal proceedings to open an estate.


4. What are the duties of a personal representative?

EPIC gives your personal representative the powers necessary to administer your probate estate. Following is a list of your personal representative’s duties:

• Collect and provide safekeeping for the estate's property
• Notify creditors and pay all valid debts
• Collect any sums owed to the estate
• File claims for retirement plan benefits, Social Security benefits, and veterans' benefits
• Manage the estate's property
• Sell assets, as directed by will or required by state law, to pay estate expenses or make distributions
• Keep detailed records of all estate transactions and submit records to interested persons and/or the probate court
• Distribute assets
• File final federal income tax return of deceased person
• Choose a tax year for the estate
• File the estate's income tax returns
• File state death tax returns
• Complete and file the federal estate tax return

If everything goes smoothly, your estate may close with little or no court involvement. Unfortunately, however, things sometimes do not go smoothly. Your personal representative may want the added conclusiveness of a court order. At such times, EPIC provides for the Probate Court to settle issues of estate administration through hearings conducted before the Judge after notice to interested persons.


5. Do your surviving spouse and children have rights when you die?

Your surviving spouse and minor children have a number of special rights. For example, your surviving spouse is entitled to receive a homestead allowance of $19,000.00. (If you do not have a surviving spouse, your minor and dependent children are entitled to a homestead allowance). In addition, your surviving spouse and minor children are allowed a family allowance up to $23,000.00 for their support during the probate process. The exempt property allowance allows your surviving spouse (or children) to keep $13,000 worth of household furniture, automobiles and personal effects. In addition, your surviving spouse may have elective share rights, depending on whether or not you had a will.


6. What is an accounting?

An accounting is a statement of your personal representative’s activities as personal representative of your estate and a summary of the activities of the estate. The accounting must specify all receipts and disbursements. It must also identify property belonging to the estate. Your personal representative must prepare an accounting each year and before closing the estate. Devisees and heirs who have not yet received their entire share of the estate are entitled to copies of the accounting.


7. Payment of creditors and taxes.

Your personal representative must pay creditors who submit valid claims for payment. Your personal representative is also responsible for filing various tax returns and paying taxes.


8. Distributions.

EPIC describes the order in which estate property may be used to satisfy charges against your estate. After such charges are paid, your personal representative may distribute the remaining assets to the devisees named in your will. If you do not have a will, then the remaining assets will be distributed to your heirs in accordance with EPIC.


9. Closing your estate.

Generally, your personal representative may close an estate by filing a sworn statement stating that the personal representative has given your heirs and devisees a full accounting of the estate's administration and performed all the duties of a personal representative. If no one files an objection to such closing statement within 28 days after it is filed with the Court, the Court will issue a Certificate of Completion. If no one complains about the personal representative’s handling of your estate within one year after the closing statement is filed, your personal representative's appointment terminates.

A different closing procedure applies to formal proceedings. It requires your personal representative to petition the Court for an order of estate settlement and to notify your devisees and heirs of the upcoming court hearing. At the hearing, the Probate Court will approve the closing of your estate, if all is in order.


10. How long does probate take?

The time it takes to probate an estate depends on how complicated the estate is. Did you leave things in order? If you left piles of papers and a paper bag full of receipts, it will take more time. Other delays may occur. For example, complicated tax situations, questions of the value of certain property, the need to determine the value of and sell many assets, disputes over debts, lawsuits against the estate or difficulty finding the people who will inherit the estate may all cause delays. A lawsuit involving a challenge to your will may cause long delays. Probate can take anywhere from six months to several years. If all goes well, the average estate takes approximately one year to get through probate.

Michigan has a short form procedure for simple or small estates which is quite a bit faster than the regular probate process.


11. What does probate cost?
 
The Court imposes an initial fee to open a probate estate. That initial fee is $150. Your estate must also pay an inventory fee, which is based on the value of your probate property. For example, if the value of your probate property is $200,000.00, the inventory fee in Michigan would be $613.00. Your personal representative will pay the legal costs of hiring a lawyer. Your personal representative may choose to take a fee. There may be appraisal costs. If there is a will contest or other litigation, it is impossible to predict how much of the estate will be used up. Some disputes may consume most or all of the estate property.

12. Disadvantages of probate.

Probate has certain disadvantages. Court filings are open to the public, and privacy is sacrificed. Unscrupulous people have been known to review probate documents and prey on lonely survivors. Probate may result in delay. No estate can be closed earlier than four months following giving notice to creditors and five months after opening the estate. In actuality, the average estate spends one year in probate. Probate can be expensive. Probate requires the payment of court costs and inventory fees. Many probate estates incur attorney and personal representative fees, as well. With proper planning, however, the pitfalls of probate can be avoided.


13. How can probate be avoided?

There are several ways to avoid probate. A fully funded revocable living trust will avoid probate and has distinct advantages of its own. In addition, certain property, such as life insurance and retirement benefits, may avoid probate through proper beneficiary designations,. Joint ownership may avoid probate, but joint ownership is not without pitfalls.

This general legal information should not be treated as tax, legal or accounting advice. Every situation is different and other issues may exist. Nor should this information be used as a guide to the probate process in all situations. Please contact attorneys Marisa Petrella or Linda Hagan at mail@petrellabrown.com for additional information.