Avoiding Probate
We’re often approached by clients who are wondering exactly how to avoid probate. Their main concern, understandably, is to spare their family from having to engage in the often complicated and stressful court process while they’re mourning the loss of a loved one.
With a deep knowledge of Michigan probate law, Collens Estate Law attorneys work with families and their beneficiaries to determine the right course of action for avoiding probate.
A number of strategies can be used to avoid probate in Michigan. The idea is to enable the easy and efficient transfer of assets to beneficiaries in the absence of court involvement. Such strategies include:
A living trust is a great way to avoid the probate process. This lets you move all of your assets such as bank accounts and real estate into a trust that you can manage as the trustee while you are alive. Upon your passing, the trust ensures the assets are distributed according to your wishes without going through probate court—which can save beneficiaries significant time and money.
This can be a smart choice for couples—whether married or not—who possess significant items together such as cars, homes, bank accounts and other high-value assets. If one person dies, the property automatically passes to the surviving owner, thereby eliminating the delays, stress, and costs of the probate process.
Getting clarity on these issues now will benefit you and your family in the long run. To get peace of mind knowing that your estate is in good hands, schedule a consultation with one of our attorneys by calling (248) 545-2500.
When it comes to avoiding probate in Michigan, both beneficiary designations for financial accounts such as investment and retirement accounts, and account designations, including Transfer on Death (TOD) and Payable on Death (POD) designations, are essentially the same. Here’s a closer look at the two:
The beauty of both beneficiary designations and TOD/POD designations is that they enable assets to transfer directly to the beneficiary while bypassing the costly and time-consuming probate process.
A Lady Bird Deed is a great way to transfer property in Michigan without having to deal with the probate process. Sometimes referred to as an Enhanced Life Estate Deed, a Lady Bird Deed lets you retain full control of your home while you are alive. Upon your death, the deed will transfer to a person that you have designated as a beneficiary.
Families can potentially avoid full probate in Michigan by keeping a small estate. Estates worth $51,000 or less (after funeral and burial fees are deducted) may qualify for an expedited probate process, which typically involves the use of tools such as an Order for Assignment or an Affidavit of Heirship. This streamlined procedure is generally quicker and less expensive than the formal probate process. Keep in mind that the dollar amount limit for a small estate can change each year. Your Collens Estate Law attorney can provide additional details.
There are many ways to bypass the probate process in Michigan. But it’s important to understand that mistakes and errors can occur that might complicate the process and cause delays. Even worse, despite your best intentions, you could still end up in probate court—the very thing you’re trying to avoid. Here are a few common pitfalls to be aware of:
Outdated Beneficiary Designations: Life changes such as divorce, remarriage, or death often create the need to update beneficiaries on bank accounts, life insurance policies, 401(k)s, IRAs, and retirement accounts, to name a few. Failing to update beneficiary designations on these accounts can lead to serious and costly implications. Assets could go to the wrong person. Even more troublesome, outdated beneficiary designations could result in there being no beneficiary at all. In this case, assets would end up in probate.
Improper Asset Titling: Asset titling simply refers to the way ownership of an asset is legally recorded. For example, an asset can be solely owned, shared with another person, or held in a trust. When it comes to estate planning, correct titling guarantees an asset will be transferred according to one’s wishes. Improper asset titling, on the other hand, can cause an asset to go through the probate process.
Relying Solely on a Will: A will is great for providing instructions on how assets should be distributed. But this doesn’t mean that said assets are kept out of probate entirely. For instance, assets such as a life insurance policy, 401(k) account, or retirement account might be designated to a beneficiary. In this case, they could bypass the will.
DIY Estate Planning: When it comes to estate planning, it’s never a good idea to go it alone. This includes efforts to avoid the probate process. For example, while the idea of developing living trust or joint ownership documents on your own might seem like a cost-effective move, it could create serious problems in the long run. The bottom line is this: without professional legal guidance, it’s easy to make costly mistakes—and there’s simply too much on the line for this to happen.
An overview of Michigan probate law and essential information for personal representatives, beneficiaries, and other persons involved in estate administration.
Navigating the probate process is never an easy endeavor—and all the more reason to avoid it by planning ahead. The attorneys at Collens Estate Law have extensive experience working with families of all sizes, with all types of assets. In the course of our journey to become one of Michigan’s leading estate law firms, we’ve learned that no two families are alike. With this all-important knowledge, we look forward to meeting with you, learning about your specific needs, and developing the best possible estate planning approach for you and your family.
Experience the peace of mind that comes with knowing your estate is in the right hands. Schedule a consultation with one of our attorneys by calling (248) 617-8643.