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An Overview of Informal Probate

Contents

    When a person dies, he or she is called a decedent. A decedent leaves property behind. That property needs to be passed on to those who will inherit it. The property could include:

    • Real estate (houses and other buildings, land and the things attached to it)

    • Personal property (furniture, cars, and other things not attached to land)

    • Bank accounts

    • Stocks and bonds

    • Debts owed to the person

    The law spells out how a person’s property must be distributed when that person dies. In Michigan, the probate courts are in charge of making sure a decedent’s estate is distributed correctly. This is called probate administration. The estate includes a lot of the decedent’s property. Some of the property is not part of the estate, and is not distributed through the probate court. The estate does not usually include:

    • Jointly owned property,

    • Insurance policies,

    • Retirement accounts, or

    • Trusts that are not established by a will.

    Jointly Owned Property

    Jointly owned property is property owned by more than one person. It is generally not included in an estate. Examples of jointly owned personal property are if you and the decedent are both listed on the title of a car or if you have joint bank accounts. When the decedent died, you automatically have full ownership of that property, so it is not part of the estate. You may want to take a copy of the decedent’s death certificate to the bank or Secretary of State office to remove the decedent’s name from the account or car title.

    However, sometimes joint ownership is more complex. If you own real property with the decedent, or if you own any type of property with the decedent and someone else, ownership can be hard to understand after a death. Read the article Jointly Owned Property  to learn more about this, or use Find a Lawyer to look for legal help in your area.

    Simplified Processes

    There are different ways an estate can be administered. If the estate does not have much property in it, you may be able to use a simplified process where the probate court is not involved at all, or only a little bit. The simplified processes are:

    • Assignment of Property

    • Transfer by Affidavit

    • Collect money due from an employer

    • Transfer a vehicle

    • Collect personal property

    In order to qualify for a simplified process, an estate must be valued at or below $22,000.00 for a decedent who died in 2014, 2015, or 2016. This number goes up every few years. To learn more about the simplified processes, read the article, An Overview of Small Estate Processes.

    Administration in Probate Court

    If a decedent’s estate has a lot of property, or the heirs  want to follow the decedent’s will rather than the legal inheritance formula, the estate will usually be distributed using probate proceedings. Probate proceedings can be informal or formal. Formal proceedings have more steps than informal proceedings. If a dispute over the will or appointing a personal representative is likely, formal proceedings give more oversight and finality than informal ones. Formal proceedings are done in front of a probate court judge. You may want to talk to a lawyer if the administration of the estate might be contested. You can use Find a Lawyer to look for legal help in your area.

    Most of the time you can request the administration of the decedent’s estate be supervised or unsupervised. However, there are some cases that require supervised administration. With supervised administration a probate judge must review and approve activities affecting the estate. Unsupervised administration does not require a judge’s oversight. There are different steps and forms used in both types of administration. To learn more, read the article Supervised and Unsupervised Probate Administration.

    Informal Probate Proceedings

    Informal proceedings are done in front of a probate register. There are less steps than formal proceedings, but the process can still be complicated.

    Complete and File the Forms

    The first step in the informal probate proceedings process is to determine who will be the personal representative of the decedent’s estate. If you want to be the personal representative, complete the Application for Informal Probate and/ or Appointment of Personal Representative form. File the form, the decedent’s will (if there is one), and a certified copy of the death certificate with the county probate court where the decedent lived. If the decedent did not live in Michigan but owned real property in Michigan, file the documents in the county where the real property is located. You must pay the $175.00 filing fee when you file the documents. If you think the decedent may have left a will in a safe deposit box, you can complete a Petition and Order to Open a Safe—Deposit Box to Locate a Will or Burial Deed to ask the court to order you be given access to it.

    If the probate register approves the application, he or she sign the Probate Register's Statement. This statement admits the will and appoints the personal representative. The personal representative must sign and file the Acceptance of Appointment form before he or she has authority to act.

    Several other forms will be needed throughout the process, including:

    • Testimony to Identify Heirs

    • Supplemental Testimony to Identify Nonheir Devisees if there is a will that names people who are not the decedent’s heirs

    • Letters of Authority for Personal Representative

    Appointing a Personal Representative

    Michigan law spells out the priority order of who can be appointed as a personal representative. The order is the same for both formal and informal proceedings. The order from highest to lowest priority is:

    • The person named as personal representative in decedent’s will

    • The decedent’s surviving spouse if the spouse is a devisee

    • Other devisees of the decedent

    • The decedent’s surviving spouse (not a devisee)

    • Other heirs of the decedent (not devisees)

    • A creditor’s nominee (the creditor must wait 42 days after the decedent’s death to nominate someone and the court must find the nominee suitable)

    • The state or county public administrator (this person must wait 42 days after the decedent’s death, and there must be no known heir or U.S. resident beneficiary entitled to share of the decedent’s estate)

    Someone named as the personal representative in a valid will has the highest priority. This person cannot transfer his or her priority by nominating someone else. However, everyone else can transfer their priority by nominating someone else to be the personal representative. A judge can find the person with the highest priority to be unsuitable and appoint someone else.

    Just because someone has a higher priority than you do to be the personal representative does not mean that you cannot be appointed as the personal representative. It only means that if that person challenges you to be the personal representative, he or she will likely be appointed.      

    Serve the Notice

    You must serve the notice on anyone who has a greater or equal right to appoint themselves as the personal representative of the estate. You can either personally serve the notice or mail it. After you complete service, you must attach proof of service to your application. If you choose to mail the notice, the probate court must wait 14 days after you mail the notice before it can act on your application. If you choose to personally serve the notice, the court must wait seven days after you complete service before it can act on your application.

    If the address of someone you need to serve is unknown, you must publish the notice using form PC 563a.

    Responsibilities of the Personal Representative

    The personal representative must:

    • Prepare an Inventory,

    • Pay the Inventory fee,

    • Give notice to known creditors and publish a notice to unknown creditors,

    • Pay the taxes and file the final tax return for the decedent,

    • Pay the bills of the estate and claims against the estate,

    • Distribute the remaining assets as appropriate, and

    • File a Notice of Continuing Administration if the estate is open for more than a year.

    When a decedent’s estate is administered in probate court, creditors must be given notice so they can try to collect money the decedent owed them. Known creditors are sent notices. Different types of creditors have different priorities. Those with higher priorities get paid first.

    The Personal Representative must serve on all interested parties:

    • The Notice of Appointment and Duties of Personal Representative,

    • Notice Regarding Attorneys Fees,

    • Right to Spousal Election,

    • Inventory,

    • Representative notice to the Friend of the Court, which is filed with the Friend of the Court,

    • Account of Fiduciary, and

    • The Sworn Statement to Close.

    An interested party is any person who has an interest in, property right in, or claim against the estate. It can include the decedent’s:

    • Heir

    • Devisee

    • Creditor

    • Beneficiary

    Closing the Estate

    Before an estate can be closed, the following must happen:

    • The estate must have been open for at least five months

    • Required notice to creditors was published at least four months prior to closing

    • The inventory fee was paid

    • Any estate/inheritance taxes were paid (proof of payment required)

    The personal representative (or if none was appointed, an interested party) may close the estate either formally or informally. The steps and documents used to close an estate differ depending on whether the administration was supervised or unsupervised. To learn more, read the article Supervised and Unsupervised Probate Administration

    Social Security Benefits

    If the decedent was getting Social Security benefits, the Social Security Administration (SSA) should be notified of the death as soon as possible. The funeral home director may file a form to tell the SSA about the death, or you may need to do this yourself.

    If the decedent was paid benefits for the month after his or her death, the benefits will have to be paid back to the SSA. If the benefits are direct deposited and the account is still open, the SSA may withdraw the funds.

    You can learn more from the SSA’s publication about stopping payments and applying for survivor benefits if you are eligible.

    Income Taxes

    When a person dies, his or her estate becomes a new taxpayer for income tax purposes, separate from the person. The estate must get an Employer Identification Number (EIN) from the IRS. You can learn more about how to get an EIN on the IRS’s website. The number that is assigned is used on any accounts in the name of the estate such as bank, credit union, and brokerage accounts.

    The EIN is also used to file the decedent’s final income tax return. You can learn about what is needed for the final tax return on the IRS’s website.