Small Estate Affidavit Michigan: What You Need to KnowSep 21, 2023
The death of a loved one is a challenging and emotional time for everyone. However, it also marks the beginning of the legal process of probate. Probate is the process that oversees the transfer of a deceased person's assets to their beneficiaries. As a resident of Michigan, you might be wondering how much one’s estate needs to be worth to go to probate or how you avoid probate.
This blog post provides answers to these questions, plus Michigan's requirements for a small estate affidavit, exempt assets from probate in Michigan, how long you have to file for probate, the difference between supervised and unsupervised estates, and what happens if a spouse automatically inherits everything.
What Is A Small Estate Affidavit?
A small estate affidavit is a legal document that allows for transferring a deceased person's assets to their heirs or beneficiaries without probate court. Under Michigan law, the estate must meet specific requirements for a small estate affidavit to be an option.
What Are Michigan's Requirements For A Small Estate?
For those estates that are relatively small, a small estate can be a much more straightforward process. In Michigan, the person's gross estate must not exceed $27,000 (2023), and their assets must not include real property, such as a house or land.
In Michigan, a small estate affidavit is only one of three ways to administer a small estate. There are three ways to meet the requirements of the small estate process:
The small estate affidavit. This is also known as the "Affidavit Of Decedent's Successor For Delivery of Certain Assets Owned By Decedent." Find the link for the "Affidavit" document here.
A petition and order for Assignment. This is a court process and is preferred by certain financial institutions. Find the link for the "Petition" document here. Find the link for the"Order" document here.
Open a probate estate. This would most likely occur if you are unsure of the value of certain items or accounts, which happens often. You may not have access to paper account statements or the decedent's account information and would need court involvement to get the information, for example. If the estate then meets the requirements of a small estate, it can be closed as a small estate with an expedited process.
What Are Michigan's Requirements For The Small Estate Affidavit?
As part of the affidavit, the person filling out the paperwork, known as “the affiant,” must provide certain information, including the deceased person's personal information, date of death, and a list of the deceased's property and debts.
This document must be signed under oath, so honesty is paramount. If false information is supplied, the affiant may be prosecuted for perjury.
Additionally, the person must have been dead for at least 28 days, and their estate must be free of debt, excluding funeral and burial expenses only. If the estate meets these requirements, the heirs or beneficiaries can execute a small estate affidavit instead of going through probate court.
Learn more about Probate in Michigan? Click here.
What Assets Are Exempt From Probate In Michigan?
In Michigan, not all assets are subject to probate. Some assets are exempt and can be distributed to their beneficiaries without going through the probate process.
Exempt assets include assets held by a trust, joint accounts with a right of survivorship, life insurance policies and retirement accounts with designated beneficiaries. These assets pass directly to the beneficiaries upon the account holder’s death and do not become part of the deceased person’s estate.
Additionally, household goods, clothing, furniture, and family pictures are all exempt without limitations.
Does A Spouse Automatically Inherit Everything In Michigan?
Contrary to popular belief, a spouse does not automatically inherit everything in Michigan. If there is a spouse and the decedent dies with more than $27,000 in assets and also dies without a will or trust, the distribution of their assets is governed by Michigan’s intestacy laws.
If the deceased spouse did not have a will or trust AND...
If the decedent had no children or living parents, all assets pass to the surviving spouse.
If all the decedent's children were also children of the surviving spouse, the surviving spouse would receive the first $273,000 and then half of the remaining portion (2023).
If the deceased spouse had children from a previous relationship, the surviving spouse would receive the first $182,000 and then half of the remaining portion (2023).
However, if the couple held all assets jointly, probate might not be necessary as the estate can transfer the remaining property to the surviving spouse without court intervention. Additionally, a couple can create revocable living trusts to avoid probate entirely.
It’s important to discuss with your Michigan estate planning attorney how your assets will be distributed upon your death so you can avoid consequences you didn't want or intend!
How Long Do You Have To File Probate After Death In Michigan?
Michigan has no time requirement after a person dies to administer an estate. However, beginning the process as soon as possible is always recommended to avoid delays or complications.
Waiting for months or years is never recommended, as probate and estate administration can be a complex process that requires considerable documentation and paperwork, which gets more complicated as time passes.
If you’re uncomfortable with this, hiring a professional to help you navigate the process as smoothly as possible is always a good idea.
Probate Court: What Is The Difference Between Supervised And Unsupervised Estate?
In Michigan, two types of estate administration are supervised and unsupervised. The small estate process typically falls outside of both, unless you must open a probate estate to gain information on assets.
Supervised administration requires court approval and oversight of the personal representative's actions. This can be time-consuming and expensive but may be necessary in certain situations.
On the other hand, unsupervised administration allows the personal representative to administer the estate without court supervision unless a problem arises. This is the most common type of estate administration in Michigan because an unsupervised estate is preferred as it is typically less costly and time-consuming.
Your Estate Plan: How Do You Avoid Probate In Michigan?
There are several ways to avoid probate in Michigan. Strategies include beneficiary designations, joint ownership with rights of survivorship, revocable and irrevocable trusts, and gifts.
Creating and funding a revocable trust is one of the most effective ways to avoid probate. This option allows the estate to avoid probate while ensuring that assets pass to the designated beneficiaries. However, revocable trusts are not the most effective estate planning device for Medicaid planning.
It is important to work with an experienced Michigan estate planning and elder law attorney who has legal experience and can help you determine the best course of action for your situation.
Medicaid Planning: Why It Is Important
Estate planning is about what happens to your money and other things when you die. What it doesn't do, however, is ensure that you don't outlive your money or even that there will be any money when you die.
Additionally, if assets go to probate after death and a person needed Medicaid benefits during their life (for nursing home care, for example)., the state of Michigan can recover assets in probate in a process known as Medicaid estate recovery. This means they can take some or all of the money after death.
The most common reason you might run out of money is a lack of Medicaid planning. A great elder law attorney can help with that!
How can Michigan Estate Planning Lawyers Help With A Small Estate Affidavit?
While small estate affidavits can simplify the estate settlement process, seeking legal advice from an experienced attorney is still important.
Michigan estate planning lawyers can ensure that all the requirements are met and that the affidavit is executed correctly.
Additionally, an estate attorney can provide guidance and representation if disputes among heirs or potential creditors exist. Finally, an attorney can advise on tax implications such as estate or income taxes and help you avoid mistakes that could result in negative financial consequences.
Importance of Estate Planning
Estate planning is crucial to ensure that your loved ones are taken care of and that your assets are distributed according to your wishes. This process can seem overwhelming, but an experienced estate planning attorney can help you navigate the process and create a plan that works for you.
Speaking with an experienced estate planning attorney is important to determine if a small estate affidavit is right for you. Regardless of the size of your estate, it’s essential to have a plan in place to protect your assets and provide for your loved ones.
Learn more about estate planning today!
Contact Michigan Estate Planning Attorney Nicole Wipp Today
Small estate affidavits can be a helpful tool for distributing assets to beneficiaries without probate in Michigan. However, they may not be appropriate for every situation.
Understanding what assets are exempt from probate and how Michigan’s intestacy laws work can also help you make informed decisions about your estate plan. No matter your age or estate size, having an estate plan to safeguard your assets and provide for your loved ones is better than letting the government control what happens.