What Does "Probate" Mean?
Probate Court is required to transfer title to property if it did not transfer automatically upon death. For example, if a person owns real estate then probate court is required to transfer the title by court order unless the property owner put the real property in a trust or signed a deed while of sound mind to transfer the property automatically upon death. After a person dies or is incapacitated, that person is no longer able to sign a deed to transfer title to property. Probate is a legal court process for transferring title of the decedent's property to the persons entitled to inherit the property as an interested party. Property cannot be transferred through probate court until creditors have an opportunity to make a claim against the property.
It is very important to have a Last Will & Testament, however, a Will does not help avoid the probate process and basically provides instructions to the court about a person’s heirs and how property should be distributed. While a Will may make probate easier, it also means that the court will have to approve the Will and then follow the instructions listed in the Will for any property titled solely in the decedent's name. The Will helps the court decide which people are entitled to the decedent's estate. The probate court will help monitor the procedures, determine creditors, and then transfer title through court orders. Many other options are available if you prefer to transfer assets through estate planning procedures. Upon death, title to specific assets may transfer automatically without the need of probate. These estate planning options include designating beneficiaries, joint accounts, transfers on death (i.e. TOD forms with a bank account), recording deeds that transfer real estate upon death automatically with the Register of Deeds office, and/or establishing a revocable trust. Each option has various implications for tax planning and personal preferences that require careful consideration.
It is important to plan ahead to help avoid probate when possible for various reasons.
For example, if real estate is owned jointly with rights of survivorship, the real estate may transfer with a copy of the death certificate because it passes directly to the survivor with the deed language.
Likewise, a jointly held bank account with the right of survivorship passes directly to the survivor according to the contract with the bank with no probate required.
The beneficiary of an insurance policy receives the proceeds without the probate process because ownership is determined by the insurance contract.
An automobile owned in the decedent's name alone is an exception to this rule because of a Michigan statute which allows the Secretary of State to transfer title to a family member if there is no probate proceedings.
There are various laws in Michigan that allow for assets owned by the decedent to pass to the decedent's heirs without the necessity of the probate court process including the following.
MCL 257.236 states if the decedent’s vehicle is worth less than $60,000 then it may be transferred to an heir directly with the Secretary of State without the need for probate court. The Secretary of State requires a certificated copy of the death certificate of the registered owner and a certificate to verify the applicant is the surviving spouse or an heir of the decedent. This is accomplished by filing the papers at the Secretary of State Office.
MCL 324.80312 provides for the transfer of water craft without probate proceedings if there are no other assets requiring probate and the value of the water craft is less than $100,000. This is accomplished by filing the proper papers directly at the Secretary of State Office.
MCL 408.480 provides that an employer shall pay wages or fringe benefits for a deceased employee to the heirs of the decedent in the order of priority listed in this statute. The priority is as follows: surviving spouse, children, mother or father, or a surviving sibling.
MCL 700.3981 provides that a hospital, convalescent or nursing home, morgue, or law enforcement agency holding cash not exceeding $500 and wearing apparel of a decedent may deliver the cash and wearing apparel to a person furnishing identification and an affidavit that the person is the spouse, child, or parent of the decedent and that an estate of the decedent is not pending. These documents are given to the person holding the property and are not filed with the probate court.
Probate Questions?
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