Sometimes in life, seemingly complex or difficult problems can actually have fairly simple solutions. The same can be true in estate planning and probate matters.
While you may have heard that establishing a trust, owning property jointly with another person, or identifying transfer-on-death beneficiaries are ways to avoid probate administration, what happens if a loved one passes away without having taken advantage of any of these non-probate options? Does that mean you will be relegated to a full-blown probate administration to transfer your loved one’s assets?
Options for Probate Administration of Property
The answer to this question is, “not necessarily”. You may have options short of a probate administration, at least for certain assets. Here are some examples:
- Earned but unpaid wages and fringe benefits that are due a deceased employee are to be paid by a Michigan employer to the deceased employee’s surviving spouse, children, mother or father or siblings, in that order, unless the employee had previously identified a designee in writing filed with the employee’s employer.
- Income tax refunds may be claimed without probate using IRS or Michigan form 1310.
- Cash up to $500 and clothing held by a hospital, convalescent or nursing home, morgue or law enforcement agency may be delivered thereby to an individual who presents identification and a sworn statement indicating that the individual is the decedent’s spouse, child or parent and that a probate estate has not been applied for nor opened.
- Motor vehicles with a combined value of $60,000 or less, when the owner leaves no other property requiring the appointment of a Personal Representative in a probate administration, may be transferred by the Michigan Secretary of State to the surviving spouse or an heir of the vehicle’s owner. The owner’s death certificate and a properly completed Certification From the Heir to a Vehicle are required, as is as an additional certification if one of several children of the owner makes a claim. You should be prepared to pay in full any lienholder as part of the transfer.
- When the owner leaves no other property requiring the appointment of a Personal Representative in a probate administration, watercraft with a combined value not exceeding $100,000 may be transferred by the Michigan Secretary of State to the surviving spouse or an heir. Like motor vehicles, you must be prepared to pay any lienholder in full to complete the transfer.
- Personal property less than $23,000(this is the 2018 figure, net of liens and encumbrances) may, after 28 days following a decedent’s passing, be transferred to a decedent’s successor who presents a death certificate and a properly completed Affidavit of Decedent’s Successor for Delivery of Certain Assets Owned by Decedent.
- Court ordered distribution for property less than $23,000(again, this is the 2018 amount for the total value of the decedent’s real and personal property remaining after payment of funeral and burial expenses) may be obtained using a relatively short Petition and Order for Assignment filed with the Probate Court. The criteria for the Affidavit (see previous item) versus the Petition overlap significantly but not entirely, but if an estate satisfies the criteria for using the affidavit procedure or this petition procedure, no person, other than the court, may require the use of one procedure over the other.
If assets exceed the above thresholds or criteria for the above options cannot be met so that a full probate administration is required, you may still have options for a relatively short administration.
Much Is at Stake
Mistakes in the process or the failure to take action can have serious tax and ownership implications. If you are faced with a situation where probate administration may be required to transfer assets, please contact the attorneys in Kreis Enderle’s Estate Planning group – we can discuss available options with you and guide you through the probate process if necessary.