Understanding the Michigan Probate Process

Losing a loved one is already hard enough before navigating complex legal procedures. While Michigan’s probate process exists to provide structure and oversight when handling a person’s affairs after death it often raises more questions than answers. An experienced probate attorney can help provide family members with necessary clarity.

What Are "Probate Assets"?

Only assets held in the decedent’s individual name are subject to probate. Jointly owned property typically passes directly to the surviving owners without going through probate, so it is not considered a “probate asset.” Similarly, life insurance proceeds and retirement accounts with properly designated beneficiaries are not considered probate assets so they also avoid probate. Finally, "Lady Bird Deeds" and assets in a Revocable Trust are not considered probate assets, and thus, avoid probate.

The Michigan Probate Process

Understanding which assets avoid probate is only one component: In many cases our loved ones die and some, if not all of their assets, do not avoid probate. Those assets are subject to the probate process before they may be given to the decedent’s heirs. For these assets, Michigan law outlines a specific court-supervised process designed to ensure debts are paid and property is transferred properly.

The Application

The probate process begins by filing either an Application or a Petition with the probate court and paying the required filing fees. If the decedent had a Will, the named personal representative (or “executor”) handles the paperwork. If no Will exists, the court appoints an administrator to manage the estate, almost always a family member.

While filing an Application for Informal Probate is often quicker and more straightforward, there are some cases in which a formal Petition, though more time-consuming, offers greater protection. Each situation must be carefully reviewed to determine the optimal approach.

Public Notice

After filing, a Notice to Creditors must be published in a local newspaper announcing the death and the opening of the estate. The Notice identifies the personal representative and provides specific details about the decedent. This publication often attracts creditor claims and occasional solicitations with varying degrees of legitimacy.

Inventory

The personal representative must identify and gather all probate assets, determine their fair market value (sometimes requiring professional appraisals), and file a written inventory with the court. At this point, an inventory fee, calculated based on the total asset value, must be paid. All property must be properly described, and real estate must include a complete legal description. Errors or omissions can result in personal liability for the representative.

Creditors

The personal representative must review and determine the validity of all creditor claims. Valid claims must be paid from estate funds in accordance with Michigan's priority of payment statutes. In many cases, claims can be negotiated to avoid disputes and reduce costs. Strict statutory timelines apply, and personal representatives must understand their options and obligations when addressing creditor claims.

Estate and Income Taxes

If the estate owes federal estate taxes, the personal representative must file Form 706 (United States Estate and Generation-Skipping Transfer Tax Return) and pay any taxes due within nine (9) months of the date of death.

However, in all cases an estate income tax return (Form 1041) and the decedent’s final individual income tax return (Form 1040) must be filed. As attorneys and CPAs, we possess extensive experience in preparing these returns and guiding personal representatives through the complex tax compliance process.

Accounting and Closing

The personal representative must prepare a comprehensive accounting, provide copies to all interested parties, distribute the remaining assets in accordance with the Will or intestacy laws, and formally close the estate.

Closing the Estate

The estate may be closed informally or through formal proceedings, depending on the complexity of issues that arise and the level of judicial protection desired. You must be sure that when you “Close” the estate your liability as the executor is terminated. That last thing you need is to distribute all of the decedent’s estate and money to everyone, and then later have to ask everyone for some of the money back to cover an unexpected expense (like a tax assessment or unknown debt). As your probate counsel, we guide you through each critical step of this final phase.

Responsibilities Of The Personal Representative

The personal representative manages all estate assets from the date of the decedent’s death until the estate is formally closed. Responsibilities may include maintaining and selling real estate, handling personal property (such as vehicles and household items), maintaining appropriate insurance coverage, monitoring mail, paying legitimate bills and expenses, managing bank accounts and investments, filing all required tax returns, and distributing assets to heirs and beneficiaries.

How Long Does the Probate Process Take?

Typically, probate proceedings commence within a few weeks after death. While there is no statutory deadline to initiate probate, once opened, the earliest an estate can close is four (4) months later due to the creditor claims period. In most cases, probate takes several additional months and sometimes extends up to a year or longer. Disputes among heirs, family members, or creditors can significantly delay the process.