Our Series entitled “Should I have a trust or a will?” starts now. This will be composed of 7 informational lessons.
- What is probate?
- What do I do when someone I love has passed away?
- How do I avoid probate?
- What are the benefits and disadvantages of a living trust?
- Why do I need a Will if I have a living trust?
- What other estate planning documents do I need?
- Should I fill out on-line forms to create a trust or will?
Lesson 1: What is Probate?
In Michigan, Probate Court is the court that has the power over someone’s property after they pass away. So Probate Court is the place you go to transfer someone’s property after they have passed away.
But probate is not just a place, it is also an action. When we “probate” an estate, that means we actually process the property through the court and transfer it to the heirs through the proper channels and with notice to everyone. Heirs are people that have a right to inherit by law or by will. When probate is done properly, it is done so that people (including heirs and creditors) cannot come back later and challenge ownership to the property. So the object of probate is two fold. One is to get title to the heirs of the estate. The other is object is to clear title to the property and try to avoid later litigation over who may own it.
There is a “formal probate” where the court is involved regularly along the way and there is “informal probate”, where the court is involved, but not with as much frequency. It is left up to the person that is responsible for the estate to distribute the property and file the appropriate reports with the court. Most estates in Michigan are informally probated.
In both probate procedures, a personal representative is appointed. This person controls the money and property of the estate and is responsible to make sure it gets transferred to the heirs. In other states, this person may be called the executor. This person has a special relationship to the property of the estate and to the heirs. That relationship is called a “fiduciary relationship.” A fiduciary relationship is a relationship of trust that is governed by special laws. A fiduciary, such as a personal representative, can get in trouble if property of the estate is mishandled, either intentionally or simply because they didn’t know their duties and obligations. This person is responsible to make sure they know the rules. This person also is entitled to a fee for their services to the estate, but must account for their time. The advantage of this procedure to the heirs is that there is a sure method of accountability to them for the property of the estate. The disadvantage is that it can take some time and it does cost money to probate an estate.
Most probate procedures take about a year to complete, and some take less. Some estates do take longer if they are complicated. It is wise to have an attorney to guide the personal representative through the probate court procedure and process.
The cost of probating an estate depends on the size of the estate and it’s complexity. Sometimes people with a trust still have to have part of their estate go through probate, particularly if the trust was created or maintained incorrectly.
Next time we will be discussing the next step: What do I do when someone I love has passed away?
***This web site and article is for informational purposes only and is intended to give you, the viewer, information about the type of services provided by the Doak Law Firm. This is not intended as nor should this web site or article be used as legal advice. Your case should be specifically reviewed by an attorney. Contacting the Doak Law Firm via this web site, Facebook, Twitter, via e-mail, or via phone does not create an attorney-client relationship. An attorney client relationship can only be created by express written agreement with the Doak Law Firm. We offer a free ½ hour consultation which is no risk to you to allow you access to the legal advice you need to know the proper direction to take your case. Start there. That is the smart choice. ***