When a family member dies with a simple Will, or with out any advanced plan, the attorneys and staff at Smith and Mabley, PLC, can help the family understand and comply with the numerous requirements of the Michigan probate law.
An individual does not have to die for a probate procedure to be needed. Illness or aging which causes incapacity can result in the need for someone to help oversee and manage hard-earned assets. At Smith and Mabley, we help our clients navigate through the numerous requirements of Michigan probate law and court rules in establishing and administering guardianships and conservator ships. We also have the knowledge and experience to assist families from other states to probate the estate of a family member in Michigan probate courts.
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At Smith & Mabley in Farmington Hills, Michigan, we understand the emotional issues involved in the administration of an estate and any subsequent probate matters. We strive to find resolution, but do not shy away from aggressive litigation if it is in our client's best interests.
Contact an estate planning lawyer at Smith & Mabley today to learn more about probate and estate administration. You can send us an e-mail or call us at 866-975-9915. Too much is at stake when a family is in chaos over a mismanaged estate or a snubbed family member causing dissension. We can help you find legal resolution and emotional closure.
Avoiding Probate
Assets disposed of outside the probate process are part of the non-probate estate. Since a probate proceeding is not required, these assets are distributed more quickly to the appropriate beneficiaries. Many people seek out these assets and ownership models in order to save their loved ones from the difficulties associated with going through probate. If you are interested in managing your finances and your property so that your family does not have to go through probate, contact Smith & Mabley in Farmington Hills, Michigan.
Non-Probate Assets
Certain types of assets are part of the non-probate estate because of their contractual nature. These types of assets include:
- Life insurance proceeds: A life insurance policy is a contract with an insurance company that specifically states who will be paid after your death. Since payment of the life insurance proceeds to the named beneficiary is in the contract, there is no need for the life insurance policy to go through probate.
- IRAs, 401(k)s, and other tax-deferred retirement plan proceeds: IRAs, 401(k)s, and other tax-deferred retirement plan proceeds pass directly to the beneficiaries designated in the plans. Similar to a life insurance policy, the payment of the retirement fund to the named beneficiary is agreed upon in advance, and, like life insurance proceeds, there is no need to go through probate.
Ownership Models that Avoid Probate
Other types of assets only become non-probate assets if the owner or owners make certain decisions as to how those assets are held.
- Joint tenancy with rights of survivorship: A joint tenancy with rights of survivorship means that two or more owners hold title to an asset together. When one of the owners dies, that person's ownership interest automatically passes to the remaining owner or owners. Married couples typically hold assets such as real estate, automobiles and bank accounts in this way.
- Payment on Death (POD) bank accounts: Payment on Death bank accounts name contingent beneficiaries when the account is opened with the financial institution. The beneficiary possesses no ownership interest in the account until the account owner dies. At that time, the beneficiary receives full ownership of the money held in the account.
- Transfer on Death (TOD) securities: Transfer on Death stocks, bonds and brokerage accounts provide the same advantages as POD bank accounts. The account holder retains exclusive ownership rights while he or she is alive, and the named beneficiary receives the proceeds when the account holder dies.
- Revocable Living Trusts: A revocable living trust is a legal entity that holds title to property. Since the trustee for the trust, not the donor, has title to the trust, the property within the trust will pass outside probate. Because the trust is revocable, the testator has access to the property during his or her lifetime, almost as if he or she owned it outright. At the time of the testator's death, a trust document, similar to a will, directs the trustee as to the distribution of the trust property.
Although probate is avoided, holding assets jointly or with survivorship rights can create problems. For example, in the case of assets held in a joint tenancy with rights of survivorship, the owner gives up exclusive control of the assets. As a result, the owner may be at risk that the other owner will take all the assets, or that creditors of the joint owner will seek to satisfy their claims from the joint account. Experienced legal advice can help you determine the best model for your needs.
Conclusion
While non-probate assets are not subject to probate procedure, there are pros and cons to each model. To determine the best way for you to maintain your assets, contact an attorney experienced in probate and estate administration at Smith & Mabley in Farmington Hills, Michigan.
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