If you’re wrapping up the estate of a Michigan resident who died with an estate that’s worth less than a certain dollar amount, you won’t have to go through a formal probate court proceeding.
It doesn’t matter whether the deceased person left a will; what matters is the value of the assets that they left behind. If the estate’s value is under the “small estates” limit in Michigan, you can use a simplified probate procedure, called a “summary probate.” You don’t need a court hearing in front of a judge — you only need to file simple forms and wait a certain amount of time before distributing the assets.
To determine if an estate’s value is below Michigan’s small-states limit, make a list of the assets. Include only the things that pass to heirs and beneficiaries by will or, if there’s no will, by Michigan intestacy laws (which determine who inherits what in the absence of a will).
In compute the estate’s value, don’t count:
- assets held in joint tenancy
- retirement plans
- payable-on-death (POD) bank accounts
- real estate transferred by a transfer-on-death deed, or transfer-on-death brokerage accounts, or
- insurance proceeds from a policy with a named beneficiary.
These assets don’t count towards the small-estate limit because they pass to the named beneficiaries regardless of what a will (or the Michigan-intestacy law) says.
For example, say Bob died in Michigan and owned these assets:
- A checking account with $2,178
- A savings account with $2,922
- A car with a blue book value of $6,500 (and no loan)
- An IRA with $32,000 that names his daughter and son as beneficiaries.
- A life-insurance policy worth $15,000 that also names his daughter and son as beneficiaries
You only count the bank accounts and car — $11,500 — to see if Bob is within Michigan’s small-estate limit. His IRA and the life-insurance proceeds aren’t counted because they go to his beneficiaries directly. The value of the car is included because he doesn’t owe money on it.
The value of Bob’s estate is under the Michigan small-estates limit. His son and daughter, who inherit his assets under Michigan’s intestacy laws because Bob had no will, follow this procedure:
In Michigan, you can use an Affidavit (i) if the estate does not include real property, and (ii) the value of the entire estate, less liens and encumbrances, is less than $15,000. There is a 28-day waiting period.
Mich. Comp. Laws 700.3983.
There is also a summary probate procedure for estates with a value of $23,000 or less (the value is adjusted upward each year), after payment of funeral and burial costs, or if the value of the entire estate, less liens or encumbrances, doesn’t exceed the homestead allowance, exempt property, family allowance, and costs of administration, funeral expenses, and last illness expenses.
Mich. Comp. Laws 700.3987.
Call George Law at (248) 470-4300 for more details and any assistance that you need.