PROBATE.  It isn’t as bad as you fear.
by Marlaine C. Teahan
Article published in the Grand Ledge Independent, August 10, 2003.

You may have heard a nightmare story or two about Probate proceedings.  Here’s hope -- it really isn’t as bad as you’ve heard, as bad as you think, or as bad as you fear.  On April 1, 2000, the Michigan Estates and Protected Individuals Code (EPIC) took effect.  EPIC updated and streamlined the Probate process, making it a quicker and cheaper process than it used to be.

Keep in mind, however, that for many families, avoiding Probate is the preferred alternative.  A Revocable Grantor Trust (“Living Trust”) is the most flexible way to avoid Probate.  Other methods include: beneficiary designations, Transfer On Death designations, and joint ownership of assets.

I strongly suggest that you speak with an attorney about your estate planning goals.  Ask if you would best be served with a Trust, or if there is another method of planning your estate that accomplishes your goals less expensively.  If your estate (if single), or your combined estate with your spouse (if married), is over $1 million [2003 figure; for 2004-05 this number is $1.5 million, and for 2006-2008 the number is $2 million.], you need federal estate tax planning.  In that case, a Trust is usually the best estate planning option to accomplish both Probate avoidance and the reduction or elimination of federal estate taxes.

That being said, the question remains:  What is Probate anyway?  Probate is the legal process by which a person’s financial affairs are settled after death.  This process includes the payment of administration costs, taxes, debts and the distribution of any remaining assets either to devisees (beneficiaries) named in a Will or to the heirs-at-law if there is no Will.  The Probate process can take as little as 5 months but generally lasts  1 year and may take even longer if a notice of continued administration is filed.  To begin the Probate process, you should make an appointment to see an attorney and an accountant about one week after the funeral of your loved one.

EPIC has many small estate proceeding options that avoid both traditional Probate proceedings and the appointment of a Personal Representative (often called an executor).  Small estates would include:  only a paycheck or fringe benefits; only a car; only cash up to $500, clothing and personal items held by a nursing home, hospital or police agency; an estate valued at the unpaid funeral bill plus $17,000 of other assets; or an estate involving a surviving spouse and/or minor children, if the estate is valued at less than approximately $48,000 [2003 figure; for 2004 this number is $49,000.] plus the funeral bill.

The Court Register, in unsupervised administration, or a Probate Court Judge, in supervised administration, handles traditional probate proceedings.  The process is begun by the appointment of a Personal Representative (“PR”) and the determination of testacy status:  either with a will (“testate”) or without one (“intestate”).

A PR, in unsupervised administration, can be appointed by the Court Register and has the obligation of handling the entire Probate process, including accumulating the assets of estate, making an inventory, keeping interested persons advised, paying debts, and distributing assets to the devisees or heirs.

All the work of the Personal Representative can be accomplished without Court intervention.  In fact, the PR is encouraged to not involve the Court.  EPIC charges a Personal Representative to act “as expeditiously and efficiently as is consistent with the best interests of the estate” and “to proceed expeditiously with the settlement and distribution of a decedent's estate and, except as otherwise specified or ordered in regard to a supervised personal representative, do so without adjudication, order, or direction of the court.”  (EPIC Sections 3704 and 3705.)

Typically, an attorney represents a Personal Representative.  The attorney not only teaches the Personal Representative what his or her duties are and assists the Personal Representative in fulfilling those duties but also protects the Personal Representative from personal liability in probating an estate.

This is but a short overview of the Probate process, focusing mainly on unsupervised administration; please feel free to contact me for further help and information.  In addition, the Calhoun County Probate Court has a very informative website with extensive information on Probate.  Visit them at http://courts.co.calhoun.mi.us/notes000.htm.

To download a pamphlet on Probate Administration in .pdf format, click here.

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