Probate is a court process which manages the details of your loved one’s estate. It ensures that the decedent’s debts are paid, and that assets have been properly transferred to the rightful beneficiaries. This will be done according to the laws of the state, and hopefully, the wishes of the deceased.
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Simply put, an estate is all the money, property and all other assets owned by an individual. At death, this estate may need to be “settled” under the supervision of Probate Court.
• Depending on the size of the deceased’s estate, probate will be necessary, regardless of whether there is a will or not.
• If your loved one had a small estate, check with the County Probate office in the deceased’s state of residence. Most states have a small estate procedure that you can use without going through a full probate procedure. A small estate affidavit can be used in Michigan for estates that do not involve real property, and the amount of their personal property is less than a State defined amount, currently $20,000.
• If the deceased had no assets or titles to their name, probate is not necessary.
• Any real or personal property that is jointly owned, or held in a Living Trust.
• If there are life insurance policies or annuities with designated beneficiaries, probate is also not required. This includes IRAs and 401(k) plans.
• However, if beneficiaries are not designated or a beneficiary has died before the insured, the proceeds will, more than likely, be paid to the estate…which means Probate oversight.
• The will, if there is one, needs to be verified by the court.
• The court will appoint an Executor (Administrator) to act as the estate’s representative. This person is accountable to the courts to show proper distribution of the assets in the estate.
• An Inventory of assets and debts need to be presented by the Executor to the court.
• If necessary, appraisals of non-cash assets will be arranged by the Executor. These items may need to be sold.
• Creditors will be notified of the Probate proceedings, as well as beneficiaries.
• The estate will be responsible for payment of valid claims by creditors
• The Executor will provide a financial accounting to the court, showing receipts paid, as well as income received. Final income taxes, estate taxes and gift taxes must also be paid, if applicable.
• Remaining assets will be distributed to beneficiaries according to the Will; or if no Will exists, according to State law.
• Closing the Estate requires the filing of any remaining paperwork with the court, and a request from the Executor to be released from duty. When satisfied, the court will officially close the estate.
• The Probate process can take months, and in some instances years to complete.
Depending on the size of the estate, and/or the complexity of family dynamics, you will want to consider hiring an attorney who specializes in settling estates. If there is a surviving spouse, you will also want to consult with an attorney to make sure that moving forward a proper estate plan is updated and in place.
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