While probate is commonly required after a Michigan death, some people want to spare their family the hassle, stress, and costs associated with this process. Probate avoidance is possible, but can be difficult to achieve effectively, unless you understand what legal tools are available to you.
Biddinger & Estelle, PC can help. Our legal team has assisted many clients in Northern Michigan and surrounding areas to pass on their assets without the need for the property to go through probate. You can give us a call at 989-872-5601 to find out more about probate avoidance, to get personalized advice on avoiding probate, and to get answers to questions you may have including:
- What are some benefits of probate avoidance?
- What can I do to avoid probate?
- How can a Northern Michigan probate avoidance lawyer help?
What are Some Benefits to Probate Avoidance?
Probate avoidance provides advantages to family members and other beneficiaries who you wish to provide with gifts after your death. Probate avoidance can also help you in protecting your assets and ensuring that your wishes for the disposition of your property are respected. Some of the benefits include:
- Reduced costs. Probate costs money. There are court fees, legal fees, and other expenditures which are necessary during the probate process. If you are able to avoid probate and allow property to transfer through other means, the money which would have been spent during probate is saved. Your loved ones can inherit an estate of larger value, since the estate assets won’t have to be used to pay probate costs.
- Eliminating the possibility of successful will contests: If your will is probated, it can be contested. It is possible that the contest will be successful and the court will decide that there is a problem with the will. The result of this is that your efforts to express your plans for the future could be invalidated. While some challenges can still be raised if you transfer property through other means (a trust can be contested, for example), these challenges are often less likely to be successful. If you’ve created and managed a trust for years, it is less likely the court will rule that you weren’t of sound mind or did not actually intend for the trust to operate as it did.
- Asset protection through a timely asset transfer. Transferring assets through means other than probate means that the assets go to their new owners more quickly. Sometimes, this is important to protect the value of assets. For example, a period of uncertainty as a business transfers during probate could reduce the value of the business by undermining the ability of the company to operate during the lengthy transition phase.
- Heirs can inherit faster. You may have beneficiaries who are depending upon your financial gifts to pay for their education or to meet other financial obligations. Transferring money to them sooner can be preferable.
- Avoiding estate recovery. Another consideration which makes avoiding probate attractive is the ability to avoid estate recovery. Estate recovery is required by the federal Medicaid program and it involves an effort on the part of a state to try to recoup money which it spent to provide Medicaid benefits to certain individuals. If Medicaid paid for nursing home care or medical expenditures for someone 55 and older, the state is generally required to try to recover funds paid out. This means when the person who received the Medicaid benefits passes away, the state could make claims and try to take money and property which was meant for heirs. If there are no assets in the estate, however, there will be nothing for the state to take as part of its estate recovery efforts. Property can safely transfer to the chosen heirs, and won’t be lost after death.
The specifics of your situation will determine what benefits come with avoiding probate, so you should talk with an attorney about whether this type of estate planning makes sense for you.
What Can I Do to Avoid Probate?
If you have decided that probate avoidance is something you wish to pursue, an attorney can help you to explore different options including trusts, pay-on-death or transfer-on-death accounts, joint ownership with rights of survivorship, and lady bird deeds.
For those whose primary concern is to transfer real estate, there is another option as well: a lady bird deed. A lady bird deed is an enhanced life estate deed that makes it possible to transfer ownership of real property outside of probate. With a traditional life estate deed, you would retain possession rights to property during your lifetime and a beneficiary would inherit the property automatically after death; however, the deed came with significant restrictions such as an inability to mortgage or sell the property during your lifetime. A lady bird deed works similarly to a life estate, but you retain the right to profit from or sell your property at any time during your lifetime. This provides much more flexibility while still offering the probate avoidance benefits of a traditional life estate.
Lady bird deeds can be a powerful estate planning tool in states where they are permitted, but you may face complications including a reluctance on the part of insurance companies to provide title insurance. An attorney can provide help in understanding how lady bird deeds work and if this is the right option for you.
These are just a few of the different ways that you can make sure property is able to be transferred outside of probate. Many kinds of investment and financial accounts can be jointly owned and/or can otherwise be set up to transfer automatically to your beneficiaries and these accounts can make it possible for the bulk of your estate to transfer outside the probate process.
How can a Northern Michigan Probate Avoidance Lawyer Help?
Biddinger & Estelle, PC helps clients in Cass City, Bad Axe, Caro, Deckerville, Reese, and surrounding areas throughout Michigan with determining if probate avoidance makes good sense in their situation. If you decide that avoiding probate through careful estate planning is something that you wish to pursue, we will assist you with making use of all of the legal tools that can make probate avoidance in Michigan possible. Because it can take time to change accounts and restructure the ownership of assets to avoid probate, it is a good idea to talk with an attorney early. Call 989-872-5601 or contact us online to speak with a member of our legal team and learn about the assistance that we can offer.