Probate is the process by which a court facilitates the distribution of a deceased person’s assets. Unfortunately, however, the probate process is often long, expensive, and confusing. Therefore, one of the primary goals of estate planning for most people is the avoidance of probate. In this article, we discuss some of the ways to avoid probate in Michigan.
Living Trusts
A living trust is a legal document that places your assets in trust for your benefit during your lifetime, and it details where you'd like these assets to go upon your death. To create a living trust, you must create a trust document and name someone to act as trustee after your death. Next, you must transfer ownership of the property you wish to place in the trust to yourself as the trustee. After you’ve done this, the property will be subject to the terms of the trust, and your successor trustee will distribute it to the trust’s beneficiaries after your passing without the involvement of the probate court.
Joint Ownership
If you own property jointly with another person, and this ownership includes the right of survivorship, then the property will automatically pass to the surviving owner when the other owner passes away. Property that is transferred in this manner doesn’t have to go through the probate process. In Michigan, the following forms of joint ownership are available:
- Joint tenancy: Property that is owned in joint tenancy automatically passes to the surviving owner or owners when one owner dies
- Tenancy by the entirety: This type of joint ownership is similar to joint tenancy, except it is only available to married couples
Payable-on-Death Designations
In Michigan, a party can add a payable-on-death (POD) designation to certain types of accounts. When a person does so, he or she still controls all the money in the account, and the account’s beneficiary has no rights to the funds while the owner of the account is still alive. Upon the owner’s death, however, the beneficiary can claim the money directly from the bank without going through the probate court.
Transfer-on-Death Registration
In addition to adding a POD designation to a bank account, Michigan allows for the registration of stocks and bonds in transfer-on-death (TOD) form. When a person registers an account in TOD form, the beneficiary he or she names will inherit the account automatically upon the account owner’s death. Like the other estate planning instruments in this list, this type of transaction doesn’t require probate.
Contact a Michigan Estate Planning Attorney
If you want to help your family avoid the time, cost, and expense associated with the probate process, you should contact an experienced Michigan estate planning attorney for assistance. At Keating Law, PLC, attorney Thomas Keating will utilize his over two decades of estate planning experience to craft an estate plan that addresses the unique needs of you and your family while taking the steps necessary to avoid the probate process. Please contact us today to schedule a free initial consultation.