Michigan probate proceedings often take 12-24 months to complete. During that time, assets are frozen, and estate details become public record. For families seeking to protect their privacy and ensure smoother transfer of property, there are several ways to plan ahead and either avoid probate altogether or at least make it easier for loved ones to manage.
The dedicated attorneys at Law Office of Julie A. Paquette have years of experience helping families manage their estates in order to avoid probate. Here’s a breakdown of what probate is, why people try to avoid it, and the most common methods used in Michigan to keep assets out of probate court.
What Is Probate?
Probate is the legal process used to transfer a person’s assets after they pass away. If someone dies with a will, the court oversees the distribution of their property based on the instructions in that will. If there’s no will, Michigan’s intestate succession laws determine how the estate is divided..
While probate exists to protect the rights of heirs, creditors, and other parties, it can be lengthy and complicated. It also becomes part of the public record, meaning personal information (including a list of assets, debts, and beneficiaries) may be available to anyone who wants to look it up. That’s one reason many families prefer to avoid probate if possible.
Why Do People Want To Avoid Probate?
Avoiding probate isn’t about avoiding responsibility. It’s about making things easier for the people you care about. Here are some of the most common reasons people typically want to avoid probate:
- Privacy: Probate filings are public, which means details about your assets, debts, and beneficiaries can become accessible to anyone who looks.
- Time: Probate can take several months. During that time, assets may be tied up and unavailable to family members who need them.
- Cost: Probate can involve court fees, attorney fees, and other administrative costs that reduce the overall value of the estate.
- Complexity: Larger or more contested estates often require extra steps that can draw things out even longer.
Fortunately, there are ways to plan ahead and keep your estate out of probate court.
5 Strategies to Avoid Probate in Michigan
Let’s look at the most common methods used in Michigan to avoid probate. These options often work best when used in combination, depending on the type of assets you have and your family situation.
1. Create a Revocable Living Trust
A revocable living trust is one of the most reliable tools for avoiding probate in Michigan. With this type of trust, you transfer ownership of your assets into the trust while you’re still alive. You can manage those assets just as you normally would, and after you pass away, the person you name as successor trustee can distribute them to your chosen beneficiaries, without going through probate.
This is especially useful if you own real estate, have multiple beneficiaries, or want more control over how and when assets are passed down.
2. Use Beneficiary Designations
Some types of accounts and policies allow you to name a beneficiary directly. These assets pass outside of probate automatically, so they’re a simple and effective way to reduce the number of items that need court involvement.
These include:
- Life insurance policies
- Retirement accounts (like IRAs or 401(k)s)
- Payable-on-death (POD) bank accounts
- Transfer-on-death (TOD) investment accounts
Make sure your beneficiary designations are current and coordinated with the rest of your estate plan. Conflicting instructions across documents can lead to confusion and legal disputes..
3. Own Property Jointly with Rights of Survivorship
Another way to avoid probate is by owning property jointly with someone else. If the title is held with rights of survivorship, the surviving owner automatically becomes the sole owner when the other person passes away.
This is commonly used with:
- Real estate (such as a home jointly owned by spouses)
- Joint bank accounts
- Vehicles
However, joint ownership isn’t always straightforward. The title must include the correct language, and it may have tax or legal implications depending on your situation. It’s wise to get legal guidance before relying on this approach.
4. Use a Lady Bird Deed (Enhanced Life Estate Deed)
Michigan is one of the few states that allows for a Lady Bird Deed, also known as an enhanced life estate deed. This special type of deed lets you retain full control of your property while you’re alive, including the right to sell or mortgage it. Then, when you pass away, the property automatically transfers to the beneficiary named in the deed without going through probate.
Lady Bird deeds are a flexible, low-cost option for homeowners who want to transfer property while keeping full control during their lifetime.
5. Give Gifts During Your Lifetime
Gifting assets while you’re alive is another way to avoid probate. If you transfer ownership of property, money, or possessions before death, those assets don’t go through probate because they’re no longer part of your estate.
That said, it’s important to be careful with this strategy. Large gifts may have tax implications or impact Medicaid eligibility down the line. Consider consulting a professional before making significant transfers.
Contact Us Today
Avoiding probate in Michigan is possible with the right planning. Whether you use a trust, joint ownership, beneficiary designations, or a combination of these tools, the key is to take action while you’re still able to. A little preparation now can save your loved ones a great deal of time, stress, and expense down the road.
If you’re ready to explore your estate planning options or just want help understanding what’s possible, Law Office of Julie A. Paquette is here to help. Visit our estate planning page to learn more or schedule a consultation.
