When a person in Michigan passes away, their estate typically goes through the probate process. This process involves many things, including the collection of estate assets, the collection and payment of debts and the distribution of assets. How assets are distributed in the probate process depends on many things, including whether the deceased had a Will and what terms the Will contains.
One thing worth noting is that, under Michigan law, not all assets are subject to the probate process. Some skip it. We will go over some of these assets today.
One such asset are bank accounts that have a certain type of clause attached to them. The clause in question is referred to as a transfer on death clause or a payable on death clause.
Real estate in which the deceased was one of a set of individuals who held the property as joint tenants with rights of survivorship also skips probate.
Retirement accounts and life insurance policies can also bypass probate. They do so when they contain a valid beneficiary designation.
Another class of assets that are exempt from probate are assets in a revocable trust that was formed by the deceased.
Keep in mind that this is not an exhaustive list, but just a brief overview of some of the assets that are, generally, not subject to being part of the probate process.
Understanding which estate planning devices will subject an asset to probate and which will not can be important when trying to develop an estate plan that will best serve your goals regarding what will happen after you pass away. Estate planning attorneys can provide individuals with information on this topic and others and can help them figure out which estate planning devices are best suited for meeting their goals.