Not every asset owned by a deceased individual is subject to probate in Michigan. Certain assets include automatic transfer mechanisms that allow them to pass directly to a named beneficiary, bypassing the formal, court-supervised probate process. Other assets, however, must undergo probate before they can be legally distributed. Understanding which assets are and are not subject to probate is crucial for effective planning, minimizing delays, and easing the burden on surviving family members. Please continue reading and reach out to our experienced Washtenaw County Probate Attorneys for guidance.
What is Probate, and Why Do Only Some Assets Go Through It?
Probate is the court-supervised legal process required to settle a deceased person’s estate. This typically involves proving the validity of a will (if one exists), inventorying the deceasedperson’s property, settling all outstanding debts and taxes, and finally distributing the remaining assets to the rightful heirs or beneficiaries. In Michigan, however, probate does not apply to all assets; it generally only covers property owned solely by the decedent with no designated beneficiary or automatic transfer mechanism.
To clarify what is subject to the probate process, assets are divided into two main categories: “Probate Assets,” which have their own built-in the decedent’s name with no joint owner or benefiicary, and “Non-Probate Assets,” which have their own built-in transfer mechanisms such as joint ownership, valid beneficiary designations, or special deeds, enabling them to bypass the court process and pass directly to the co-owner or named individual.
What Assets Usually Go Through Probate in Michigan?
In Michigan, certain types of assets must pass through the legal process of probate. This is usually required when the asset’s ownership or beneficiary is not clearly established to transfer automatically upon the owner’s death. Assets that go through probate include:
- Real Estate Owned Solely
- Bank Accounts Lacking a Co-Owner or Beneficiary
- Investment and Brokerage Accounts Without Beneficiary Designations
- Personal Property and Titled Assets Without Automatic Transfer
- Business Interests Held Personally
What Assets Do Not Go Through Probate in Michigan?
Assets that typically avoid the probate process are those with built-in mechanisms for transfer upon the owner’s death. These non-probate assets include:
- Jointly Owned Assets with Right of Survivorship:
- Accounts with Payable-on-Death (POD) or Transfer-on-Death (TOD) Desginations
- Life Insurance Policies with a Named Beneficiary
- Retirement Accounts (401(k)s, IRAs, 403(b)s) with Designated Beneficiaries
- Assets Transferred by “Lady Bird” (Enhanced Life Estate) Deeds)
As you can see, probate depends on asset titling and automatic transfers. Proper planning simplifies matters for heirs. A Washtenaw County probate attorney at Collis, Griffor, & Hendra can advise on probate-avoidance strategies. Connect with our legal team today to schedule a consultation.