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In general, when someone in Michigan dies owning property in their sole name (rather than jointly with someone else, or in a trust), that property must go through probate. Although the probate process is not as burdensome as many people believe, it can be time consuming. If an estate is relatively small, and there are few heirs, going through probate may feel like jumping through unnecessary hoops.
Fortunately, the State of Michigan recognizes that it makes sense in certain situations to cut through the red tape and allow the successors of the deceased person (also known as the “decedent”) to take possession of assets without formal probate.
A successor is someone who is entitled to assets under Michigan’s intestate succession law or eligible to take under the exempt property and allowances provision of Michigan probate law. A decedent’s successor will usually be a surviving spouse, adult child, or other next-of-kin.
Transfers by Affidavit After Death of a Michigan Resident
One process available to survivors of a deceased Michigan resident is the “transfer by affidavit.” A decedent might have assets held by a variety of third parties—for instance, a bank account at one bank, a CD at another, a few stocks in an investment account. The transfer by affidavit process allows the decedent’s successor to take ownership of those assets directly, without them having to go through probate.
The successor who is entitled to an asset simply presents the decedent’s death certificate to the person or entity holding the asset, along with an affidavit. An affidavit is a sworn statement setting forth certain facts. In this case, the affidavit must state:
- That it is more than 28 days since the decedent’s death;
- That the decedent’s estate does not include any real property;
- That the value of the estate does not exceed the annual cost-of-living adjustment;
- That there is no pending application for appointment of a personal representative of the estate, and no such application has been granted;
- The successor is entitled to payment or delivery of the property;
- The names and addresses of any others entitled to a share of the property, and the portion to which they are entitled.
In a nutshell, by presenting the death certificate and the affidavit to the holder of the decedent’s assets, the successor is saying: “This decedent’s estate is small and simple enough that it does not have to go through probate, and I have a legal right to this property.”
In a nutshell, by presenting the death certificate and the affidavit to the holder of the decedent’s assets, the successor is saying: “This decedent’s estate is small and simple enough that it does not have to go through probate, and I have a legal right to this property.” The affidavit must be on a form called Affidavit of Decedent’s Successor for Delivery of Certain Assets Owned by Decedent. As a sworn statement, it must be signed in the presence of a notary public.
The Michigan “Small Estates” Petition & Order Process
Sometimes, a Michigan decedent’s estate will be small enough that it is not necessary to go through the formal probate process. In these cases, an expedited “small estates” process involving assignment of assets is available. In these cases, there is no need to appoint a personal representative, nor to probate a will. At the conclusion of the process, the court issues an order assigning the estate assets to the decedent’s heirs.
An estate is eligible for this process if the balance of the gross estate, after payment of funeral and burial expenses, is less than the amount set by Michigan law. In 2020, that amount is $24,000. The decedent’s successors must give a description and value of all property in the estate. If there are any liens or encumbrances on the estate, those can be used to reduce the size of the estate.
A surviving spouse of the decedent qualifies for certain allowances under Michigan law. An heir other than a surviving spouse (or a minor child of the decedent) who receives property through the expedited small estates process may be responsible for the decedent’s unsatisfied debt. Responsibility extends for 63 days from the date of the order assigning assets, and up to the amount of the property received from the estate.
If someone other than the estate paid the funeral and burial expenses, they can present evidence of the payment to the court. If the court is satisfied with the evidence, it will order the estate property first be used to reimburse the individual who paid the expenses. If funeral and burial expenses have not yet been paid, the court will order them paid out of estate funds. Any assets left after payment of last expenses will be turned over to the decedent’s surviving spouse, or to the decedent’s heirs if there is no surviving spouse.
If you have questions about this expedited process for small estates, or about transfers by affidavit, we invite you to contact our law office for a consultation.