Wednesday, September 21, 2011

Small estates

After the filing of a petition in probate court, a personal representative is appointed and given the task of marshaling the assets of the estate, providing for allowances to family, identifying and paying creditors, and distributing estate assets to beneficiaries. The term "estate" simply means the assets and property that belonged to the decedent that did not pass to others by law.

There are simplified administration processes and non-probate alternatives for those estates with very limited assets.

Small estate administration - Under section 3982 of the Estates and Protected Individuals Code (EPIC), if the total assets are less than $21,000 (current amount, annually adjusted for inflation) after payment of funeral and burial expenses, a family member may file a Petition and Order for Assignment and may distribute the funds to the spouse or surviving heirs. No estate is opened and there is no administration, so this method cannot be used to follow the directions under a will. If the recipient is a spouse or minor child, no creditor may assert a claim. For other recipients, the funds are subject to claims of the decedent's creditors for 63 days after the order is entered.

Summary administration - Under section 3987, if the total of the homestead allowance, family allowance, and exempt property allowance, plus funeral costs and the costs of the last illness, exceeds the amount of the decedent's probate assets, distribution may be done immediately after the estate is opened. The personal representative does not have to give notice to creditors. The estate may be distributed immediately and a closing statement filed with the court.

The following do not require any probate court filing.

Sworn statement - If no probate proceedings have been filed because of limited assets, the person who is the successor of the deceased may submit a sworn statement to establish that no probate proceedings have been filed, that the total value of the estate is less than $20,000, that the assets do not include real estate, that 28 days have elapsed since the death, and the names and addresses of all persons entitled to the property. This statement may be submitted to any person having custody of the decedent's personal property or who is "indebted" to him, including a bank or other financial institution. On receipt of the sworn statement and the death certificate, the custodian must deliver the property to the successor. No probate proceedings are required. The custodian may not refuse to follow this procedure. Section 3983 of EPIC.

Motor vehicles and boats - If there is no probate filing, the Secretary of State will transfer the title of any motor vehicle or boat registered to the decedent to his family. This title transfer process is subject to limits of
  • $60,000 in value for all motor vehicles, MCL 257.236(2)
  • $100,000 for all boats and watercraft, MCL 324.80312(3)
Personal effects - A hospital, nursing home, or law enforcement agency is authorized to release a decedent's clothing and property worth up to $500 to a spouse or other family member on a showing that no probate proceedings have been commenced. Section 3981 of EPIC. 

Decedent's pay - The final wages or salary payable to a decedent may be paid to his or her spouse, children, or other surviving family under MCL 408.480. 

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