When you die, some of your estate may go through a court process called probate, which manages, settles, and distributes your property. The probate process is governed by state law.
The effect of a will
If you have a will, your property is distributed according to the terms of your will.
If don’t have a will, the property that passes through probate will be distributed according to Michigan’s intestacy laws.
What part of your estate doesn’t go through probate?
Not all of your estate will pass through probate court. An estate plan can be designed to limit the assets that go through probate or to avoid probate altogether by designating beneficiaries for those types of assets that allow them, such as IRAs, retirement plans and life insurance; by owning property jointly with rights of survivorship; by putting property in a trust; and by making lifetime gifts.
Pros and cons of probate
- The time and costs involved are often modest, and it doesn't make sense to plan to avoid it.
- You have assurance that your wishes will be followed by your personal representative.
- If a family disagreement arises, the court will settle the dispute.
- Probate offers some protection against creditors. As part of the probate process, creditors are notified to make their claims against the estate in a timely way. Otherwise, it’s hard for them to make a claim later on.
- Probate can be slow, and can take or several years if your estate is complicated or an heir contests your will.
- Probate can be costly if there are complex issues about its administration or distribution of assets (for example, if you own property in several states).
- Probate is public, not private. Your will and other documents become part of the public record, something to consider if you or your family members have privacy concerns.