At some point in time, it becomes important for everyone to have an estate plan. That time is before you really need one. If, however, you do not have a Will or a Trust or any other kind of estate plan, here is what happens upon your death.
Any bank accounts or property in joint name goes to the joint owner
Any account where a beneficiary is named goes to the named beneficiary. Note: if a beneficiary is under the age of 18, the Court may get involved and the child may get all of the proceeds upon turning 18, sometimes a scary thought.
For anything in your name alone, the Probate Court gets involved and appoints someone to be in charge, the Personal Representative. Then, the State of Michigan has determined that for all property just in your name alone, not jointly and with no beneficiary, such property is distributed as follows:
If you are married, regardless of whether you are separated or in the process of divorce so long as you are married, everything goes to your surviving spouse if you have no children or parents surviving.
If you are married, regardless of whether you are separated or in the process of divorce so long as you are married, and have no children but do have a surviving parent, your surviving spouse gets the first $235,000 plus three-quarters of the rest of everything else. The remaining one-quarter goes to the surviving parent or parents.
If you are married, regardless of whether you are separated or in the process of divorce so long as you are married, and have children, the surviving spouse receives the first $235,000 then half the balance of everything else. Your children, whether they are children of your surviving spouse or not, divide the remaining one-half equally amongst themselves unless none of your children are children of your surviving spouse. In that case, your surviving spouse receives the first $157,000 plus half the balance of everything else and your children split the other half equally amongst themselves.
If you leave no surviving spouse and no children, your parents receive everything equally. If you leave only one parent, the surviving parent gets everything.
If you leave no surviving spouse, children or parents, your estate is divided amongst your parents’ descendants, perhaps your aunts, uncles and cousins.
If you leave no surviving spouse, children, parents or descendants of parents, your estate is divided according to your grandparents’ bloodlines.
In addition to the amounts passing to a surviving spouse or your children, Michigan Law provides for what is a called a Family Allowance, a Homestead Allowance and an Exempt Property Allowance. A Family Allowance is currently $28,000. A Homestead Allowance is $23,000. An Exempt Property Allowance is $16,000. These allowances can be paid before any of the distributions outlined above.
Probate is not the end of the world, but it can be cumbersome and, as you can see from the above, without an estate plan, or at least a Will, it is unlikely your assets are going to be distributed in the way you would choose.
You can solve all of these problems by simply taking a few hours, meeting with the attorney of your choice and getting your estate plan set up. As always, if you have questions, please feel free to contact me at firstname.lastname@example.org.