Tuesday, February 27, 2018

When to Update an Estate Plan

We advise that estate planning is an ongoing process and that our clients should not simply put documents in the drawer and forget about them. Part of that ongoing process is a need to review and, if necessary, update documents on a regular basis. Our clients often ask us, "How often should I update my documents?"

When it comes to keeping an estate plan up to date, there is no one-size-fits-all answer, because a client’s need to update documents is related to when things change in the client's life. For some clients there is a need for annual review and updating the documents to reflect changes in asset ownership, gifting to loved ones, charitable inclinations, or desires to change their beneficiaries. For other clients, for example those with young children, fewer changes may be necessary though it is important to ensure that the designees named to serve as Guardians and Trustees remain current with the people that a client wants to raise and provide for their children.
There are a number of life events that may give rise to the need for amendments or other changes to estate planning documents, including births, deaths, changes in employer/retirement, and in geographic relocation. Depending on how documents are structured and whether various life events were taken into account in the drafting of documents, any of these events can create the need for significant updates.
While most estate plans automatically take into account the birth of additional children, unless the client has designated successors, the death of a successor trustee, attorney in fact, or patient advocate means that it is time for an update. The same is true if the client simply no longer wants their original designee involved. Failure to update designees may delay or derail the administration of an estate or Trust.
As we touched on previously, in general estate planning documents do not “expire”. A Will drafted in 2018 is as good as one drafted in 1968, but documents can get “stale.” A stale document is one that has not been updated in many years and especially in the case of Powers of Attorney and Patient Advocate Designations, a stale document can make administration more difficult. Financial institutions, doctors, and others may be reluctant to follow the instructions of a designee relying on a ten year old document, worrying that the Principal may have executed a contradictory document in the interim or, because of time, may not want that person designated to exercise power. Refreshing documents regularly keeps them current with laws and helps avoid conflicts with anyone accepting the documents as proof of authority
We recommend reviewing documents at least once a year to confirm whether or not changes are necessary. When in doubt if a change is needed, an experienced estate planning attorney can provide you with the guidance you need to avoid putting yourself or your loved ones into a difficult position.

Matt and Al

Friday, February 23, 2018

You May be Owed Millions of Dollars

All right, we acknowledge that our title is more than a little click-baity, but today's blog does provide you with the tools to discover whether the State of Michigan is holding money, though probably not millions of dollars, in trust for your benefit. 

The State of Michigan, and every other State, operates a Department for tracking and maintaining Unclaimed Property. Unclaimed Property is any property that legally belongs to a known person, but the person (or company) currently in control of the property cannot locate the proper owner. This situation arises in the context of estate planning when it is impossible to locate the beneficiary of a Trust or Will, but more commonly arises when a person is entitled to a refund or proceeds from insurance policy and they cannot be located.
The process for locating and claiming Unclaimed Property is easy and rarely necessitates an attorney's involvement. The Michigan Department of Treasury maintains an Unclaimed Property website, there you can search for Unclaimed Property by last name or business name. If potential unclaimed property is located, a one-page form is all that a person needs to complete in order to initiate the process of claiming the property. Personal Representatives and Trustees may use the same website to locate property belonging to recently deceased relatives, which those representatives can then claim for the decedent’s family.
While the value of unclaimed property is generally not exorbitant, we have assisted multiple clients in making claims for abandoned insurance policies, bank accounts, and company stock that resulted in surprising windfalls for the beneficiaries. The simplicity of making a claim for Unclaimed Property means that doing so has almost no downside. The alternative to locating property that the state of Michigan is holding in for your benefit is the property will escheat to the state of Michigan, usually in three years.
We recommend that our clients take the time to search for unclaimed property approximately every year, because there are some assets, including unclaimed wages, which the State only holds for a single year. This search can be part of an annual checkup of estate planning where clients review their existing estate planning and consider whether any changes are needed to that plan based upon events that occurred in the previous year. Take a few minutes before the weekend to see if you have an unexpected windfall waiting for you.

Matt and Al

Wednesday, February 21, 2018

A Tale of Two Documents

As we discussed in previous posts, estate planning addresses more than just post-death planning. Powers of Attorney and Patient Advocate Designations allow a person to choose who has the authority to act on their behalf in the event of incapacity. It is important that all of your estate planning documents are up to date and specifically grant authority to the designee because companies seeking to protect themselves from litigation are reluctant to allow designees to act absent confirmation they are doing so in the Principal’s interest.

Nick and Paul have almost nothing in common except that both were in situations where their loved ones needed to make use of Durable Powers of Attorney in order to manage their affairs. While both families were able to act on behalf of their loved one, their experiences while making use of a Durable Power of Attorney were very different.
While Nick and Paul both had Durable Powers of Attorney, naming people to act on their behalf in the event that they became incapacitated, there were significant differences between these documents. Both men had originally done estate plans in the early 2000's, but only Paul had taken the time to regularly update his documents so that when both were incapacitated in 2015 Paul's Durable Power of Attorney was two years old while the Nick’s had not been updated in nearly 15 years.
Paul's son, who was designated as his father's Attorney-in-Fact had little trouble managing Paul's finances, including ensuring that Paul's home and bank accounts were properly funded to Paul's Living Trust. Paul's updated Durable Power of Attorney contained specific enumerated powers as well as the provisions that exculpated third parties who acted in reliance upon good faith that Paul's son had the authority to act on his father's behalf. Between these specific provisions regarding the powers the Attorney-in-Fact could exercise and the provisions for protection from liability, it was relatively easy to manage Paul's affairs during his incapacity.
Unlike Paul, Nick had not taken steps to ensure that his estate plan was up to date. Since the time Paul executed is Durable Power of Attorney, the person Paul named as his primary Attorney-in-Fact had died and Nick’s son needed to acquire additional documentation in order to prove his authority under his father’s Power of Attorney. In addition, Nick's Power of Attorney lacked significant detail with respect to the powers the Attorney-in-Fact could exercise. Instead of enumerating specific powers, Nick’s Power of Attorney only stated that his Attorney-in-Fact had broad authority to act in Nick's best interests, including a much smaller number of activities than Paul's more up-to-date documents contained.
Contrary to the relative ease with which Paul's son was able to manage his father's affairs, Nick’s son repeatedly needed assistance in establishing that the primary named attorney-in-fact could no longer act, that he had authority to act in his father's behalf with respect to particular activities, and that despite the amount of time which had elapsed since the execution of Nick’s power of attorney, no contradicting document existed. Fortunately we were able to provide sufficient assistance to keep these inconveniences from rising to the level of significantly interfering with Nick's care.
Keeping all estate plan documents up to date so that they reflect the client’s current wishes is important and not just because those wishes may change over time. Ensuring that documents provide sufficient guidance to designees and institutions allows the documents to be used efficiently and effectively when needed. While it is possible to guide designees through these matters, and we are happy to do so, it is much preferable, as with most estate planning, to know that the documents will work as intended and not encounter additional problems while attempting to cope and deal with obviously difficult circumstances.

Matt and Al

Monday, February 19, 2018

Mixer Feelings

While a great deal of an attorney’s responsibility attaches to understanding the law, in the area of estate planning an experienced attorney will also serve as a guide, counselor and mediator, assisting client's designees as they navigate complex family dynamics. It is important to communicate to beneficiaries left behind after a client has died the wishes of the client as laid out in the estate planning documents. While a beneficiary may disagree or be unhappy with the terms of the documents and what has been left for them, it is important that all beneficiaries understand the intent of the client and that arguing against it can cost all parties significant time delays and expense. Despite this process, a may still act against their own best interest and the best interest of the other beneficiaries.

Ramona was a lovely woman who had strong, but different, relationships with her two daughters, Samantha and Tammy. Ramona's relationships with her daughters reflected different hobbies that each enjoyed, and because of differences in Samantha and Tammy’s personalities, Ramona's relationships with her daughters rarely overlapped. Unfortunately, while Samantha and Tammy's different personalities allowed Ramona to enjoy time with each of her daughters, those personality differences also created deep-seated tension between the sisters.
Following Ramona's death, Tammy and Samantha were named as co-trustees to administer their mother's Trust, but unfortunately almost immediately problems began to arise. Shortly after Ramona's death Tammy went to Ramona's home and removed a number of items of personal property. In response, Samantha took steps to secure Ramona's estate planning documents, which led to rapidly escalating retaliatory actions between the women until both realized that they would be unable to continue the administration of their mother's Trust without some sort of mediator. We had represented Ramona in preparing her estate plan and, thankfully, her daughters trusted us to act as impartial arbitrators and guide them through the administration process.
Tammy and Samantha divided the administrative efforts so that their contact would be minimal and for the most part occur using us as intermediaries, which worked well until it came time to address the division of the remaining personal property. This portion of the administration grew increasingly acrimonious as Samantha and Tammy continued to argue. The argument came to a head in our offices where we met with the two women in separate conference rooms and attempted to sort out the cause of their fighting. After much discussion, it became clear that Samantha was particularly incensed by Tammy's initial removal of items from Ramona's house, including a KitchenAid stand mixer. That mixer was a particular sticking point because Samantha knew that Tammy already owned a stand mixer and therefore likely had no need for Ramona's mixer.
When we broached the subject of the mixer with Tammy, she shared with us a number of wonderful memories of her time speaking with her mother and recollected how impressed Ramona always was that the mixer she received as a wedding present held up so well over many decades of use. Tammy indicated that she hoped her mother's mixer would continue to serve her just as well and help her to remember her mother every time she baked. As Tammy shared the story, it became clear that her initial action had not been malicious, but that she never considered how Samantha might feel about the situation. The idea of a compromise began to form and we returned to speak with Samantha.
After confirming that Samantha did not share Tammy's sentimental feelings about the mixer we brought the two women together and asked Tammy to share the memories of baking with Ramona with her sister. After Tammy recounted all the years that she baked with her mother, we were able to work out an arrangement where Samantha received Tammy's mixer, Tammy kept Ramona's mixer, and the two sisters began the process of healing their relationship. While I cannot say that we created lasting peace in our time, we did at least enable the family to effectively administer their loved one's affairs.
While not all conflicts are as simple to resolve as swapping small appliances is important to recognize that often what seemed like insurmountable conflicts have their roots in relatively small transgressions and with proper assistance, it is possible to begin the healing process. An experienced estate planning attorney will do more for the family than prepare documents or go to the Probate Court. They can also help strengthen family bonds in the face of emotional difficulties.

Matt and Al

Friday, February 16, 2018

What are Will Substitutes?

A good estate plan makes the transition of assets desired by the decedent an easy process. Even in the absence of good planning, the Probate Court will attempt to follow the wishes of the deceased if it is possible to establish by clear evidence what the decease wanted to happen. Establishing that by clear evidence, when potential beneficiaries disagree about intent can be very time consuming. 

Jan had two sons, Ken and Luke. Ken has three children, while Luke never married and has no children. While Jan lived comfortably and was generally well organized but never saw the need to work with an attorney to prepare an estate plan. Instead, she made lists of items in her home that she wanted distributed to her sons, daughters-in-law, and grandchildren, and prior to her death wrote a letter to Ken and two of her grandchildren telling them what she wanted to happen to her home and money after she passed away.
While Jan had good relationships with all of her family members, she was particularly close to two of her grandchildren who lived close to her in her later years. These two grandchildren provided helped Jan a great deal so in her letter Jan indicated that, with the exception of the items she listed for each of the other family members to receive from her home, she wanted these two grandchildren to inherit her remaining assets. Following Jan's death, Ken and his family engaged our firm to assist them with the probate of Jan's estate and the enforcement of her wishes.
Since Jan never created a will it was necessary to petition the Probate Court to appoint a Personal Representative (the “PR”) for her estate and to grant that person the authority to follow Jan's wishes. Normally when a decedent lacks a formal Will the intestacy statutes control the appointment of the PR and the distribution of an estate. Michigan law also allows the submission of other writings to the probate court, including letters, as evidence of the decedent’s testamentary intent (their wishes regarding the distribution of assets after their death) for the Court to rule that those writings are to be treated as a "Will Substitute." In our Petition to the Probate Court we included copies of the letters written to Ken and both grandchildren, requesting that the Probate Court appoint Ken as the PR and authorize him to distribute Jan's assets pursuant to the wishes articulated in her letter.
While under the best of circumstances it is possible to establish a document as a Will Substitute with only a single Hearing, in this case the process was complicated by Luke's desire to have his mother's assets distributed pursuant to intestacy statutes. Under the intestacy statutes Ken and Luke, as Jan's surviving children, were entitled to divide Jan's property equally between them. Since the proposed Will Substitute would result in Luke inheriting only a small number of family photos and other personal items he had substantial incentive to question and challenge the use of that document.
As a result, in order achieve the Probate Court’s permission to make distributions pursuant to Jan's letters, we undertook a lengthy process of litigation. This process required a number of hearings and delays in the administration caused by Luke's need to represent himself after the attorney he initially hired to pursue the matter requested the court's permission to stop representing Luke. While self-representation is not uncommon in probate matters, it has the potential to increase significantly the amount of time needed to resolve the matter because the self represented party may not fully understand the actions they need to take but also because in any family conflict the emotions involved may result in parties pursuing a matter well after it is clear that they lack a chance of prevailing.
Fortunately for Jan's grandchildren, Michigan law encourages judges to consider any form of a person's expressed wishes to serve as a Will Substitute. Despite our success in achieving Jan's stated goals, it is important to note that much of the complication here could have been avoided with a small amount of proper planning. While there are few barriers to a disgruntled heir, like Luke, attempting to challenge the validity of a Will or Will Substitute, it is much easier to achieve the desired results with the proper documentation. In those circumstances, being able to present Luke with a Will articulating his mother's wishes likely would have ended his efforts to overturn Jan's wishes with significantly less effort.

Matt and Al

Monday, February 12, 2018

Planning and Writing an Ethical Will

In the last blog, we discussed ways clients can protect their beneficiaries against their own flaws and weaknesses. For those clients who are concerned that their beneficiaries have not developed what they consider an appropriate value and belief system, it is often a good idea to take a holistic approach to estate planning and discuss how to pass on "values" as well as "valuables". An "Ethical Will" is an ideal vehicle for attempting, one last time, to impart important values to beneficiaries.

An Ethical Will is a document that details a client's core values and principles and communicates that philosophy to their beneficiaries. It is not a legally binding document, but rather an expression of the beliefs, opinions and cherished memories a person does not want forgotten. It may be something as simple as things you learned from your grandparents or other relatives that you want your children to remember. It may be a reminder of important events in your life or something you learned from an experience that you want to pass on. It might also be an expression of the values to which you hope your beneficiaries will aspire. Where appropriate, we should give these life lessons a higher priority in our estate planning discussions.
Jim Stovall, author of "The Ultimate Gift", a book in which the main character passes on 12 life lessons to his grandson, has said "Giving second- or third-generation family members resources without a mental, emotional and informational foundation is like giving them a loaded weapon without instruction or caution." More of my clients are starting to feel the same way. Similarly, a bank trust officer once said to me that he thought third-generation money was the most useless. The first generation worked hard to earn the money and the second generation saw how hard their parents worked for the money and had an appreciation of it. However, the third-generation had no idea how hard it was to earn, had no appreciation for the money, and therefore rarely put it to good use.
A simple Google search of the words "Ethical Will" will provide more than enough information and examples if one wants to consider writing an ethical will. It need not be something large or formal, and may begin with simple thoughts jotted down from time to time. The website, www.ethicalwill.com, suggests some tips for writing an Ethical Will, such as:
  1. Over time, write down ideas - a few words or a sentence or two about:
    1. Your beliefs and values
    2. Things you have done to act on your values
    3. Things you have learned from others
    4. Things you needed to learn from experience
    5. Things for which you are grateful
    6. Your hopes for the future
  2. Write about important events in your life
  3. Save items, such as quotes and cartoons, that articulate your feelings
  4. Review what you collected after allowing it to sit for a time and then arrange the information into an order that makes sense to you.
While an Ethical Will may be beyond what many clients are willing to prepare, it is becoming more critical that people pass along their values before they pass along their valuables. While leaving one's tangible estate is important, it can be even more impactful to leave an "intangible” legacy.

Al and Matt

Friday, February 9, 2018

Protecting Beneficiaries Against Themselves

The next two blogs take a break from our example series to address a side of Estate Planning that can occasionally get lost in the efforts to get the best legal advantages for our clients. It is important to remember that regardless of the legal and financial benefit a client may receive from having a plan, the emotional benefits cannot be forgotten. 

As estate planning attorneys, we spend a considerable amount of time with clients discussing the “legal” topics of estate planning, such as taxation, probate avoidance, and beneficiary selection. We worry about the value and type of assets in the estate as well as ensuring that clients transfer assets properly so that documents work as intended. We work with the clients to determine who they want to receive assets, in what proportions, and the manner in which they are to receive these assets. In short, we worry about how clients’ "tangible assets" will be distributed following their death.
Sometimes, clients are open about the shortcomings or flaws of their beneficiaries and their ability to handle assets they might receive. More often, clients will initially keep their concerns to themselves, reticent about telling family secrets. In order to properly draft an estate plan that meets their needs it is important that we as professionals are able to get clients to open up about such concerns. 
Are the beneficiaries mature enough to handle large sums of money? 
Do they have problems with a rocky marriage, creditor issues, or even a drug or alcohol dependency? 
Is there a reason to exclude a particular beneficiary?
It is our job to help the client consider all of these factors in determining the distribution of their assets. 
Legally, we can assist the client with options for protecting beneficiaries against themselves and their own tendencies. Clients can establish Trusts that allow the trustee to determine how much money a beneficiary needs, or should have, at any one time. Limitations on immediate distributions can protect the beneficiary’s inheritance against creditors or being included in a divorce settlement. It is possible to include provisions to protect the beneficiary against drug or alcohol dependencies by requiring that the beneficiary demonstrate, through regular testing, that they are not engaging in their vices before the trustee makes distributions. The only limitation on what a client can do is their imagination. I once had a client who indicated that one of his son could not receive any inheritance unless the son was “not married to that woman”.  The client had his reasons for doing this, and the provision created the potential to cause significant family issues upon the client’s death, but for a time it was part of the terms of the client’s trust.
Properly drafted Wills and Trusts can ease a client’s mind that they have legally protected their beneficiaries. However, what about a client’s concern that their beneficiaries have not developed values and beliefs similar to the client that makes the client comfortable with passing on tangible valuables. If this is a concern, a client may want to discuss and consider preparing an “Ethical Will” to help point there beneficiaries in an appropriate direction. The next blog will expand upon the purposes of Ethical Wills in greater detail.

Al and Matt

Wednesday, February 7, 2018

Long Delayed Probate

One of the common complaints about the Probate process is that it takes a long time. This can be true and, even more frustrating for clients, sometimes those delays are not caused by action but rather inaction. Today’s example shows how the process can drag on despite a Personal Representative’s best efforts.

When Donna’s mother, Edith, passed away, Donna hoped that everything related to Edith’s estate would be simple. Edith owned a home and had both a checking and savings account. Edith had also taken the time to write out a simple form Will, leaving everything she owned to Donna, and have this Will witnessed and notarized as required by Michigan law. By any estimation this was to be a simple Probate and we were happy to assist Donna in completing it. Unfortunately, Donna and Edith had one problem-- they had not anticipated, Edith’s son Frank. 
Frank had not been active in his mother’s life and therefore Edith had chosen to make Donna the sole beneficiary and Personal Representative under her Will, leaving nothing to Frank. However because of the rules of Probate administration, Donna was required to give Frank notice of the proceeding, which is where problems began. Under Michigan law, while an informal Probate is favored, any interested party (which includes heirs of the decedent who were excluded under Will) may Petition the Probate court to seek a formal probate. In this matter, Frank filed such a Petition challenging the validity of Edith’s Will. 
When a Probate proceeding becomes formal it means that there must be Hearings before the Probate Judge, and when the Probate court schedules Hearings it does so based on the assigned Judge’s calendar. Unless there are extenuating circumstances, such as a time-sensitive emergency, these hearings are scheduled for a date weeks in the future so that the Parties involved have time to file written information with the Court and give the other Parties involved the required Notice. When Frank caused the informal Probate of Edith’s estate to become a formal proceeding the simple process of administering a relatively small estate transformed into a saga that Donna would not soon forget. 
The first Hearing on the matter was scheduled for six weeks from the date that Frank had filled his Petition challenging the validity of the Will. During the intervening time, we prepared a Response to Frank’s Petition evidencing the proper execution of Edith's Will and provided Frank and the Court with that Response. Three days before the scheduled Hearing we received Notice that Frank had hired an attorney to represent him and this attorney had promptly filed a Motion to Adjourn the scheduled Hearing in order to have time to properly prepare. While inconvenient, this type of request is common in Probate litigation and the Court willingly allowed the delay, moving the Hearing forward four weeks. 
In the next four weeks we attempted to communicate with Frank’s new attorney, but after an initial conversation received no replies. Nothing further was filed with the Court and the day of the scheduled Hearing the attorney did not appear in Court. As a result of the missing attorney, but the presence of Frank in the Court, the Judge further adjourned the Hearing for two weeks and we provided Notice to the Attorney who finally responded to communication indicating that he had never been paid a Retainer Fee by Frank, therefore had stopped working on the matter, and had never filed an Appearance with the court. Frank unfortunately neglected to tell the Court that his attorney had “fired him”. Nearly two weeks later we received another Motion requesting an Adjournment, this time due to Frank’s illness. The matter had not yet grown to the point where the Judge felt that delay was unwarranted and the matter was delayed five more weeks. This five week delay become nine weeks when Donna needed to travel for work and then the Judge was on vacation. 
Thankfully in the interim we were able to convince the Judge to grant Donna limited authority over Edith’s Estate in order to at least maintain the status quo of the property. We had been able to provide Notice to Creditors and prepare an Inventory of the Estate’s assets. All of this was beneficial when 26 weeks later we again appeared at the Probate Court for a Hearing to discover that Frank had a new attorney, retained the prior day, requesting a further delay. Thankfully, by this the Judge was able to see the chain of events, review our Response to Frank’s initial threadbare Petition as well as the additional work done by Donna in her limited capacity, and see through all of Frank’s excuses.. 
Since Parties are entitled to due process in the Court, the Judge could not simply reject Frank’s attorney’s request out of hand, but another Hearing was scheduled for two weeks later with the caveat that no further delays would be granted in the matter. As the Hearing day drew near, we received a phone call from the newest attorney indicating that he intended to withdraw from the representation because Frank had failed to communicate further information to him that would support Frank’s claim that Edith’s Will was invalid. When the day of the Hearing arrived, Frank failed to appear in Court. 
The Judge, after a seven month delay, quickly allowed Frank’s attorney to withdraw from the matter and named Donna as Personal Representative of the Estate. Normally this would be the point where Donna was able to proceed with the remainder of the Administration without further ado, but Frank was unwilling to let the matter drop. Over the course of the following year Frank filed a number of spurious motions with the Court forcing Donna to spend substantial additional time and effort in the administration of her mother’s estate. 
The moral of this story is that in the end the right party triumphed, but that there are more efficient ways of reaching the same result. Had Edith taken the time to speak with an experienced attorney she could have learned about deeds that would transfer her home to Donna automatically at her death and been instructed to name Donna as the beneficiary of her bank accounts. These two actions, which collectively cost almost nothing, would have saved thousands of dollars in fees and hours of time because the assets would then have passed to Donna without having to go through the probate process. This is just one example of how a small amount of planning now can result in huge future savings. 

Matt and Al

Monday, February 5, 2018

Understanding Informal Probate

Our recent blogs have focused on the benefits of estate planning. As we have indicated in the past, even if an individual does not do any of their own planning, there is a default plan under Michigan law that addresses the distribution of assets in the absence of other instruction. While this is only one aspect of the Probate process, it is a good place to start a series of the examples focused how an estate plan, or lack of one, affects post-death administration. 

Alice was the wife of Bill, the mother of Carole and Don, and the grandmother of six loving grandchildren. She stayed active in her later years volunteering with a number of organizations and was well respected in the community. After her husband, Bill, passed away, she became the sole owner of all of their joint assets and never felt the need to do any additional estate planning to address the distribution of her home, bank accounts, and the IRA she rolled-over to her own IRA after Bill’s death. She never saw the need to worry about what would happen after she died. Despite Alice's lack of concern, her estate was valued at more than $500,000.00 and required a fair amount of work.
Since Alice owned all of her assets individually and did not have a Will, it was necessary to open a probate estate in order for Carole and Don to gain the authority to gain access to and manage Alice's assets. Michigan law allows for three forms of probate administration, the small estate affidavit (for states with a total value of under $20,000), the informal probate proceeding (a simplified form of probate requiring more limited involvement of the probate court), and the formal/supervised probate proceeding (used to handle any litigation involving an estate). To administer his mother’s estate, Don retained our firm to assist him with the informal probate process. 
When opening an informal probate proceeding without a Will it is necessary to provide the court with a variety of information, including the identity of all of the decedent’s heirs, the identity of the proposed Personal Representative (as well as any other individuals with equal priority to serve in that role under the law), and a statement that the person applying for the informal probate is unaware of the existence of any Will belonging to the decedent. Don’s application for informal probate requested that the court appoint him as the Personal Representative though he had equal priority under Michigan law with his sister Carole. Upon receiving the Probate Court's appointment and his Letters of Authority Don then had 28 days to inform Carole of his actions. It is at this point in the estate administration process that it is first possible for an “informal” probate to become a “formal” probate. Had Carole chosen to challenge Don's appointment as Personal Representative the Probate Court would hold a Hearing on the matter and the administrative process would, at least temporarily, transition to a formal probate.
Fortunately, Carole and Don have a strong relationship and Carole lived outside of the state, so it made sense to everyone for Don to serve as the Personal Representative negating the need for a more formal probate proceeding. As Personal Representative, Don was then obligated to fulfill certain duties, including informing any known creditors of Alice of her death, publishing a notice to unknown creditors, assembling an inventory of the estate assets and keeping the Court and Carole informed of the status of each of these actions. As he proceeded with his duties, Don also became responsible for paying Alice’s outstanding bills, closing her accounts, and eventually selling her home. After he completed these duties, Don divided the remaining assets equally between himself and Carole as required by the Michigan Intestacy Statutes. Because of the various notice requirements, the minimum time for completion is 6 months and maybe longer depending upon the types of assets in the estate
It is worth noting that not all of Alice’s assets passed through the Probate process. While inventorying Alice’s assets Don learned that Alice had designated beneficiaries of her IRA many years earlier, naming her grandchildren to receive equal shares of that account. This beneficiary designation superseded the intestacy statute because the IRA custodian was contractually obligated to pass the IRA to the grandchildren, and the court had no jurisdiction in that asset. Thankfully, all of Alice’s grandchildren were over the age of 18 so this distribution was able to happen without any additional complication. If any of the grandchildren have been under the age of 18, the Probate Court would have required that a guardianship and conservatorship proceedings be instituted to protect the interests of the minors. This proceeding would have continued until all of the grandchildren reach the age of 18, necessitating annual accountings and hearings with the Probate Court. Consider how the children would have felt if Alice had spent most of her other assets maintaining her lifestyle and the only significant asset was the IRA. Was it really Alice’s intent to essentially “disinherit” her children in favor of her grandchildren?
The probate of Alice’s estate was a relatively simple process without any conflict between heirs, without the discovery of unknown creditors, and without difficulty in distributing assets to heirs. Even with that simplicity it took nearly a year to complete the process. With a little bit of planning on Alice’s part much of the work done by Don could have been significantly simplified and it certainly would have decreased the cost in both attorney’s fees and Don’s time. We recommend that everyone put some form of planning in place, because the value of that planning is worth many times its cost. Keep in mind that estate planning is not a one size fits all process, you should take the time to work with an attorney who will assist you in preparing the plan that is appropriate for your circumstances.

Matt and Al