A living trust is often promoted as a way to avoid probate and the costs, time delays, and loss of privacy that accompany it. Probate is the legal process for proving the validity of a person’s will after their death and appointing the nominated personal representative or executor. The personal representative is authorized by the court to administer the deceased person’s estate and is directed to ensure that their money and property are transferred to the beneficiaries specified in their will. If someone dies without a will, probate is the process by which a court determines the proper heirs and appoints an administrator who will distribute the person’s money and property as required by state law. Because the probate process can sometimes be expensive and lengthy, and the details of the deceased person’s estate may become part of public court records, many people create an estate plan designed to avoid probate by using a revocable living trust. However, there are some circumstances when a probate proceeding may still be necessary.

A Third-Party Refuses to Accept Your Affidavit

Affidavit for small estates. Michigan, and most other states, allows smaller estates (the amount depends on the state) to bypass the typical probate proceedings, or at least use a quicker and simpler probate process. In those states, after a certain number of days have passed following a person’s death, the beneficiary of a small estate may submit to a person, bank, or other institution a small estate affidavit stating that they are entitled to the money or property, along with a death certificate. The person or institution to which it is submitted can rely on the affidavit to transfer the money or property to the beneficiary. The person or institution will not be held liable if it is later revealed that the money or property was transferred to the wrong beneficiary.

Nevertheless, the person or institution may refuse to comply with the affidavit, for example, if they believe that the property they hold is worth more than the amount allowed for a small estate affidavit, or if they are aware of a dispute among the heirs of the person who died regarding the will or the property being claimed. A full probate proceeding, or lawsuit, may be necessary under such circumstances.

Last paycheck affidavit. In some states, the spouse of someone who dies may be allowed to submit an affidavit to the deceased person’s employer that allows the employer to release their last paycheck to the spouse. Some states also allow the paycheck to be released to adult children, parents, or siblings, usually in that order of preference, if there is no surviving spouse. However, there are often limits on the amount that the employer is permitted to pay to the spouse or other party outside of probate proceedings. Some states may require the spouse or family member to submit a particular form as the affidavit, but many do not, as long as the affidavit includes the necessary wording and is executed properly.

This procedure allows the surviving spouse or family member to have timely access to a paycheck that they may have been relying on to pay their bills. If the employer refuses to release the deceased employee’s paycheck, the surviving spouse or other family member may need to initiate a probate proceeding or a lawsuit to require the employer to release the paycheck.

A Personal Representative Is Needed to Represent the Estate in Court
Sometimes, a personal representative must be officially appointed to defend the estate in a court action. There may be claims or causes of action that are seen to be connected to the decedent and not their trust. In such a circumstance, the court must appoint a personal representative in a probate estate to represent the interests of the decedent, which are now seen to be owned by the estate of the decedent.

Even when all, or most of, a deceased person’s accounts and property are transferred outside of probate, a probate proceeding may still be necessary to appoint a personal representative to represent the estate in court.

A Personal Representative Is Needed to Transfer Real Estate
Some types of joint ownership avoid probate by vesting full title of the real estate in the surviving owner upon the death of the joint owner. In addition, some states allow transfer-on-death deeds (sometimes called a Ladybird deed in Michigan) that specify a new owner and immediately transfer the title of the real estate when the current owner dies. Transferring title of real estate to a trust that directs that title should be transferred to a specified beneficiary is another way to transfer real estate without probate. However, unless one of these estate planning solutions is implemented, a personal representative must typically be appointed to transfer real property in a probate proceeding.

Although there are some exceptions, many states that allow a deceased person’s personal property to be transferred to their heirs without probate via a small estate affidavit do not allow small estate affidavits to be used for real estate. If a small estate procedure is not available, a personal representative must be appointed to deal with the real estate involved.

Give Us a Call
Although it is often possible to avoid probate, probate proceedings are necessary in some circumstances. Please contact us to allow us to help you to create an estate plan that will enable you to transfer your money and property to your family or loved ones in the most efficient way possible.