Dolores M. Coulter

Attorney at Law

8341 Office Park Dr. Ste C

Grand Blanc, MI 48439

Phone:  (810) 603-0801

 Email: coulterdm@sbcglobal.net

 

 

Small Estates

Dolores M. Coulter © October 2008

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Q:      Before my mother died she added my sister and I as beneficiaries on all her accounts so her estate would not have to go through probate. However when we were going through her papers we found out that she also owned some shares of stock and had another small bank account that was just in her name.  Does this mean that we have to probate her estate?  Iím worried about the cost because the total amount involved is less than $3,000.

One of the objectives of estate planning for many clients is to avoid probate through a variety of planning techniques such as beneficiary designations, joint ownership, or the creation of a trust. The assets that are subject to probate are those that a person owns solely in their own name at the time of their death.  The probate process is the process by which legal title is transferred to the personís heirs (if they died without a will) or to the beneficiaries named in their will. Your motherís stock and the bank account will have to be probated. The time and expense involved in probating an estate depends on a number of factors, including the complexity of the decedentís financial affairs, whether someone is contesting any aspect of the estate, and to some extent on the size of the estate.  Fortunately there are special procedures for small estates such as your motherís that greatly reduce the time and expense involved in the probate process.  If the total value of the assets that are subject to probate, minus funeral and burial expenses, is less than $22,000 (for persons who died in 2016), it is possible to file a petition in Probate Court and get an order assigning the assets to the heirs on the same day. There are several requirements that must be met in order to use this procedure.

The ďPetition and Order for AssignmentĒ form is available from the probate court. The petition must be filed in the probate court for the county where the decedent was living at the time of death.  The petition should be signed by the surviving spouse, if there is a surviving spouse.  Otherwise the petition can be signed by the person who paid the funeral and burial expenses or by one of the heirs. 

The information that is required on the form includes the names and addresses of all of the heirs; their relationship to the deceased; an itemized list of the assets and the value of each asset; the amount of the funeral and burial expenses; whether the funeral and burial expenses have been paid and, if so, the name of the person who paid them. A copy of the funeral bill and, if the bill has been paid, a copy of the receipt, and a copy of the funeral contract must be attached to the petition. For real estate, the legal description must be listed as well as the street address since the form will have to be recorded with the Register of Deeds in order to transfer the real estate.  The petition must list the gross value of the real estate, not the equity value.  A tax statement showing the SEV or an appraisal must be attached. If there is no appraisal the court will use twice the SEV as the value of the real estate.  For bank accounts the petition should list the name of financial institution and the last four digits of the account number. It is very important that all of the information be complete and accurate.

In determining whether the estate is under $22,000 the funeral and burial expenses can be deducted from the total value of the assets in the estate. For example, if the value of the estate is $25,000 and the funeral and burial expenses are $8,000 then, for purposes of the small estate procedure, the value of the estate would be $17,000. 

Keep in mind that the staff at the Probate Court cannot give you legal advice.  If you have filled out the petition properly you can receive the Order Assigning Assets immediately. The Order (which is on the reverse side of the petition) will state that the assets must first be used to pay or reimburse payment of funeral/burial expenses and the balance (if any) is assigned to the surviving spouse, or if there is no surviving spouse, to the heirs. The heirs are those persons who would inherit if the decedent did not have a will.  In your case, if your mother was not married at the time of her death, her heirs are her children.  If you and your sister are her only children each of you would be entitled to one-half of the remaining assets. However if you had a sister or brother who died before your mother did and who had children,  then those grandchildren would also be considered as heirs and would divide  their parentís share.

You will need to take a certified copy of the Order to the bank to obtain the funds in the account.  As for the stock you can call the customer service number listed on the dividend statement for assistance. A brokerage firm can also assist you in transferring or selling the stock.  You may also be able to obtain the necessary forms on the website for the corporation or its transfer agent.

There are several other types of small estate procedures which we will discuss in subsequent Questions & Answers, including a procedure where the only asset in the estate is a motor vehicle.

 

 

 

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