By Rudy Serra – Attorney, former District Judge
THE ENGLISH NOUN “PROBATE” DERIVES DIRECTLY FROM THE LATIN VERBS PROBO AND PROBARE, which means “to try, test, prove, and examine.” The probate process means a will must be proved before the court. The earliest known usage of the English word “probate” was in 1463, defined as “the official proving of a will.
In Michigan, probate is a legal process that may be required after someone dies. The probate process provides for the orderly resolution of a person’s financial affairs after their death. The probate process addresses whether the person died with or without a will, who are the heirs, provides for the notification to creditors, the resolution of creditor claims, the orderly gathering and marshalling of assets, and their distribution. [TheProbatepro.com].
For many people, their home is their biggest asset. Real estate, of course, can be jointly-owned and some often include a provision covering who gets the house when the owner dies. Real estate can only be transferred in writing. It does not work to simply tell another person, “When I die I want you to get my house.” A will, or a document called a “trust,” are written documents and can transfer real estate.
FOR SOME TIME, MERCHANTS TOUTED THE ADVANTAGES OF A “LIVING TRUST” (a revokable intervivos trust) as a way to avoid probate after the death of a loved ones. This probably overstates the advantages of a Living Trust – but they do still have one big advantage when it comes to real estate. When an estate goes through probate, there is an “inventory fee” based on the value of the estate.
There are probate proceedings for people who own little more than a car all the way up to jury trials for estates with significant property and disagreement among heirs. If a person’s largest asset [their home] is transferred into the ownership of a Living Trust, then the “successor Trustee” becomes owner without the house going through the probate court.
The median sales price of homes in Oakland County now exceeds $200,000. A person who bought a home a decade ago may have seen their investment double or triple. One can put their real estate (including more than one piece of real estate) into a Living Trust and remove a significant percentage of their assets from the probate inventory.
Many attorneys and some on-services sell trust forms. It is possible for a person to write a valid living trust or will, without a lawyer. A will, for example, can be hand-written, dated, and signed by a person, and is considered valid even if there are no witnesses.
The numerous potential pitfalls lead most people towards seeking some level of professional guidance. Living Trusts are similar in that regard. The most common error people make with a Living Trust is obtaining and completing the Trust, but failing to draft and record new deeds so the property actually belongs to the Trust. Stating in a Trust that a house belongs to the Trust is not enough. The “chain of title” at the county register of deeds office must include a conveyance from the individual to the trust.
With proper planning, probate goes more smoothly than without.