When someone dies, there’s this common assumption that everything goes through probate. It doesn’t. Michigan law actually lets certain types of property transfer directly to beneficiaries without any court involvement. Understanding which assets avoid probate can save your family time, money, and a lot of unnecessary stress during what’s already a difficult period.
Property With Named Beneficiaries
This is the simplest method. You name specific people to receive the asset when you die, and that’s exactly what happens. Think about:
- Life insurance policies
- Retirement accounts like 401(k)s and IRAs
- Payable on death bank accounts
- Transfer on death investment accounts
These assets go straight to the people you’ve named. The probate court never sees them. But here’s what trips people up. You’ve got to keep those beneficiary designations current. Life changes. People get divorced, remarried, or have falling outs with family members. A Pontiac probate lawyer sees this all the time. Someone forgets to update their 401(k) beneficiary after a divorce, and guess who gets the money? The ex-spouse.
Jointly Owned Property
Michigan recognizes several forms of joint ownership that bypass probate entirely. Joint tenancy with rights of survivorship is the most common. One owner dies, and the surviving owner automatically becomes the sole owner. This works for real estate, bank accounts, and vehicles. Most married couples own their home this way. When one spouse passes away, the other doesn’t have to go to court to keep living in their house. The transfer happens automatically. There’s also tenancy by the entirety. It’s only available to married couples in Michigan, and it works similarly to joint tenancy but includes some additional legal protections against creditors.
Trust Assets
Property you’ve placed in a revocable living trust won’t go through probate. When you create one of these trusts, you’re transferring ownership of assets into the trust’s name. You still control everything during your lifetime, but when you die, the assets pass according to what the trust document says. At Gudeman & Associates, P.C., we help families understand how trusts fit into their overall estate plan. They require proper funding and ongoing maintenance. But the probate avoidance benefit alone makes them worth considering for many people.
Transfer On Death Deeds
Michigan allows these for real estate, and they’re becoming more popular. You record a deed naming who gets your property when you die. That’s it. You keep complete ownership and control while you’re alive. You can change your mind anytime and revoke or modify the deed.
When you die, the property transfers to your named beneficiary. No probate court. No delays. It’s a straightforward tool for people who want to keep their home out of probate without setting up a trust.
Small Estate Procedures
Michigan offers simplified procedures for smaller estates. This technically involves the court system, but it’s not full probate. The process moves faster and costs less than traditional probate administration. Under Michigan Compiled Laws Section 700.3982, estates with assets totaling $27,000 or less can qualify for a small estate affidavit procedure. That threshold excludes certain exempt property and liens.
What Still Goes Through Probate
Assets you own solely in your name with no beneficiary designation typically require probate. Real estate titled only in your name needs court involvement. So do bank accounts without POD designations. Personal property like vehicles, furniture, and jewelry usually go through probate too. Business interests often require probate unless you’ve made specific arrangements beforehand. The same applies to any asset where you own a percentage but not as a joint tenant with survivorship rights. Even a partial ownership stake can create probate issues if it’s not structured properly.
Why This Matters For Your Estate Plan
Knowing which assets avoid probate helps you plan more effectively. You might discover that most of your property already transfers outside probate, or you might realize you need to make some changes to protect your family from unnecessary court proceedings. Every family’s situation is different. The strategies that work perfectly for one estate might not fit another at all. Working with a Pontiac probate lawyer gives you clarity about your specific circumstances. If you need guidance on structuring your assets or you’re dealing with an estate right now, professional legal advice can make the difference between a smooth transition and months tied up in court.
