How to avoid probate in Michigan

Why probate is worth avoiding in Michigan

Michigan does not use a statutory percentage fee schedule. This is the clear answer: Michigan is not one of the handful of states (California, Florida, and a few others) where attorney or personal representative compensation is set as a statutory percentage of the estate. MCL 700.3719 provides that "A personal representative is entitled to reasonable compensation for services performed", a reasonableness standard, with no percentage specified. If the will fixes compensation, the personal representative may accept those terms or renounce them in favor of reasonable compensation, and a written contract between the decedent and the personal representative on compensation is binding. Attorney fees in Michigan probate are likewise governed by a reasonableness standard reviewable by the probate court, and are in practice billed hourly (commonly roughly $200–$400/hour depending on region, with metro Detroit and Ann Arbor at the high end), or occasionally by flat fee. Any Michigan attorney quoting "the statutory percentage" is describing something that does not exist in this state. Court filing fees (MCL 600.880): - General fee to commence a civil action or proceeding in probate court, including opening a decedent estate: $150 (MCL 600.880(1)). - Proceeding under MCL 700.3982 (assignment of property / small estate): $25 (MCL 600.880(2)). - Transfer by affidavit under MCL 700.3983: no court filing at all, so no fee. Expect modest add-ons: certified copies of letters of authority (a few dollars each, and banks each want one), publication of the notice to creditors in a local legal newspaper (commonly $50–$200), and recording fees at the register of deeds. The Michigan inventory fee, the cost item that blindsides families. Separate from and on top of the filing fee, MCL 600.871 imposes a sliding-scale inventory fee payable to the probate court, calculated on the value of the estate inventory: - $0–$999: $5.00 plus 1% of the amount over $500 - $1,000–$2,999: $25.00 - $3,000–$9,999: $25.00 plus 5/8 of 1% of the amount over $3,000 - $10,000–$24,999: $68.75 plus 1/2 of 1% of the amount over $10,000 - $25,000–$49,999: $143.75 plus 3/8 of 1% of the amount over $25,000 - $50,000–$99,999: $237.50 plus 1/4 of 1% of the amount over $50,000 - $100,000–$500,000: $362.50 plus 1/8 of 1% of the amount over $100,000 - Over $500,000: add $62.50 for each additional $100,000 or fraction thereof - Over $1,000,000: add $31.25 for each additional $100,000 or fraction thereof Crucially, for deaths on or after March 28, 2013, mortgage debt reduces the value of real property for inventory fee purposes, so a heavily mortgaged home costs far less in inventory fee than its market value suggests. Worked example: a $400,000 inventory yields $362.50 + 0.125% of $300,000 = $362.50 + $375 = $737.50. The inventory fee must be paid before the estate can be closed. Realistic all-in totals: - Transfer by affidavit (PC 598): $0 plus notary. - Assignment of property (PC 556): $25 filing fee plus inventory fee plus recording; often under $300 all in, even when a house is transferred. This is by far the best value in Michigan probate. - Unsupervised informal administration with an attorney: commonly $2,500–$6,000 in attorney fees for a straightforward estate, plus $150 filing, plus the inventory fee, plus publication. - Supervised, contested, or real-estate-sale estates: $7,000–$20,000+. Set against this, a lady bird deed drafted by a Michigan attorney typically runs $250–$700 and avoids the entire chain.

Minimum creditor claim period: 4 months. Under MCL 700.3801 the personal representative must publish a notice to creditors as provided by supreme court rule, and creditors must "present their claims within 4 months after the date of the notice's publication or be forever barred." Separately, the personal representative must give actual written notice to known creditors. "Known" means creditors of whom the personal representative has actual notice or whose existence can reasonably be determined by reviewing the decedent's records covering the 2 years before death, so a genuine records review is required, not a guess. Notice to known creditors must be given within the 4-month publication window, or, for a creditor discovered late, within 28 days after the personal representative first becomes aware of that creditor, whichever gives more time. A known creditor who never receives actual notice is not barred by the publication date, which is how estates get reopened. Total realistic duration: - Transfer by affidavit (MCL 700.3983): must wait 28 days after death, then usually resolved in days once the bank or employer processes it. Total: about 4–8 weeks. - Assignment of property (MCL 700.3982): no statutory waiting period; the petition can be filed almost immediately. Many Michigan probate courts sign the order within 2–6 weeks of filing, sometimes the same day at the counter. Total: typically 3–8 weeks, including the 63-day tail during which heirs remain liable for the decedent's debts. - Summary administrative procedure (MCL 700.3987): a personal representative must be appointed and an inventory filed, but creditor notice is skipped entirely, so roughly 2–4 months. - Unsupervised informal administration (the common route): the 4-month creditor period sets the floor, but the clock starts at publication, not at death, and publication follows appointment. Realistically 7–12 months for a clean estate with no real estate to sell. - With real estate to sell, a contested will, an estate tax return, disputes among heirs, or Medicaid estate recovery: 12–24 months, occasionally longer. Michigan also requires the personal representative to file a notice of continued administration if the estate remains open more than a year after appointment, which is a useful signal that an estate is dragging. Two hard outer limits worth knowing: claims not presented are generally barred 3 years after the decedent's death regardless of publication, and a Michigan decedent estate generally cannot be commenced more than 3 years after death (with narrow exceptions), after which heirs may be left relying on a determination-of-heirs proceeding instead. Families who "wait to deal with it" can lose the ordinary route.

Before death: what works in Michigan

These have to be put in place while the owner is alive and competent. In Michigan the tools available are:

• Lady bird deed (enhanced life estate deed). Michigan's substitute for a TOD deed
• Revocable living trust
• Tenancy by the entirety (married couples, real property)
• Joint tenancy with full rights of survivorship
• Payable-on-death (POD) bank accounts
• Transfer-on-death (TOD) securities registration. Epic Part 63
• Beneficiary designations (life insurance, IRA, 401(k), pension, annuity)
• Assignment of property. MCL 700.3982 (can include real estate)
• Transfer by affidavit. MCL 700.3983 (personal property only, 28-day wait)
• Summary administrative procedure. MCL 700.3987
• Unsupervised (informal) administration, the lighter default probate
• Spousal allowances: homestead, exempt property, family allowance

Real property: no transfer-on-death deed here

Michigan does not authorize transfer-on-death deeds or beneficiary deeds for real property. Michigan has never enacted the Uniform Real Property Transfer on Death Act, and there is no TOD/beneficiary deed provision anywhere in the Michigan Compiled Laws. Do not go looking for a Michigan "TOD deed" form, none exists, and no Michigan register of deeds will record one. This is the single most common dead end for Michigan families, because TOD deeds are available in most neighboring states (Ohio, Indiana, Illinois, Wisconsin, Minnesota all have them) and generic national websites routinely imply Michigan does too. Important distinction: Michigan does allow transfer-on-death and payable-on-death beneficiary designations for everything that is not real estate. MCL 700.6101 declares nonprobate transfer provisions nontestamentary in "an insurance policy, contract of employment, bond, mortgage, promissory note, certificated or uncertificated security, account agreement, custodial agreement, deposit agreement, compensation plan, pension plan, individual retirement plan, employee benefit plan, trust, conveyance, deed of gift, marital property agreement, or other written instrument of similar nature." Part 63 of epic (MCL 700.6301 et seq.) governs TOD registration of securities; MCL 700.6307 provides that "On death of a sole owner or the last to die of all multiple owners, ownership of securities registered in beneficiary form passes to the beneficiary or beneficiaries who survived all owners." So POD bank accounts and TOD brokerage accounts work fully in Michigan. It is only land that has no TOD instrument. Note that MCL 700.6101 expressly preserves creditors' rights, so a POD/TOD designation does not defeat valid creditor claims. The Michigan substitutes for a TOD deed, in the order families should consider them: 1. Lady bird deed (enhanced life estate deed). This is Michigan's functional equivalent of a TOD deed and is the standard answer here. The owner conveys a remainder interest to named beneficiaries but reserves a life estate plus the unrestricted power to sell, mortgage, lease, or give away the property during life without the remainder beneficiaries' consent. Because the power to convey is retained, the transfer is not a completed gift, the owner keeps total control, and no beneficiary consent is ever needed. On death, title vests automatically in the remainder beneficiaries with no probate. Critically, it is not created by any Michigan statute: it is a creature of common law and conveyancing practice, long accepted by Michigan title insurers, county registers of deeds, and the State Bar of Michigan's Real Property Law Section land title standards. Because it is practice-based rather than statutory, it must be drafted precisely; a life estate deed that omits the reserved power to convey is an ordinary (irrevocable) life estate, which is a very different and usually much worse instrument. Michigan-specific advantages: it preserves the step-up in basis at death, it does not trigger uncapping of taxable value for property tax purposes when the transfer is to a qualifying relative, it preserves the Principal Residence Exemption during life, and, the big one, because Michigan limits Medicaid estate recovery to the probate estate, a lady bird deed keeps the home out of the probate estate and therefore out of the reach of Michigan's estate recovery program. It is also not a divestment for Medicaid eligibility purposes, since no completed transfer occurs during life. 2. Tenancy by the entirety. Married Michigan couples who take title jointly are presumed to hold as tenants by the entirety. This carries automatic right of survivorship (the survivor takes the whole parcel with no probate, typically evidenced by recording a death certificate) and, uniquely, protects the property from the creditors of only one spouse. This is the default and most common way Michigan homes pass at a first death. 3. Joint tenancy with full rights of survivorship. For unmarried co-owners. Michigan distinguishes an ordinary "joint tenancy" (severable) from a "joint tenancy with full rights of survivorship" (an indestructible dual-contingent-remainder form); the magic words matter. Downsides are the usual ones: exposure to the joint owner's creditors and divorce, loss of full step-up in basis, and possible gift-tax consequences on creation. 4. Revocable living trust. The most flexible option, and the right choice for multi-parcel owners, out-of-state real estate, blended families, or beneficiaries who are minors or have special needs. The property must actually be deeded into the trust to work. 5. MCL 700.3982 assignment of property. Uniquely useful in Michigan for families acting after a death: unlike most states' small-estate procedures, Michigan's assignment of property can transfer real estate (see the summaryAdministrationNote). If a parent died owning only a modest home, this may transfer it without any probate administration.

No TOD/beneficiary deed statute exists in Michigan. Related nonprobate authority that does exist: MCL 700.6101 (nonprobate transfers on death are nontestamentary); epic Part 63, MCL 700.6301 et seq., esp. MCL 700.6307 (TOD registration of securities). Lady bird / enhanced life estate deeds are recognized by Michigan common law and conveyancing practice, not by statute.

Accounts: the fastest win

Payable-on-death and transfer-on-death designations are available on bank and brokerage accounts in every state including Michigan. They cost nothing, take ten minutes at the branch, do not affect your control of the money while you are alive, and remove the account from probate entirely. If someone reading this only does one thing, this is the one.

The same principle already governs retirement accounts and life insurance, which is why the beneficiary form matters more than the will, a beneficiary designation overrides the will, every time. Review them after every marriage, divorce, birth and death.

After death: the small estate affidavit

None of the above can be done retroactively, but Michigan still has a route. Under Collection of Personal Property by Sworn Statement (Michigan "Transfer by Affidavit"), MCL 700.3983. Scao form PC 598, Affidavit of Decedent's Successor for Delivery of Certain Assets Owned by Decedent, the next of kin can collect the decedent’s property without opening probate when:

• the estate is worth $53,000 or less (net value), and
• at least 28 days have passed since the death, and
• no probate case has already been opened.

Value of the entire estate, wherever located, NET of liens and encumbrances, and the estate must contain no real property (MCL 700.3983(1)(a)). Statutory base figure is $50,000, indexed under MCL 700.1210. Critically, the applicable figure is the one published for the calendar year in which the decedent died, not the year the affidavit is signed or presented.

Full detail, including who may sign and where to take it, is on our Michigan small estate affidavit page.

The middle option most families miss

Michigan actually has three tiers below full administration, and families routinely miss the middle ones. Tier 1. Transfer by affidavit (no court involvement at all). MCL 700.3983, SCAO form PC 598 ("Affidavit of Decedent's Successor for Delivery of Certain Assets Owned by Decedent"). Requirements printed on the form: more than 28 days have passed since death; no real property is included in the estate; the value of the estate, less liens and encumbrances, does not exceed $50,000 "adjusted annually as provided in MCL 700.1210"; no personal representative has been appointed and none is pending; and no petition for assignment has been filed. The successor presents the notarized affidavit plus a death certificate directly to the bank, employer, or other holder. No filing fee, no court. Tier 2. Assignment of property (the "middle option," and Michigan's standout feature). MCL 700.3982, SCAO form PC 556 ("Petition and Order for Assignment"). This is a court-ordered summary distribution with no personal representative, no inventory duty, no creditor publication, and no administration. The statute provides that if the balance of the decedent's gross estate after payment of funeral and burial expenses consists of property valued at $50,000 or less (adjusted under MCL 700.1210), the court may order the property turned over to the surviving spouse, or to the heirs if there is no spouse. Why tier 2 matters so much in Michigan: unlike the affidavit route and unlike most states' small-estate procedures nationally, the assignment of property can transfer real estate. Form PC 556 has dedicated rows for "Legal description of real property" with gross value and lien amount columns. A family whose parent died owning a modest house and little else can often transfer the home by a single petition, a $25 filing fee, and a court order, no probate administration whatsoever. Two valuation rules make this reach much further than the headline number suggests: (a) for real property with a date of death on or after March 28, 2013, the gross value of a parcel is reduced by the lien amount on that parcel (though the resulting inventory value cannot go below zero); and (b) as of January 1, 2024, indebtedness of up to $250,000 may be deducted from real property value in computing the estate. So a house worth $280,000 with a $250,000 mortgage can qualify. Also note MCL 700.3982 expressly provides that a person authorized to use more than one procedure cannot be required to use one rather than another. The trade-off: under MCL 700.3982 the heirs who receive assigned property remain personally liable for the decedent's unpaid debts, up to the value received, for 63 days after the order. That is the price of skipping creditor administration. Tier 3. Summary administrative procedure. MCL 700.3987. This one has no dollar threshold at all. It is defined relative to the estate's own obligations, so even a fairly large estate can qualify if its debts and allowances swallow it. The statute provides in full: "If it appears from the inventory and appraisal that the value of the entire estate, less liens and encumbrances, does not exceed administration costs and expenses, reasonable funeral and burial expenses, homestead allowance, family allowance, exempt property, and reasonable, necessary medical and hospital expenses of the decedent's last illness, the personal representative, without giving notice to creditors, may immediately disburse and distribute the estate to the persons entitled to the estate and may file a closing statement as provided in section 3988." The words "without giving notice to creditors" are the payoff: a qualifying estate skips the 4-month creditor publication period entirely and can be closed in weeks rather than the better part of a year. A personal representative must still be appointed and an inventory filed, so this is not as light as Tiers 1–2, but it is dramatically lighter than full administration. Separately: Michigan's ordinary probate is itself unusually light. The default is informal, unsupervised administration, in which the personal representative acts without seeking court approval for individual transactions and closes with a sworn closing statement. Supervised administration must be affirmatively requested and ordered. Many Michigan families budget and worry as though supervised administration were the norm; it is not.

If the estate is over the affidavit limit, ask the probate court clerk about this before assuming you face the full process. Clerks cannot give legal advice, but they can tell you which procedures exist and hand you the forms.

Common mistakes in Michigan

• Assuming a will avoids probate.It doesn’t. It directs probate. This is the most common misconception in the whole subject.
• Adding an adult child to the deed.It does avoid probate, and it also exposes the property to that child’s creditors and divorce, may trigger gift-tax reporting, and can cost them the step-up in basis.
• Paying for a trust and never funding it. A trust only governs assets actually retitled into it.
• Stale beneficiary forms. The form beats the will.
• Overestimating the estate after a death. Families routinely count the jointly-held house, the 401(k) with a named beneficiary and the POD savings account, conclude they are over the limit, and pay for probate they never needed.
• Filing probate before checking. In most states, once a personal representative is appointed the affidavit route closes permanently. The reverse is not true, so check first.

Sources

• codes.findlaw.com
• codes.findlaw.com
• codes.findlaw.com
• codes.findlaw.com
• codes.findlaw.com
• codes.findlaw.com
• codes.findlaw.com
• codes.findlaw.com