Probate

In my last post, I wrote about how Mike had purchased a power of attorney for elderly father, Robert, who has dementia, from a legal forms website, Legal Whirl.

How do you access a safe deposit box after the owner passes away?  If the deceased owner (the “decedent”) had a safe deposit box, it may be a good idea to gain access to the box as soon as possible.  The Last Will and Testament or Trust and other documents needed to settle the estate can often be found in a safe deposit box.

Under Michigan law, safe deposit boxes jointly owned with another person are not sealed at death. The surviving joint tenant may gain immediate access. While this may be convenient, be careful in who you designate as a joint tenant on a safe deposit box because the joint tenant has the right to enter the box and remove any items in it, at any time.  Designate the wrong person and the jewelry, gold coins, or cash that “everyone in the family knows was in the box” may go missing for good. 

If you have a probate estate, the probate court may appoint a personal representative for your estate.  If the joint tenant is someone other than the personal representative, then both the joint tenant and the personal representative have full access to the box. If the box is jointly leased with someone other than the personal representative, however, the personal representative must open the box in the presence of the safe deposit company’s authorized employee.  Michigan law then requires that a list of items removed by the personal representative must be made and served on the other joint owner within seven days.  

What if the safe deposit box was just registered in the decedent’s name?   Then the law provides that even before a personal representative is appointed, any interested person, as defined in Michigan’s probate laws, may petition the probate court to open a safe deposit box to look for a will or burial plot deed.  However, to utilize this law you need to know the name of the financial institution and location of the branch where the safe deposit box is located and the box number.

The probate judge may issue the order immediately after a $10 fee has been paid. Once the order has been issued, the box may be opened in the presence of an officer or authorized employee of the bank. All those in attendance must sign a certificate stating whether a will or burial deed was found in the box and that no other items were removed. Items contained in the safe deposit box other than the will or burial plot deed may not be removed from the box.

The certificate and any will or burial plot deed found in the box are to be delivered to the probate register. The register issues a receipt for these materials to the bank where the box was found.

What if you are not sure if a deceased person had a safe deposit box?  In order to find out, an estate will have to be opened in probate court and a personal representative appointed.  A personal representative, once appointed, has authority to inquire of a bank if there was a safe deposit box and the bank is authorized to disclose that information to a personal representative.  The personal representative, once appointed, has full access to the box.

In Michigan, a decedent’s heirs are determined by applying the rules of intestate succession. If the decedent died intestate, these rules determine who will ultimately receive the residue of the decedent’s estate. There are several general rules of intestate succession that are used to identify heirs in all Michigan probate court proceedings.

First, a surviving spouse is given preferential status over the decedent’s other surviving relatives.  If there are no surviving descendants or parents of the decedent, the decedent’s spouse is the sole heir, even though the decedent may have left surviving brothers and sisters or other relatives. A surviving spouse is also given a dollar and share preference over the decedent’s descendants and parents, as follows:

If a decedent leaves no descendant but leaves a surviving parent, the surviving spouse is entitled to the first $204,000 of the decedent’s intestate estate. The surviving spouse then receives three-quarters of the balance and the surviving parent(s) receive one-quarter.

If any of the decedent’s descendants are also the surviving spouse’s descendants, then the surviving spouse is entitled to receive the first $204,000 of the decedent’s intestate estate and shares the balance equally with the decedent’s descendants.  This means that if Dad dies, Mom inherits the first $204,000 and has to split the rest with the kids.

If none of the decedent’s descendants are descendants of the surviving spouse (they are the surviving spouse's stepchildren), then the surviving spouse is entitled to receive the first $136,000 of the decedent’s estate and shares the balance equally with the decedent’s descendants.

If the decedent leaves no surviving descendant or parent, then the surviving spouse is entitled to receive the entire intestate estate.

The above amounts must be indexed annually for cost-of-living adjustments. MCL 700.1210.  Note that there is no distinction based on the gender of the surviving spouse. In other words, there are no preferences given to widows over widowers with respect to intestate shares.

If there is no surviving spouse, the entire estate passes to the following individuals who survive the decedent in this order:

1. The decedent’s descendants.
2. If there are no surviving descendants, the decedent’s parents.
3. If there are no surviving descendants or parents, the descendants of the decedent’s parents, i.e., brothers and sisters, then nieces and nephews.
4. If there are none of the above, half goes to the decedent’s maternal grandparents or their descendants and half goes to the decedent’s paternal grandparents or their descendants. If there is no one to take on one side of the family, the entire estate passes to the relatives on the other side.

A nonspouse intestate heir takes his or her share by representation. This distribution scheme is also called per capita at each generation. The estate or part of the estate is divided into as many equal shares as the total of the surviving descendants in the generation nearest to the decedent that contains one or more surviving descendants and the deceased descendants in the same generation who left surviving descendants, if any. Each surviving descendant in the nearest generation is allocated one share. The remaining shares, if any, are combined and then divided in the same manner among the surviving descendants of the deceased descendants as if the surviving descendants who were allocated a share and their surviving descendants had predeceased the decedent.

Michigan's Estates and Protected Individuals Code (EPIC) contains two key exclusionary rules to bar the decedent’s distant relatives from inheriting an intestate share. These more distant relatives are not considered heirs of the decedent under the following principles:

Any distant relative of the decedent who is not a descendant of the decedent’s grandparents (either maternal or paternal) is excluded from any share of the decedent’s intestate estate. Any such relative is not an heir of the deceased.

When tracing lineage through the decedent’s grandparents, if descendants are located in more than one generation relative to the decedent, the descendants in the more remote generation take by representation only.

As a corollary to this rule, if no descendants of either of the decedent’s grandparents can be located, the decedent’s intestate estate will escheat to the State of Michigan. Under EPIC, the state is considered an heir of the decedent if no relative can be found to take. In such cases, the Attorney General is an interested person in the estate.

Any heir of the decedent must survive the decedent for 120 hours. If a presumptive heir of a decedent dies within 120 hours following the death of the decedent, then that heir is deemed to have predeceased the decedent, the presumptive heir is not considered an heir, and he or she is not entitled to any share of the decedent’s intestate estate.

The rules of intestate succession apply in the same way regardless of whether the property in the estate is real property or personal property. Under many states’ law, distinctions were made between who was entitled to receive real estate and who was entitled to receive personal property.

Note that an adopted individual is the child of his or her adoptive parents and not of his or her natural parents for the purposes of intestate succession (except in the case of a stepparent adoption, in which case the adopted individual continues to be considered the child of the stepparent’s spouse). A child born out of wedlock can be an heir and take by intestate succession when the man completed an acknowledgment of parentage, the man joined the mother in correcting the birth certificate, the man and child established a mutually acknowledged relationship of parent and child before the child was 18 that continued until terminated by the death of either, or an order of filiation establishing paternity was entered during the man’s life. A child who is not conceived or born during a marriage will be considered to be “born in wedlock” if the parents marry after the child’s conception or birth.

Does this seem complicated?  It is.  These laws have been refined by the Michigan legislature and courts over the years to respond to the many different personal situations that occur when someone never gets around to making a Last Will & Testament or Trust.   You can simplify this process by making a Will and/or Trust to override Michigan's default intestacy laws.  That way, your estate will pass as you decide.