One of the most difficult things we have to deal with in life is the loss of a loved one. Sadly this is not something that can be avoided. In many instances our loved ones have anticipated that Father Time will eventually catch up to them and they have taken steps to help us. Drafting instructions for loved ones, including Wills, trusts, or asset and debt lists, is very helpful and can make things much easier when we are gone. But from time to time I come across situations where there is a death and the decedent (the person who dies) appears to have not taken any steps to assist their family. Sometimes the decedent does not leave documents or instructions to assist their loved ones. What can you do in that situation? Well first of all, if you are reading this and you have not taken any steps in regard to your own personal situation, I would strongly advise you to look in to having an attorney draft an Estate Plan for you, as at the very least everyone should have a “Last Will and Testament” (in my opinion). But what do you do if the decedent failed to leave anything?
Try and find any legal documents that may have been drafted such as Wills, trusts, etc. Even if they didn’t see an attorney about this, could they have left instructions in their own handwriting? Remember that in some instances Courts will legally recognize handwritten instructions (provided certain conditions are met). Even a list of assets and debts could be very helpful, such as where did my loved one do their banking? Could they have left money in a bank account? Did they have life insurance? Locating documents such as monthly bills, monthly bank statements, checkbook records, etc. could prove very helpful. If your loved one did not leave any legal instructions such as a Last Will and Testament, did they try and keep all of their important papers together so you can determine what was going on with respect to their finances? If so, you still may be able to piece things together to accurately determine, most likely with the advice of a probate attorney, what should or needs to be done, if anything.
If you can get the information explained above then a probate attorney should be able to advise you on whether or not a Probate Estate is going to be necessary. (Please Note: If the deceased had set up a Living Trust Estate Plan you may not need to worry about Probate, as trusts can permit assets to be distributed outside of Probate Court).
As for what Probate is: in the State of Michigan every individual county has a Probate Court. Probate Courts handle various types of cases, including “Decedents' Estates.” When you die you may own an asset that is legally titled in your name, such as a house (aka real estate or real property), that must be addressed by a Probate Court.
Example: “John Doe” passes away and owns a home in Michigan. Homes are owned by having a Deed in your name. Deeds are recorded in the Register of Deeds Office. In order to sell or transfer the ownership interest in John Doe’s home you may need to file a Probate Estate, as without such nobody will have the legal authority to sell or transfer John Doe’s home.
The Probate Court can give someone named the “Personal Representative” the rights and obligations that the deceased party would have had in life, including transferring ownership rights in a home. If John Doe wanted a specific relative or person to receive his home, his legal intentions and instructions could be made known in a Last Will and Testament legal document. The Probate Court gives the Personal Representative the rights needed to be able to close out the deceased’s affairs and to distribute the deceased’s assets to the rightful parties, after paying any creditors' claims that are required to be paid under the law.
But if John Doe died and only owned clothing and a few items of furniture, there may be no need for a Probate Estate. Further, what if John Doe died and only owned assets valued at $1,000, but had $25,000 in debts? Is a Probate Estate necessary if the hypothetical Estate is insolvent (debts exceed value of assets)? In this situation, consult with a probate attorney. (Interestingly, nobody can be forced to apply to a Probate Court to become the Personal Representative of a Decedent’s Estate, as this is a voluntary decision.)
In conclusion, in the event that your loved one passes away and you feel like it is your responsibility to finish up their affairs, stay calm. Let the grieving process pass. Try and gather as much information as you can (described above in item #1). Contact an attorney who handles Probate Estates and seek their advice. If the decedent set up a trust or Living Trust Estate Plan, attempt to contact the attorney who helped set up the trust.
Finally, remember your own affairs. You should try and make sure that when that time comes for yourself that you have left your loved ones an Estate Plan that they can follow and know that it is what you wanted, including but not limited to: