Why A Will Doesn't Avoid Probate (Episode # 304)

0:30 Well, good afternoon, Michigan. It is Tuesday, July second, twenty twenty four, and of course this is Tuesday with Tom, Michigan's only weekly Internet show where we do answer your questions about estate planning and a state settlement in Michigan, and we don't send you a bill. As always, I'm your host, Tom Doyle, a state planning attorney, lifelong Michigan resident, and an ambassador for all things good in this eight state of Michigan. Welcome, welcome, welcome to today's program. Well, if you're a regular listener to the program, you'll note that did not have an episode last month.

1:12 Much of the month was spent quite frankly on vacation and traveling. But I'm happy to be back in the studio today. The last episode that we did though, was why your special needs Child should have an am i able Account. So if you have a special needs child, I encourage you to listen to that episode, which was number three oh three, where I talk about what an amiable account is and why that can be an important financial tool for your special needs child. Well, today, a topic that occurs so frequently during countations with clients, and I've talked about in previous episodes of the program, but I haven't talked about it for a while, so I thought i'd refresh the conversation. And that is why a will doesn't avoid probate. Why a will does not avoid probate. But please remember what I'm about to discuss during the program is, as always for educational purposes. It is not intended to be legal advice. You need to work with your attorney to determine what is appropriate for you and your estate plan. Why a will doesn't avoid probate

2:47 it's so often it's one of the most common misconceptions that people have about wills, thinking I have a will, there if I broke probate. I've mentioned it before. So often a man and I are meeting with clients, they tell us that they want to have a will, and when we ask them why do they have a will, inevitably they are going to tell us they have to have a will to avoid approbate. So why doesn't a will probate? Well, obviously, wills are important documents as part of an overall estate plan. In a will, you can indicate your distribution of your assets, guardianship for miners, conservatorship for miners, etc. But having a will itself does not mean that your estate, your assets, what you own will not have to go through probate at the time that you die. So let's briefly talk about what probate is. Probate is the legal process that would take place after you die, and it's your primary purpose is to make sure that your appropriate debts are paid and your assets are distributed according to your wishes as outlined in your will. So in your will, you will indicate where you want your estate to go. You will indicate who it is that you want to

4:19 be in charge of managing the estate, what we call a personal representative. And if you have minor children, in your will, you will appoint the guardians that will raise your minor children until they get to be eighteen, and conservators that will manage any estate for your minor children also until they get to be eighteen. Now, part of this probate process also involves various steps, but one of those is to validate the will. So when a probate estate is open and the will is submitted to probate, one thing that has to happen is they has to have a determination made that it it is actually your last will. Before it is going to be admitted into probate. There's then going to be an inventory that's going to be prepared that identifies all the different assets that you own, a process for paying debts, notifying creditors, and then ultimately distributing the remaining assets to beneficiaries. That essentially is what probate is.

5:26 Now, if you don't have a will, that you might have what we would call an interstate success a state, and in that case, you haven't determined where your assets are going to go. But the state of Michigan has determined where your assets are going to go. Now, the important consideration is this, so what assets are subject to probate, because not all assets are going to go through probate. Assets that are solely owned by you, that don't have either a designated beneficiary or a POD or a TOD, or not jointly owned with somebody else, those are the assets that are subject to going through probate. That would include any real estate that's just in your name, bank accounts that are in your name, investments that are in your name.

6:21 Amanda's working on in a state right now where an individual had an IRA, but the estate was made as the beneficiary of the IRA, and so in that case, that IRA is now going to have to go through probate. Other assets such as vehicles, personal properties, etc. So anything that you own solely in your name that does not have a beneficiary or TODPOD and is not jointly owned by with somebody else are the assets that typically will go through probe. So those are the things that are going to go through probate.

7:05 Now. A common misconception, though, is that having a will somehow means that your assets will automatically avoid probate. Not true though, because the will is essentially the roadmap for the probate court that says, whatever assets I have that do go through probate. So again, if you have a house that's just in your name, or bank accounts that are just in your name, or vehicles that are just in your name, or investments that are just in your name, the will essentially is a roadmap for the probate court and your personal representative to determine where those assets are going to go through the probate process. Through the probate process, what does that mean. That means that even if you have a will, Even if you have a will, you might have assets that are going to go through probate. Essentially, if you don't own anything at the time of your death, if you don't own any real estate in your name, or have any assets that don't have TOD or pod BET designations on them, or you don't have jointline assets. If you essentially don't own anything at the time of death that's in just your name, those assets won't go through probate. But it's not your will that is causing

8:37 that to happen. It's the fact that you simply don't have any assets that have to go through probate. The will, though having a will, I tell clients all the time, here's consideration a will. Couple considerations important to remember. One, a will is a meaningless document will two things happen, one you die, and two a probate estate is opened and your will is admitted to probate. Until then, it's a meaningless piece of paper. So having a will, simply having a will that says here's where I want my estate to go, doesn't control whether or not your state's going through probate.

9:24 What controls whether or not your state goes through probate is do you have any assets that have to be excuse me, that have to be probated. If you do, then your state those assets are going through probate. If you don't, then those assets are not going through probate. So the will doesn't control that. The will simply controls what happens when assets do go through probate. Now, many clients are going to look at their state and say, hey, I for whatever reason, could be cost, could be other issues that I've talked about in previous episodes of this program. Maybe protecting my privacy, maybe making sure that the children get along after I death, So we want an expedited settlement of the estate. A number of different reasons that clients are going to have to avoid probate or minimize if you will, what would have to go through probate. You start looking at those strategies, those strategies which again are not having a will. It's going to be things like using nonprobate transfer mechanisms such as using beneficiary designations. If I have a bank account, and on my bank account, I have a beneficiary designated who's going to

10:58 receive that account when I die, or it might be a payable on death or transfer on death, that account is not going through probate if that person is still alive at the time of my death. I might have jointly owned assets. Perhaps you're married and you and your spouse jointly own your home. When one of you dies, that home is not going through probate because it is jointly owned with your spouse. So you look at nonprobate transfer mechanism things that you can do with your assets. If you're going to have real estate, maybe we're going to use a Lady birdt a tool that can be used to have real estate avoid having to go through probate. Another very common planning option that will be appropriate for some clients would be having a revocable living trust.

11:52 You create a revocable living trust, you transfer assets into the trust during your lifetime. Those assets that are now in your trust are not subject to probate because they are no longer owned by you individually. They are owned by your trust. So if in looking at your estate and evaluating what you want to accomplish with your estate plan, and if you determine as part of that that avoiding probate is an important consideration for you, simply remember a will is not going to avoid probate. You need to use other tools that are going to be available. So while the will can be a critical document depending upon the nature of your state, understand that the probate process happens in respect based upon the assets that you have, and not whether you do or do not have a will. Of course, Amanda and I would be honored to have

13:26 the opportunity to help you protect your loved ones by putting together your state plan, and if that includes avoiding probate, what strategies can be utilized to accomplish that goal, or perhaps amending a plan that you already have, even if it's one that we didn't prepare, or assisting you in settling a loved one's estate. We have in person consultation at our New Grand Rapids headquarters. We have in person consultation at our East Lansing location. We have virtual consultations via Zoom or telephone, So wherever you happen to be in the state of Michigan, we can likely assist you with your estate planning needs. Remember to we have our legal store. Through the legal Store, you can order individual legal documents that you might need, perhaps you're looking to replace, maybe just your healthcare power of attorney well, you don't need to have an entire estate plan redone, just for a new healthcare power of attorney. If you're our legal store, you would be able to order that document online and have it delivered to you through email. More information on all that, how to schedule a consultation with us, and what information on our legal store and ordering documents, they are all available at our website. That's Doyle LAWPC dot com. Again,

14:58 that's Doyle Law PC dot com. Well, I think that is going to be it for today's show. As always, Oh, if you have a comment about our program, if you have a topic that you'd like to have me discuss, or perhaps questions that you would like to have answered. Much of what I talk about during the program is in response to questions that we are asked, either in person or via email or via the Tuesday with Tom website. If you have any of that, simply head on over to Tuesday with Tom dot com. There you have the ability to leave a voice message by clicking on the microphone or if you prefer, send me an email Tom at Tuesday with Tom dot com. We invite you to please follow us on Facebook and invite your family and friends to follow us as well. Well, that would be Tuesday with Tom. The office Facebook page is Doyle Law PC and don't forget to join our email list. You can subscribe to the Tuesday with Tom email list at Tuesday with Tom dot com. Of course, the program is available probably wherever it is that you listen to podcasts, perhaps Applepots, so think services such as Apple Podcasts and Spotify and Amazon Music,

16:30 Google podcast, Iheartrate Radio, Spreaker. All of those distribution channels you will find Tuesday with Tom wherever it is that you choose to listen to your podcast. Simply do a search for Tuesday with Tom and if you don't find us there, reach out to me again by leaving a message at the website or sending me an email, and we'll see if we can't have that distribution channel added to those that we are already using. Remember to that you can always ask your smart speaker to play Tuesday with Tom. Well, thanks again for spending some of your time with us today, and as always, I hope that you have an awesome day and an awesome week in Michigan. Stay safe.

17:23 Tuesday with Tom has been brought to you by the estate planning attorneys at Doyle Law PC. To learn how we can help you with your estate plan or with settling a loved one's estate, please call us today at five one seven three two three seven three sixty six. That's five one seven three two three seven three sixty six