The untimely and unforeseen death of music superstar Prince has brought a lot of attention to the basic question, “What happens when someone dies without a Will?” As most of our readers have probably heard, Prince appears to have died without any estate planning documents in place.
Answering the question posed by this article is not as straightforward as one may assume and generally the answer is typically “it depends.” How assets, accounts and policies are distributed after death depends on a variety of factors including whether the asset, account or policy had a joint owner or a designated beneficiary. Additionally, estate planning and Probate law can also vary dramatically from state to state. This article will describe intestate succession in Michigan. Intestate succession is the legal term for the process of distributing an individual’s assets through Probate upon death when there is no Last Will and Testament or Living Trust.
A Probate Estate must be opened in Probate Court. The Probate Estate distributes all property that is owned solely by the individual, meaning there is not a co-owner with rights of survivorship or a beneficiary. A few examples of property that would require Probate include real estate, bank accounts, and retirement accounts without designated living beneficiaries. This list is by no means inclusive, but provides an idea of some of the types of assets that would end up in Probate Court.
Individuals often assume that if they are married, their entire estate will automatically be inherited by their spouse. In Michigan, this is not the case. If the individual who died has children, grandchildren, or parents living at the time the individual dies, a portion of the individual’s estate will pass to the children of the individual. If the individual has no children or grandchildren, but one or both parents are alive, the surviving parents inherit a portion of the estate. If the individual does not have a surviving spouse, children, grandchildren, or parents, the distributions begin to get more complicated. Generally speaking, the simplified version of the order of relatives who would inherit if there is no surviving spouse, children, grandchildren, or parents is as follows:
- Siblings, or nieces and nephews if a sibling is no longer living;
- Aunts and uncles, or cousins if the aunts and uncles are no longer living.
The specific percentage each relative would inherit depends specifically on the family composition of the individual on the date of his or her death.
The example of Prince’s estate is extreme and his estate will take many years to resolve. We should keep in mind that estate planning is not only for the wealthy. Probate can be very costly for the administration of an estate, and disagreements can dominate the process. Additionally, having only a Will does not avoid Probate. What is needed for a proper estate plan varies greatly based on individual circumstances. If you have questions regarding the estate planning process and how to avoid Probate, please do not hesitate to contact us directly.