Frequently Asked Questions

PROBATE

What is Probate Court and when does it apply?

Probate Court is the arm of the Court that deals with deceased and incapacitated individuals. For deceased individuals, Probate Court is required when an individual dies and has assets (i.e. money and/or property) in his or her own name. Probate is also required when a decedent needs to assert a right after death like a wrongful death lawsuit or to obtain assets that they were entitled to during their lifetime. Probate is also used to allow a decedent’s family to have access to certain assets (safe deposit box, etc.) and to find out information about a decedent.

How is the probate process started?

The probate process is started with a death certificate. At that point, it is determined whether the deceased had a will and/or a trust. A representative, called a Personal Representative, is appointed to handle the affairs of the estate.

For incapacity, probate court is used to establish guardianships and conservatorships which are appointed representatives to handle incapacitated persons affairs and medical decisions.

How long is the Probate process?

For a decedent’s estate, the probate process must last at least five (5) months and can take years depending on the purpose of probate. A decedent’s property cannot be distributed until the probate process is completed.

What if the decedent owes money to creditors before he or she died?

A decedent’s debts, including taxes and credit card debts, survive the decedent. The Personal Representative is responsible for taking certain steps to notify and potentially satisfy these debts.

What is the role of the law firm in probate?

Radner Law Firm, P.C. has a unique system whereby it can establish a probate estate in a matter of days. The attorney will assist in making sure that the rules of probate are followed, assets are transferred and proper notification is given to creditors and beneficiaries. The failure to follow proper probate proceedings can lead to individual personal liability to the Personal Representative and cost the estate thousands of dollars. A probate lawyer can help save time and money with regard to creditor claims and the discovery of assets.

There are also many potential tax traps with regard to probate. Radner Law Firm, P.C. has extensive experience in the tax matters of probate and can advise clients as to the most efficient method to avoid and defer estate and income taxes.

What are the advantages of having a Will and Trust?

A Will and Trust allow you to make your own personal choices with regard to the disposition of your estate and to choose representatives to handle your affirs. (I.e. guardian to raise your children, trustee to handle administrative functions, etc.) A Trust has additional advantages, as explained below.

What if an individual passes away without a Will?

Regardless of whether an individual has a Will or not, probate may be required. There is a common misconception that the State of Michigan may take property if an individual dies without a Will. However, this is a fallacy as the property will still be distributed to the beneficiaries (i.e. closest family members) of the deceased.

TRUST

What are the advantages of a Revocable Living Trust?

A Revocable Living Trust has a number of advantages over a Simple Will. Assets passing through a Revocable Living Trust avoid probate and therefore pass to the beneficiaries immediately. In addition, a Revocable Living Trust allows you to structure the payment of Trust benefits over a period of time. For example, if you have minor children, the Trust can provide for the distribution to the children over a period of time (i.e. one-third at age 25, one-third at age 30 and one-third at age 35) to avoid a child mishandling the estate assets. Another advantage of a Revocable Living Trust is that the Revocable Living Trust is private and provides asset protection to your beneficiaries.

Are there unique tax consequences relating to retirement plans?

The taxation of retirement plans is very sophisticated and requires the help of an expert. Retirement plan distributions are generally taxable to the beneficiary and the timing of taking those distributions can be part of the planning process to defer or delay the payment of income taxes.