What Can Occur if You Pass Away Before Creating a Will or Trust?

Dying without a will or trust in Michigan, legally known as dying “intestate,” can lead to significant challenges for your loved ones. When this occurs, state laws rather than your wishes dictate how your assets are distributed, potentially leading to outcomes you would not have chosen. Michigan intestate succession laws establish a predetermined hierarchy of heirs, with probate courts overseeing the process of identifying legal heirs and distributing assets accordingly. The probate process for intestate estates can be time-consuming and costly, potentially reducing the inheritance your loved ones ultimately receive.

Dying intestate not only affects how your property is distributed but also other considerations, such as who makes your funeral arrangements and administers your estate. These vital responsibilities must be handled with the utmost care to ensure the financial and emotional well-being of those you love. However, not everyone may be well-suited to perform these tasks. Proper planning with the assistance of a knowledgeable wills and trusts attorney can help you ensure your wishes are carried out and your loved ones do not experience extra stress during an already difficult time.

How Will Your Property Be Distributed if You Die Intestate?

In the absence of a will or trust, Michigan’s Estates and Protected Individuals Code dictates how estates are divided among heirs according to a specific order of succession based primarily on marital status and biological relationships. The order of inheritance is as follows:

  • Surviving Spouse: The surviving spouse receives preference over other relatives, but their inheritance will depend on the nature of the decedent’s other surviving relations.
    • No descendants or parents: Spouse inherits the entire estate
    • Surviving parents but no descendants: Spouse receives the first $150,000 (adjusted annually for inflation) plus three-quarters of the remaining balance; parents inherit the rest
    • Descendants shared with the spouse: Spouse receives the first $150,000 plus half of the balance; descendants split the remaining half
    • Descendants from a prior relationship: Spouse receives the first $100,000 plus half of the balance; descendants inherit the remainder
  • Descendants: If no surviving spouse exists, descendants inherit the entire estate equally. Biological and legally adopted children are included, but stepchildren are excluded unless formally adopted
  • Parents: If no spouse or descendants survive, parents inherit the estate equally
  • Siblings and nieces/nephews: If no parents survive, siblings inherit equally. If siblings predecease the decedent, their descendants (the decedent’s nieces/nephews) inherit by representation
  • Grandparents and their descendants: If no siblings survive, the estate splits equally between paternal and maternal grandparents. If grandparents are deceased, their descendants, including the decedent’s aunts, uncles, and cousins, will inherit
  • State of Michigan: If no eligible heirs can be identified, the estate may pass into the possession of the state

Which Assets Are Subject to Intestate Succession in Michigan?

Only assets solely owned by the deceased without designated beneficiaries are distributed according to intestate succession laws. These probate assets typically include real estate held solely in the deceased’s name, personal property, bank accounts without payable-on-death designations, vehicles, collections, stocks, bonds, and business interests. The probate court oversees the inventory of these assets, the payment of debts and taxes, and their ultimate distribution to heirs according to intestate succession laws. Unfortunately, this process can be lengthy and expensive, potentially taking six months to a year for straightforward cases and much longer for complex or disputed estates.

Which Assets May Be Exempt From Intestate Succession?

Several types of assets may bypass intestate succession entirely, transferring automatically to new owners regardless of whether you have a will or trust. While having a valid will in place is strongly recommended for many reasons, utilizing strategic beneficiary designations and property ownership arrangements can help your heirs avoid probate even without a formal will. Jointly owned property passes directly to the surviving co-owner. Similarly, assets with designated beneficiaries pass directly to those named beneficiaries outside of probate. Examples include:

  • Life insurance policies
  • Retirement accounts such as IRAs and 401(k)s
  • Accounts with transfer-on-death (TOD) or payable-on-death (POD) designations

What Are the Other Risks of Not Having a Will or Trust in Place? 

Beyond complicating the distribution of assets, dying without a trust or will in Michigan presents numerous other legal challenges for your heirs. The intestate succession process may lead to unintended financial hardships for loved ones who might not receive the support you would have wanted to provide. The tax burden on probated assets can be much higher than assets distributed through a trust, reducing your family’s inheritance. Without a will, you also lose the opportunity to leave gifts to charitable organizations that were important to you during your life.

Additionally, intestate succession fails to address many modern family structures, potentially excluding long-term unmarried partners, non-adopted stepchildren, and close friends who may have been like family to you. Without a clear will, situations can arise where children or other beloved individuals who were treated equally in life may be treated very differently in death, possibly causing resentment and family conflict. Family disagreements frequently arise when there are no defined instructions from the deceased, sometimes resulting in bitter disputes that can permanently damage relationships.

Wills also provide guidance on crucial topics beyond financial arrangements. Individuals with minor children can and should designate guardians for their children in their will. Without this guidance, the court may appoint individuals you would not have chosen to raise your child. These issues highlight the importance of creating a carefully drafted estate plan that reflects your wishes and family circumstances.

How Can a Trusted Estate Planning Firm Help You Safeguard Your Legacy?

Dying without a will or trust in Michigan subjects your estate to the rigid rules of intestate succession laws, often resulting in outcomes that may not align with your desires. The process involves distributions based solely on legal relationships rather than emotional ones. Key decisions about funeral arrangements, estate administration, and asset distribution will fall to individuals determined by law rather than your choice. 

Creating a will or trust represents one of the most essential steps Michigan residents can take to protect their loved ones and ensure their wishes are honored after death. While contemplating your mortality may be temporarily uncomfortable, leaving your family to navigate the complications of intestate succession during their time of grief presents far greater challenges. 

Our experienced, compassionate lawyers at Kendal Law Group PC can make estate planning as easy as possible. In conjunction with trusts and other estate planning tools, a well-crafted will can provide you and your loved ones with peace of mind, no matter what the future may bring. Contact our firm today at 248-609-1718 to schedule a free, in-depth consultation.