Due to the complexities of your financial affairs, clients often fail to get all their assets into trust. Probate is required after they pass away. We call this “oops” because their intent is to avoid probate but human error makes it necessary. For example, we’ve experienced the following “oops” situations:
1. A client opened an investment account for $15,000 in her name alone after her trust was set up. She forgot to title it into her trust. Under Michigan law, a short probate proceeding (2-page application with a court order) was opened to distribute this account to the heir because the value of the account was under $25,000.
2. A successor trustee found a $40,000 bank account in his father’s name only while administering the trust. The father forgot to title the bank account into his trust, so we had to open up a full probate estate and spend over $1,000 in attorney fees because the value of the bank account was over $25,000.
3. Before covid a deceased mother forgot to name her children on an annuity. She remembered to do so on the other 6 annuities but forgot on the 7th one. We had to open a full probate proceeding in Wayne County Probate Court to distribute this $40,000 annuity to her children because, again, the value of the annuity was over $25,000.
As you can see, an “oops” situations happen, so it’s important to double check the titling of your assets throughout your entire financial life.
In the meantime, under a new Michigan law, the scenarios in #2 and #3 above would be easier. Learn more about the common pitfalls of probate here and how you can protect your assets here.
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If you’re interested in learning more about estate planning, please contact an estate planning attorney in Ann Arbor at 734-665-4441.
