Legal Question in Wills and Trusts in Michigan
Avoiding Probate
If I have a simple will, will it automatically go to probate or do my assest have to be over a certain amount before they go to probate? I was looking into have a living trust done and was told that for a joint will, assets would need to exceed approximately $1.4m. before it went to probate. Would my estate be taxed at a higher amount even if it didn't go to probate and I didn't have a living trust? Is it always best to use a living trust?
2 Answers from Attorneys
Re: Avoiding Probate
A will operates on assets in your sole name. Therefore, if you die with assets in your sole name, they have to be probated.
You do NOT need 1.4 of assets to have a trust. A 'joint will' is a will that is used for both husband and wife, and is not a good idea.
Probate has no effect on the taxablity of assets for Federal Estate Tax purposes.
A trust will avoid probate, ONLY if the assets are transferred to the Trust. Trusts are generally better than wills, but not everybody needs a trust.
Neither a trust nor a will operates on property that is jointly titled, that property passes to the surviving joint tenant.
It is easy to get tax planning and estate planning mixed up. Feel free to give me a call if you want to discuss in more detail.
Re: Avoiding Probate
You really were given inaccurate information. There is no set requirement about which property gets sent to probate. You do not need a minimum amount to have to probate property. Everyone's situation is different. However, as a general rule, living trusts are a good way to handle avoiding probate, but everyone's situation is unique. Contact a lawyer to discuss your specific situation.
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