Michigan probate law is a strange creature. Sometimes when you plan without fully understanding this creature, the result is directly opposite what you intended. Let me tell you a sad story about “Mrs. Smith”.
Mrs. Smith had four children, all of whom she loved and trusted. One daughter, Sally, lived closer and started helping Mrs. Smith sort her mail and pay her bills. To make it easier, Mrs. Smith decided to add Sally’s name on her bank accounts, which included some savings accounts, some checking accounts, and some CDs. The total value of these accounts was about $364,000.
Mrs. Smith was getting up there in age, but she knew what she wanted. In fact, she even wrote it down. She pulled out a pen and a pad of paper, wrote the date at the top, and composed her “Will”, which included the statement: “I want all my children to share my money equally after I die.” She wrote “love you all the same“, and signed the Will at the bottom. All of her children knew about the Will, and all of her children agreed that she wrote it and signed it when she was totally competent.
Then, some years later, Mrs. Smith died. What happened is what happens many times after a parent dies — money becomes more important than family. Sally hired a Michigan probate lawyer, and what that probate lawyer told her was: “The money is all yours”. And Sally kept the money.
Now, most people would think that Mrs. Smith’s intent would control (that is, her written not saying the children should share the money). But that’s not the case under Michigan probate law. The opposite is true. There is a presumption that Mrs. Smith wanted Sally to have all the money because she put Sally’s name on the accounts. And it is very difficult to overcome that presumption if you are the other kids.
So, remember the general rule that “joint property defeats a Will”. Mrs. Smith did not understand that general rule, and her family will pay for it for generations.
Don’t put one child’s name on your financial accounts and hope that they will share it with your other children. They might not. Many parents tell me that “my children won’t act like that”. Maybe, and maybe not. But if they do, I can guaranty that they will no longer talk, your grandchildren will no longer play together, and there will be no more Christmas or Thanksgiving dinners, and no more family reunions.
Yes, there are costs to getting a good estate plan in Michigan. But the costs of not having a good plan are far, far greater.