Understanding Exemptions and Allowances in Decedent Estates
Losing a loved one is always challenging, especially when compounded by the complexities of probate. Several allowances and exemptions exist for decedent estates in Michigan, including the homestead allowance, family allowance, and property exemptions. In this article, the probate attorneys of Thompson Legal will discuss each of these exemptions and provide an overview of these allowances applicable to decedent estates.
Please note that this article is not exhaustive, and every situation is unique. In the event that you have questions about exemptions or the specifics of your case, it’s advisable to speak with an attorney. Contact Thompson Legal to schedule a discovery call with a Michigan probate attorney.
Homestead Allowance
The first allowance permitted by the Estate and Protected Individual’s Code is the homestead allowance, designed to provide financial relief to the surviving spouse or minor/dependent children. This allowance is separate from any inheritance received through the decedent's will or intestate succession and does not require court approval.
Pursuant to MCL 700.2402, a Decedent’s surviving spouse is entitled to up to $15,000* (adjusted to $25,000 in 2022 for inflation) from the decedent's estate. If there is no surviving spouse, the allowance is divided equally among the decedent's minor and dependent children. Importantly, the homestead allowance takes precedence over other claims against the estate and other allowances, except for administration costs and funeral expenses.
Family Allowance
The family allowance serves to support the decedent's surviving spouse and minor children during the course of the estate administration period. The family allowance, authorized by MCL 700.2403, and may require approval by the probate court. Payments are for maintenance purposes and can be lump sum or periodic. If the estate lacks sufficient assets to settle all claims, the family allowance may not continue beyond one year.
The amount of the family allowance is determined based on the decedent's obligation to support their family members. Similar to the homestead allowance, the family allowance enjoys priority over most other claims against the estate and is separate from inheritances under a will or intestate succession. Only funeral and burial expenses, administrative expenses, and homestead allowance claims have priority over a family allowance claim.
Exempt Property Allowance
The last allowance applicable to Michigan probate estates is the exempt property allowance. This allowance, authorized under MCL 700.2404, grants the surviving spouse or, in the absence of a spouse, the decedent's children/dependents, exemptions to certain tangible assets from the estate. These assets include household furniture, automobiles, appliances, and personal effects.
The exempt property allowance is limited to a total of $10,000* (adjusted to $25,000 in 2022). If the estate lacks sufficient exempt property, the spouse or children may select other assets to make up the value. Like the other exemptions, the exempt property allowance takes precedence over most claims against the estate and is distinct from inheritances under a will or intestate succession.
Conclusion
Understanding the exemptions applicable to decedent estates is essential for both personal representatives and surviving family members. These provisions offer important financial support, however navigating probate exemption matters can be complex, and seeking guidance from experienced probate attorneys is highly advisable. If you have questions about the exemptions and allowances applicable in Michigan decedent estate, contact Thompson Legal to speak with a probate attorney.
This blog is for informational purposes only. It is not intended as legal advice. In the event you would like to speak with an experienced probate attorney about your case Contact Us at (734) 743-1646 to schedule a consultation.
*An important note on adjustments: the values referenced in this post are adjusted annually for inflation pursuant to MCL 700.1210. For up-to-date exemption amounts, review the most recent notices available from the Michigan Treasury.
