Distributing Small Estates via Petition and Order for Assignment
Section 3982 of the Estates and Protected Individuals Code (MCLA 700.3982) provides a simplified procedure for distributing small estates if the balance of the gross estate after the payment of decedent's funeral and burial expense consists of property of $15,000 or less. The $15,000 is computed by adding the fair market value of all property of the decedent as of the date of death. Liens or debts of the decedent are not subtracted in making the calculation. Therefore, the $15,000 is a gross estate value. The $15,000 amount is adjusted annually for inflation beginning January 1, 2001, and has increased to $22,000 as of 1/1/2014. The form to use is Petition and Order for Assignment (PC 556).
Upon a showing of evidence, satisfactory to the court, of payment of the expenses for the decedent's funeral and burial, the court may order that the property be turned over to the surviving spouse or, if there is not a spouse, to the decedent's heirs.
Upon a showing of evidence, satisfactory to the court, that the decedent's funeral or burial expenses are unpaid or were paid by a person other than the estate, the court shall order that the property be first used to pay the unpaid funeral and burial expenses, or to reimburse the person that paid those expenses, and may order that the balance be turned over to the surviving spouse or, if there is not a spouse, to the decedent's heirs.
Other than a surviving spouse who qualifies for allowances under this act or minor children of the decedent, an heir who receives property through an order under this section is responsible, for 60 days from the date of the order, for any unsatisfied debt of the decedent up to the value of the property received through the order.
This procedure begins with the filing of a form titled Petition and Order for Assignment (PC 556). The filing fee is $25 plus $12 certified copy fee plus Inventory Fees. A copy of the death certificate and a copy of the funeral bill showing the status of the charges must be attached to the Petition. If any part of the funeral or burial expenses have been paid, the receipt should show the name and amount paid by each payer. This whole procedure can usually be completed as soon as the papers are filed with the probate court.
Note re Inventory Fee: Effective for decedent’s dying on or after March 28, 2013 and before January 1, 2018, if real property that is included in the small estate is encumbered by or used as security for an indebtedness, the amount of the indebtedness shall be deducted from the value of the real property in computing the Inventory Fee. MCLA 600.871. The deduction is made only to the value of the particular real property that is subject to the lien and no parcel of real estate can have a value of less than zero. Note that the deduction is only for purposes of calculation of the Inventory Fee, not in determining whether the estate is small enough to utilize the small estate procedure.
MCL 700.3983 of the Estates and Protected Individuals Code contains a very similar provision that may be used to distribute estates of this size when no real property is involved. That provision is discussed in probate note entitled Exceptions to Probate.