Michigan Small Estate Guide
The $51,000 Rule (2025)
New inflation adjustments and a massive mortgage deduction have changed the game. Here is how to settle a Michigan estate without full probate.
Legal Note: This guide reflects the 2025 inflation-adjusted limit of $51,000 and the mortgage deduction rules under MCL 700.3982(5). Laws change annually. Consult a Michigan probate attorney for specific advice.
The "Hidden" Loophole of 2025
If you are reading older guides, stop. They will tell you the limit is $15,000 or $25,000. They are outdated.
For deaths occurring in 2025, the Michigan small estate limit has risen to $51,000. But the real headline isn't the limit—it's the deduction.
The $257,000 Mortgage Deduction
Before 2024, if Mom owned a $100,000 house with a $90,000 mortgage, she was "too rich" for a small estate affidavit because the Gross Value ($100k) was too high.
Now: You can deduct liens! For 2025 deaths, you can subtract up to $257,000 in secured debt (like a mortgage) from the property value.
Mortgage: -$250,000
"Estate Value": $50,000 (YOU QUALIFY!)
Option A vs. Option B
Michigan doesn't just have one small estate form; it has two. Choosing the right one depends on whether you want to go to court or not.
Transfer by Affidavit
Form PC 598
- ✅ No Court Involvement
- ✅ Free (No filing fee)
- ❌ Must wait 28 days after death
- ❌ Cannot be used for Real Estate
Best for: Bank accounts, Paychecks, Stocks.
Petition for Assignment
Form PC 556
- ✅ Can handle Real Estate
- ✅ Immediate (No waiting period)
- ❌ Requires Court Order
- ❌ Costs money ($25 + Inventory Fee)
Best for: House, Land, or if Bank refuses affidavit.
Deep Dive: Transfer by Affidavit (PC 598)
This is the easiest method. You literally type up a form, sign it in front of a notary, and walk into the bank. The bank is legally required to hand over the money (MCL 700.3983).
The Catch: You must wait 28 days. If you need money now for the funeral, this won't work.
The Checklist
- Value of net estate is $51,000 or less.
- No real property (land/house) is involved.
- 28 days have passed since death.
- No Application for Probate has been filed in court.
Deep Dive: Petition for Assignment (PC 556)
If there is a house involved, or you need to pay the funeral home directly from the deceased's accounts immediately, use this method.
You file a petition with the Probate Court. The Judge signs an Order saying, "This house now belongs to [Heir]." It acts like a deed transfer.
Pay the Funeral Bill First
Michigan law says the funeral home gets paid first. If you paid it, you get reimbursed. If it's unpaid, the court orders the bank to pay the funeral home directly.
Calculate Inventory Fee
Even for small estates, you must pay an "Inventory Fee" to the court. It's a tax based on the estate's value. (e.g., $50k estate = ~$238 fee).
Get the Order
Once the judge signs the "Order for Assignment," take a certified copy to the Register of Deeds to transfer the house.
Frequently Asked Questions
What if the estate is $52,000?
You miss the cutoff. You must open a full estate (Informal Probate). However, double-check your math. Did you deduct the funeral bill? In "Petition for Assignment," you add the funeral expenses to the limit. So if the funeral was $5,000, the limit effectively becomes $56,000 ($51k + $5k).
Do cars count toward the $51,000?
Usually, yes. However, verify with the Secretary of State. Sometimes vehicles can be transferred to a spouse outside of probate entirely, removing them from this calculation.
Estate Too Large?
If you don't qualify for these shortcuts, you need Informal Probate. Calculate your executor fees and court costs now.
Legal Disclaimer: FinanceSmartUSA is an independent publisher. The $51,000 limit applies to deaths in 2025 (MCL 700.3983). Inflation adjustments occur annually. Always verify current limits with the Michigan State Treasurer or a local court.
