Under Michigan law, the probate file must be open for at least 6 months. If the estate is contested, it could be open for years. Contrast this with the case of beneficiary designations or joint ownership. In such cases, it is generally possible to get control of the asset as soon as death certificates are issued. There is no need to wait.
2. It costs more money
There are fees to open the estate, to obtain letters of authority, to publish for claims, to pay the inventory fee, to file petitions and to obtain orders. There are also attorney fees, in most cases. All of these costs and expenses come "off the top" of the estate, and they can be substantial. Even in cases where this is not true, such costs and expenses can be completely eliminated if you avoid the need for probate.
3. You generally need to use an attorney
Most attorneys are very nice, capable, professional people. They are there to assist you with handling the complications and bureaucracy of probate administration. There is nothing wrong with attorneys, per se. But if you can avoid the need for an attorney, you will eliminate the biggest cost involved in probating an estate. Unfortunately, the probate process involves numerous forms and procedures which, if you are not familiar with them, you need an attorney to help you navigate.
4. You open yourself up to creditor claims
Under Michigan law, the easiest access that a creditor has to the assets of a decedent is through the probate estate. If assets pass outside of probate, there is a good chance that a creditor will not even know that it exists, let alone be able to assert a claim against it. (Please note that this is only true of unsecured creditor claims. Secured creditors always have recourse, because they can repossess or foreclose the secured asset, if they are not paid.)
5. You open yourself up to estate contests
The worst possible eventuality with probate is the contested estate. The only beneficiaries of such estates tend to be the opposing attorneys and the courts, who benefit by receiving years of costs and fees, in many cases. In the end, the estate beneficiaries often settle simply because they are out of money and exhausted from the fight. This is not what you want for your family and loved ones.
6. The outcome is not certain
Part of the comfort that people get from planning their estate is the peace of mind that what they have set up will be followed and honored. When the estate goes to probate, this is not always the case. There are elections and exemptions that various parties can make that can dramatically alter the intended provisions of decedents' Wills and given the potential for people to challenge whatever documents are in place, you run the risk that a judge will decide to do something completely different than you wanted. The beneficiaries can also unanimously agree to change the provisions of a Will. Any time you place your loved ones' fate in the hands of the courts, you cannot be certain as to the result.
7. It increases the chance that you will have difficulty with basic administration
In many estates, you cannot sell assets without getting permission from the court. This can take a couple of months. In a tight real estate market, the fact that the seller needs to get approval from a judge may cost you the deal or it may force you to take less, in order to compensate the buyer for the inconvenience. Judges will generally approve these transactions, especially if there are no objections. But I have personally had estates lose out on multiple deals because approval from the court took too much time.
8. It can be a huge hassle
If you retain an attorney, you need to meet with the attorney and deal with the attorney. If you do not have an attorney, you need to go to the court on numerous occasions. You may need to wait in long lines. You will need to pay money for parking and pay money for filing fees. You will need to keep careful records of everything you do, so you can document your time and what you have done, for the beneficiaries and the judge (perhaps) to review.
9. The Personal Representative is personally liable for any administrative mistakes
This may not be a big problem for the estate planner. If the person you trusts screws up, then you probably want them to be accountable to your beneficiaries. But it sets up a potentially adversarial process which can often lead to estate contests, instead of a useful check and balance.
10. If there are minors involved, then you add the need for additional probate actions
Minors are unable to receive property worth more than $5,000, without having a conservator appointed for them. This is an additional probate proceeding, with additional costs and fees. There are also ongoing responsibilities to the court, which result in more costs and fees. This sometimes gives people the chance to become involved in the affairs of your beneficiaries that you would not want to. An example of this is where you leave money to your minor child. Upon your death, your ex-spouse, (who you do not want within 1,000 miles of your assets), petitions the court to become conservator, so she can manage the assets for your child. This is a fairly common occurrence. Most people would probably not want their ex-spouse involved in this way.
Additional resources provided by the author
There are perhaps many other reasons to avoid probate. The good news is that it is generally very easy and relatively inexpensive to plan your estate so that probate is not needed. Please feel free to review my other legal guides on common probate avoidance techniques.