Over the last several decades, as adults have increasingly moved away from the area where they grew up and where their families live, there has been an increase in the number of out-of-state beneficiaries of Michigan estates. How, if at all, do Michigan inheritance laws affect out-of-state beneficiaries?
Inheritance Taxes and Estate Taxes
An inheritance tax is a tax on the right of individual beneficiaries to inherit from a deceased person’s (decedent’s) estate. In general, where these taxes apply, beneficiaries are taxed on how much they receive and their relationship to the deceased (with more distant relatives being taxed at a higher rate).
Michigan does not impose a state inheritance tax for Michigan residents who died after September 30, 1993. Since that date was more than 30 years ago, it is extremely unlikely that inheritance tax would be imposed on any beneficiary, regardless of where they reside. Virtually all estates whose beneficiaries would be affected have been closed for decades.
However, if a Michigan decedent owned property in a state that does have inheritance tax, like Pennsylvania or Iowa, a beneficiary of the estate could owe that state’s inheritance tax on the property located within its borders.
Estate tax is a tax on the estate itself. The estate pays the tax out of estate funds before beneficiaries receive their respective shares. Michigan does not currently have a separate estate tax; however, the federal estate tax still does apply to all so there may be estate taxes for very large estates (those over $13.99 million in 2025, or $15 million in 2026).
To the extent that the federal estate tax does apply, it comes directly out of the estate and therefore affects both in-state and out-of-state beneficiaries equally.
Intestate Succession
Whether or not someone lives outside of Michigan has no bearing on whether they inherit from an estate under Michigan law. Michigan law of intestate succession dictates the distribution of an estate when the decedent had no will or trust. The distribution of intestate estates depends on the relationship of heirs to the deceased. Closer relatives, such as spouses and children, inherit first; if the decedent had no spouse or children, more distant relatives inherit, like parents, siblings, or nieces and nephews. Whether an heir lives inside or outside of Michigan is irrelevant.
Serving as Personal Representative
Michigan law does not require the personal representative (executor) of an estate to be a Michigan resident. Relatives of the decedent have priority to serve as personal representative under statutory law (EPIC, or the Estates and Protected Individuals Code).
However, if the personal representative does not live in Michigan, the probate court will require them to appoint a “resident agent” who is present in Michigan. A resident agent is someone who can accept service of process or other legal papers on behalf of the personal representative.
Appointment of a resident agent is straightforward, usually done through a simple court filing at the same time the personal representative accepts their own appointment to serve. Typically, the resident agent is an attorney or trust company, but it may be another individual living in Michigan.
If an out-of-state family member is appointed as personal representative of a Michigan estate, courts are somewhat more likely to require a fiduciary bond. There are also practical considerations if an out-of-state resident is appointed as personal representative. They may have to travel to the state to inventory the decedent’s assets, deal with banks, and appear in probate court. Many out-of-state personal representatives hire a Michigan probate attorney to handle legal filings and communications with the court.
Work with an Experienced Estate and Trust Attorney
The bottom line is that Michigan inheritance law does not limit the ability of those who live out of state to inherit from Michigan estates. However, living out of state can make it more difficult for someone to oversee the administration of a Michigan estate.
The knowledgeable estate planning attorneys at Barron, Rosenberg, Mayoras & Mayoras advise clients about the impact of developments in the law on their estate plan and how to protect their beneficiaries, wherever they live. The firm also regularly assists out-of-state personal representatives in the management of Michigan estates. Schedule a consultation today by calling (248) 213-9514 in Michigan or (941) 222-2199 in Florida to learn how we can assist you. You can also use our simple online contact form.