Probate Blog
Kalamazoo Estate Planning - Probate Blog

What is an Order to Complete an Estate?

Posted January 6, 2017

Pursuant to MCL 700.3952 a personal representative or an interested person may petition for an order of complete estate settlement. This is a formal proceeding which offers a procedure to settle all issues in closing an estate. It gives the personal representative the protection of the conclusiveness of a court order. This procedure is available for all estate proceedings whether or not they were begun by informal or formal proceedings. If formal testacy has not been determined, such a determination can be asked for if it is desired before final distribution. An estate proceeding in supervised administration must be closed in this manner. The personal representative may petition at any time, and an interested person may petition after 1 year from the original personal representative's appointment. However, the court shall not accept a petition under this section until the time expires for presenting a claim that arises before the decedent's death.

A petition for an order of complete estate settlement may request the court to determine testacy, if not previously determined, to consider the final account, to compel or approve an accounting and distribution, to construe a will or determine heirs, and to adjudicate the estate's final settlement and distribution. There are two court form that may be used depending upon whether testacy was or was not previously adjudicated. The forms are Petition for Complete Estate Settlement, Testacy Previously Adjudicated and Petition for Adjudication of Testacy and Complete Estate Settlement. Schedule of Distribution and Payment of Claims may be used as an attachment for either petition. If there is a request for an adjudication of testacy, there must also be a determination of heirs. It is contemplated that as a part of this procedure the personal representative will request to be discharged. Pursuant to Michigan Court Rule (MCR) 5.311(B)(3) a personal representative filing a discharge request must also file additional papers with the court so the court can make a determination that the estate has been properly administered. Those papers and proof of service for them are as follows:

  • Inventory;
  • Accountings;
  • Notice of Appointment;
  • Fees notice pursuant to MCR 8.303;
  • Notice to spouse;
  • Notice of continued administration;
  • Affidavit of any required publication;
  • Tax information concerning inheritance or estate tax; and
  • Any other papers which the court may require

Pursuant to MCR 5.125(C)(8) the persons interested in a petition for an order of complete estate settlement under MCL 700.3952 or a petition for discharge under MCR 5.311(B)(3) are the:

  • Devisees of a testate estate;
  • Heirs unless there has been an adjudication that decedent died testate or if there is a pending request for determination of heirs;
  • Claimants; and
  • Such other persons whose interests are affected by the relief requested

Pursuant to MCL 700.3952(3) a method is provided for curing any prior oversight as to notice of an interested person during estate administration. Such an interested person may now be given notice and such notice in the absence of objection will fully adjudicate the interested person's interest. After notice to all interested persons and a hearing, the court may enter an order or orders, on appropriate conditions, determining the persons entitled to distribution of the estate, and as circumstances require, approving settlement, directing or approving estate distribution, and discharging the personal representative from further claim or demand of an interested person. To accomplish this the court will use Order for Complete Estate Settlement. After the personal representative files evidence of payment of claims and distributions as set forth in the Order for Complete Estate Settlement and the court is satisfied that estate administration is complete, the court will issue Order of Discharge . This order will terminate the personal representative's authority and close estate administration.

 

General Duties of the Personal Representative:

Posted December 23, 2016

Under MCL 700.3703, a personal representative is a fiduciary who shall observe the standard of care applicable to a trustee as described by section 7803. A personal representative is under a duty to settle and distribute the decedent's estate in accordance with the terms of a probated and effective will and this act, and as expeditiously and efficiently as is consistent with the best interests of the estate. The personal representative shall use the authority conferred by this act, the terms of the will, if any, and an order in a proceeding to which the personal representative is party for the best interests of claimants whose claims have been allowed and of successors to the estate.

A personal representative shall not be surcharged for acts of administration or distribution if the conduct in question was authorized at the time. Subject to other obligations of administration, an informally probated will is authority to administer and distribute the estate according to the will's terms. Whether issued in an informal or formal proceeding, an order of appointment of a personal representative is authority to distribute apparently intestate property to the decedent's heirs if, at the time of distribution, the personal representative is not aware of a pending testacy proceeding, a proceeding to vacate an order entered in an earlier testacy proceeding, a formal proceeding questioning the personal representative's appointment or fitness to continue, or a supervised administration proceeding. Nothing in this section affects the personal representative's duty to administer and distribute the estate in accordance with the rights of a claimant whose claim has been allowed, the surviving spouse, a minor or dependent child, or a pretermitted child of the decedent as described elsewhere in this act.

Except as to a proceeding that does not survive the decedent's death, a personal representative of a decedent domiciled in this state at death has the same standing to sue and be sued in the courts of this state and the courts of another jurisdiction as the decedent had immediately prior to death. The personal representative shall keep each presumptive distributee informed of the estate settlement.

Until a beneficiary's share is fully distributed, the personal representative shall annually, and upon completion of the estate settlement, account to each beneficiary by supplying a statement of the activities of the estate and of the personal representative, specifying all receipts and disbursements and identifying property belonging to the estate.

MCL 700.3703

 

Supervised Administration for Probating an Estate:

Posted November 23, 2016

Supervised administration is defined in the Estates and Protected Individuals Code (EPIC) at MCL 700.3501(1):

As a single in rem proceeding to secure complete administration and settlement of a decedent's estate under the court's continuing authority that extends until entry of an order approving estate distribution and discharging the personal representative or other order terminating the proceedings.

There are two major parts which define supervised administration. The statutory requirements are found in Article III, Part 5 of EPIC. Michigan Court Rule 5.310 also controls how to proceed with supervised administration. Anyone using supervised administration should be familiar with both the statute and the rule. In its simplest form, supervised administration is begun by a formal proceeding and ends with an order of complete estate settlement which approves estate distribution. Between beginning and end we have "unsupervised administration”. A supervised personal representative is responsible to the court and the court may direct the personal representative concerning the estate. However, except as otherwise ordered by the Court, a supervised personal representative has the same powers as a personal representative who is not supervised. The one notable exception to this is that a supervised personal representative shall not make a distribution of the estate without prior court order. This would include any partial distributions.

Supervised administration is commenced by filing a petition rather than an application. Such a petition may be joined with a petition in a formal testacy or formal appointment proceeding. Such a petition may be filed at any time during estate administration. When supervised administration is requested after adjudication, an interested person files a Petition for Supervised Administration after Previous Adjudication . After a petition for supervised administration, even if denied, the court must decide:

  • Whether the decedent left a will and its validity.
  • The personal representative's priority and qualifications to serve.
  • A determination of heirs is required as a part of this process by MCL 700.3402.

Supervised administration is not a favored form of estate administration under EPIC. It may only be ordered under most circumstances upon a showing of necessity. Just because an interested person requests it should not be enough. MCL 700.3502(3) states the circumstance under which supervised administration may be ordered:

  • If the decedent's will directs supervised administration, the court shall order supervised administration unless the court finds that circumstances bearing on the need for supervised administration have changed since the execution of the will and that supervised administration is not necessary.
  • If the decedent's will directs unsupervised administration, the court shall only order supervised administration on a finding that it is necessary for protection of persons interested in the estate.
  • In other cases, the court shall order supervised administration if the court finds that supervised administration is necessary under the circumstances.

The filing of a petition for supervised administration has the effect on other proceedings as described in MCL 700.3503: The pendency of a proceeding for supervised administration of a decedent's estate stays action on a pending informal application or an informal application filed after commencement of the proceedings for supervised administration. If a will has been previously probated in informal proceedings, the filing of a petition for supervised administration has the same effect as a formal testacy proceeding pursuant to MCL 700.3401.

After receipt of notice of the filing of a supervised administration petition, a personal representative who has been previously appointed shall not exercise the power to distribute the estate. The filing of such a petition does not affect the personal representative's other powers and duties unless the court restricts the exercise of any of those powers and duties pending full hearing on the petition. Pursuant to Michigan Court Rule 5.310 the personal representative must file the following additional papers with the court and serve copies on the interested persons: Inventory - If supervised administration is ordered at the commencement of estate administration, the inventory must be filed within 91 days of the date of the letters of authority.

 

Probate and Divorce:

Posted October 11, 2016

Under MCL 700.2807 and unless provided by the express terms of a governing instrument, court order, or contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce, or annulment, the divorce or annulment of a marriage does all of the following:

  • A disposition or appointment of property made by a divorced individual to his or her former spouse in a governing instrument and a disposition or appointment created by law or in a governing instrument to a relative of the divorced individual's former spouse.
  • A provision in a governing instrument conferring a general or nongeneral power of appointment on the divorced individual's former spouse or on a relative of the divorced individual's former spouse.
  • A nomination in a governing instrument, nominating a divorced individual's former spouse or a relative of the divorced individual's former spouse to serve in a fiduciary or representative capacity, including, but not limited to, a personal representative, executor, trustee, conservator, agent, or guardian.
  • Severs the interests of the former spouses in property held by them at the time of the divorce or annulment as joint tenants with the right of survivorship, transforming the interests of the former spouses into tenancies in common. A severance under subsection (1)(b) does not affect a third-party interest in property acquired for value and in good faith reliance on an apparent title by survivorship in the survivor of the former spouses unless a writing declaring the severance has been noted, registered, filed, or recorded in records appropriate to the kind and location of the property that are relied upon, in the ordinary course of transactions involving that type of property, as evidence of ownership.

Each provision of a governing instrument is given effect as if the former spouse and relatives of the former spouse disclaimed all provisions revoked by this section or, in the case of a revoked nomination in a fiduciary or representative capacity, as if the former spouse and relatives of the former spouse died immediately before the divorce or annulment. Each provision revoked solely by this section is revived by the divorced individual's remarriage to the former spouse or by a nullification of the divorce or annulment. No change of circumstances other than as described in this section and in sections 2803 to 2805, 2808, and 2809 causes a revocation.

MCL 700.2807

 

 

 

 

 

 

 

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