Michigan Probate Administration

Most individuals own assets and potentially debt at the time of their death. The assets and liabilities of someone who has passed away becomes part of their “Estate.” Probate is the court process by which the property of a person who has died (decedent or deceased person) is distributed, either according to a Will (testate), or without a will (intestate). The goal of probate is to distribute the decedent’s assets according to their wishes.

Non-probate assets are not subject to probate proceedings and pass to the named beneficiary upon operation of law. These assets can include the following:

• Retirement accounts, such as IRA and 401(k) accounts, where there are designated beneficiaries;
• IRAs,
• Life Insurance;
• Annuities;
• Bank Accounts with “pay on death” designations or “in trust for” designations;
• Jointly owned bank accounts with rights of survivorship; and
• Property owned by a living trust. Legal title to trust property passes to the successor trustee without having to go through probate.

A typical probate administration involves the following steps:

• Filing a petition for probate requesting appointment of a personal representative, determination of heirs, and admission of a will (if decedent had a will);
• Receiving letters of authority when appointed personal representative by the court and marshalling all estate assets;
• Notifying creditors of decedent’s passing by publication and/or notice to known creditors;
• Preparing and filing an inventory of all estate assets owned by decedent at the date of death;
• Liquidating assets and selling real property; and
• Meeting with a CPA to complete the decedent’s final income tax return and estate tax return(s);
• Preparing and filing an estate annual account;
• Paying estate debts and taxes; and
• Preparing a petition to close the estate or sworn statement to close the estate and distributing the estate assets to the heirs/devisees.

While this process may seem straight-forward, it can be quite complicated and lengthy to complete. The length of time needed to administer an estate/trust depends on the size and complexity of the estate/trust and the schedule of the probate court.Our attorneys at Xuereb Law Group PC specialize in probate and can assist you every step of the way.

Michigan Trust Administration

When a loved one passes away with a trust, it is important to make sure that the trustee understands the terms of the trust and accurately administers the trust for the benefit of the beneficiaries.The creation of a trust and putting all assets in the name of a trust avoids the need for probate proceedings and all assets can be distributed according to the terms of the trust by the trustee without probate court involvement.Trust assets are not subject to probate proceedings unless a petition for supervision of a trust is specifically filed with the probate court requesting that the trust be supervised.

A trust is ready to be administered typically upon the death of the person who created the trust, also known as the “Settlor.” A typical trust administration involves the following steps:

• Sending an initial letter to beneficiaries and contingent beneficiaries of the trust providing them with a copy of the trust documents and informing them of the trust assets;
• Publishing for creditors and sending a specific notice to known creditors of the Settlor.In Michigan, a trust must provide a four-month publication period to allow creditors time to file a claim;
• Liquidating, consolidating, and selling trust assets;
• Filing taxes for the trust; and
• Distributing trust assets to beneficiaries.

Every trust is unique and the time it takes to administer a trust varies greatly by the assets involved and the number of beneficiaries. Some trusts require taxes to be filed the following year, so the trustee will do what is called a partial distribution to distribute a majority of the trust assets to the beneficiaries and hold back just enough money to cover taxes and other administrative costs for the following year. The beneficiaries in that situation would then receive the remaining money left over after payment of taxes and administrative costs the following year and the trust would then be closed.

Our attorneys are experienced in trust administration andare here to help navigate you through the process from start to finish.

Guardianships and Conservatorships

In Michigan, Probate courts are set up to handle a variety of legal disputes related to probate proceedings.The issues and concerns that arise in the process of estate and trust administration are more complex and difficult to resolve than other types of legal issues because the person who executed the documents is no longer available to resolve any discrepancy over his or her intent. Controversies that arise during the probate process can frustrate beneficiaries and add additional hardship during a time of grief. Probate and trust litigation allows you to defend the wishes of your loved one, and at Xuereb Law Group, our attorneys can help you and your family through the probate court proceedings.

An objection to a will, also referred to as a “will contest” is a fairly common occurrence during probate proceedings. To file a petition to contest a will, the petitioner must have legal standing to raise objections. A person typically has legal standing if they are an heir of the decedent, or an interested party, such as a creditor or a person specifically mentioned in a Will (a devisee), or someone disinherited in the will.

Will and Trust litigation can include anything from contesting a Will or Trust, removing a fiduciary (personal representative or trustee), and handling conflicts among heirs or beneficiaries that arise in the trust and estate administration process. Common litigation areas include the following:

• Estate and Trust Contests –
  • decedent/settlor lacked mental capacity to execute the estate document or was unduly influenced by someone or was under duress to sign the will or trust;
  • The will/trust was not executed with the proper formalities;
  • The will/trust is fraudulent; or
  • The discovery of another will/trust.
• Breach of Fiduciary Duty – the trustee or personal representative is not administering the trust/estate properly, or is embezzling assets;
• Quiet Title – real property was wrongfully taken from decedent during their lifetime (either by executing a deed under false pretenses or did not have capacity to dispose of their property), and the real property should be returned to the estate or trust; and
• Bank Account Contests –if decedent had a joint account, that account may not go to the survivor if the survivor was only placed on the account for convenience (i.e. to help decedent pay bills and manage assets).

Disputes about wills and trusts can tear families apart. At Xuereb Law Group, we understand the emotional toll probate issues can have on you and your loved ones, which is why our compassionate attorneys handle these delicate issues with precision, skill, and expertise. Whatever probate issue you are facing, we will work hard to resolve your probate issue as quickly, smoothly, and economically feasible as possible. Call our law office today for a consultation.

Guardianship

A guardianship is when someone is appointed by the probate court to make legal decisions for another person (called the “ward”) concerning the ward’s welfare. Different from a conservatorship, where the court appoints an individual to take care of the ward’s property and finances, a guardian is responsible for taking care of the ward’s personal needs, health, and welfare. When rights are granted to a guardian, those rights are taken away from the ward, so guardianships should only be used when necessary and it is important to consider all alternatives, such as a power of attorney or patient advocate designation.

Every person’s situation is different and unique, and the attorneys at Xuereb Law Group PC are here to discuss all available options to you.

A. Guardianship for Minors

1. Full guardianship (MCL 700.5204)

A “full” guardian for a minor may typically be appointed in the following situations:

• The parental rights of both parents or the surviving parent are terminated or suspended by prior court order, by judgment of divorce or separate maintenance, by death, by judicial determination of mental incompetency, by disappearance, or by confinement in a place of detention;
• The parent or parents permit the minor to reside with another person and do not provide the other person with legal authority for the minor’s care and maintenance, and the minor is not residing with his or her parent or parents when the petition is filed; or
• The minor’s biological parents have never been married to each other and the minor’s parent who has custody of the minor dies or is missing and the other parent has not been granted legal custody under court order and the person whom the petition asks to be appointed guardian is a relative of the minor within the fifth degree by marriage, blood, or adoption.

A prospective guardian can either be nominated by a petition filed with the probate court or may be named in a parent’s will.A guardianship by its nature is temporary and does not terminate the legal relationship that exists between a child and his or her parents; however, it divests the proposed guardian with certain legal responsibilities concerning the care and maintenance of a child while suspending the rights of the legal parents of the minor.

2. Limited Guardianship (MCL 700.5205)

A limited guardianship is really a formalized consent agreement between the parents and the proposed guardian. A limited guardian has all the powers of a full guardian, except that the guardian may not consent to marriage or adoption of the minor child. A “limited” guardian of a minor can be done at any time if the custodial parent(s) consent to the appointment of a limited guardian and voluntarily agree to suspend their parental rights. A limited guardianship requires the consent of the parents for placement in a limited guardian and participation in a limited guardianship placement plan. The placement plan should state the time or reason that the guardianship will end. It is important to note that if a parent fails to follow the placement plan without good cause, the court may terminate that parent’s parental rights through a formal court hearing.

The most common reason for a limited guardianship is to provide health insurance for a minor child. A petition for appointment of a guardian is filed in the county where the minor resides or is present during the time the petition is filed.

It is important to only hire a skilled advocate when determining whether to file a guardianship for a minor, and Xuereb Law Group PC’s attorneys are here to help.

B. Guardianship for Disabled or Incapacitated Individuals (MCL 700.5306)

If a person is disabled or because of incapacity loses ability to live independently and make day-to-day personal decisions concerning their health and welfare,then a guardianship may be necessary. Absent a healthcare durable power of attorney or health care patient advocate, legally incapacitated adults generally require a guardian to be appointed on their behalf to have authority to make decisions for the ward’s physical well-being.At a formal hearing for a petition for appointment of a guardian, the probate court must find by clear and convincing evidence that the ward lacks capacity to do some, or all, of the tasks necessary to care for him or herself. MCL 700.5306.

The powers and duties of a guardian are authorized by statute (MCL 700.5314), and may include one or more of the following:

• Decisions concerning medical care or other professional care;
• Releasing medical information for the purposes of medical care or other treatment;
• Determining the ward’s living arrangements or placement in a facility;
• Making travel arrangements;
• Taking care of the ward’s property and personal effects;
• Arranging for the ward’s education, training, or participation in other programs; and
• Arranging for the purchase of food, clothing, and other necessities.

The attorneys at Xuereb Law Group PC can advise you and guide you through the guardianship process.

Guardianships and Conservatorships for Minors and Incapacitated Individuals.

A conservator is a person appointed by the probate court to take care of an incapacitated adult’s or minor child’s property and finances.The person who needs a conservatorship and is subject to the petition is called the “ward.” Appointment of a conservatorship limits the ward’s legal rights to manage their own affairs and appoints a third party to handle the ward’s affairs on the ward’s behalf. The role of a conservator is demanding and requires a lot of responsibility, which includes detailed record-keeping, financial planning, and various obligations owed to the ward and to the probate court.

The probate court may appoint any person over 18 years of age or a professional conservator to serve as conservator. However, the ward’s preference takes priority, and the statute (MCL 700.5409) sets forth the order of individuals who have priority to serve as the ward’s conservator.MCL 700.5404 provides that a petition may be filed by “[t]he individual to be protected, a person who is interested in the individual’s estate, affairs, or welfare, including a parent, guardian, or custodian, or a person who would be adversely affected by lack of effective management of the individual’s property and business affairs.” The petition must also include the reasons why a conservatorship is necessary.The petition for appointment of conservator is filed in the probate court of the county where the ward is located.

A. Minors

The probate court may appoint a conservatorship for a minor child if the minor has property that needs protection or management. A common need for a minor conservatorship is when a minor receives money, either by inheritance or legal settlement, or when a minor needs money for support and education and protection is necessary to obtain money on behalf of the minor. MCL 700.5401. The law disfavors handing minors money and requires that minors have a conservatorship in place to manage the funds until the age of majority.

B. Incapacitated Individuals

If an incapacitated adult executed a durable power of attorney before becoming incapacitated, then a conservatorship may not be necessary.For a court to appoint a conservatorship for an adult, the adult must meet the following statutory criteria:

• The individual is unable to manage property and business affairs effectively for reasons such as mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power, or disappearance; and
• The individual has property that will be wasted or dissipated unless proper management is provided, or money is needed for the individual’s support, care, and welfare or for those entitled to the individual’s support, and that protection is necessary to obtain or provide money.

MCL 700.5401(3). The Court must find by clear and convincing evidence that the individual is in need of a conservator.

Conservatorships are subject to complex substantive laws and procedural rules. If you are interested in filing a conservatorship petition, or otherwise have questions about a petition filed by another person, you should contact an attorney to help protect your interests or the interests of a loved one. Contact Xuereb Law Group PC today for a consultation.