July 12, 2017, Introduced by Reps. Ellison, Wittenberg, Hammoud and Sneller and referred to the Committee on Judiciary.
A bill to amend 1998 PA 386, entitled
"Estates and protected individuals code,"
by amending sections 3705, 3715, and 3721 (MCL 700.3705, 700.3715,
and 700.3721), sections 3705 and 3715 as amended by 2009 PA 46.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3705. (1) Not later than 28 days after a personal
representative's appointment or other time specified by court rule,
the personal representative, except a special personal
representative, shall give notice of the appointment to the
decedent's heirs and devisees, except those who have executed a
written waiver of notice, including, if there has been no formal
testacy proceeding and if the personal representative is appointed
on the assumption that the decedent died intestate, the devisees in
a will mentioned in the application for appointment of a personal
representative and to the trustee of a trust described in section
7605(1) as to which the decedent was settlor. The personal
representative shall give the notice by personal service or by
ordinary first-class mail to each person required to receive notice
under this subsection whose address is reasonably available to the
personal representative. However, the personal representative is
not required to notify a person who was adjudicated in a prior
formal testacy proceeding to have no interest in the estate. The
notice required under this subsection must be in a form approved by
the supreme court and must include all of the following
information:
(a) That the court will not supervise the personal
representative.
This statement shall must not be included if the
appointment is made in a supervised proceeding under part 5 of this
article.
(b) That, unless a person files a written objection to the
appointment of the person named as personal representative in the
notice or files a demand that bond or higher bond be posted, the
person named in the notice is the personal representative without
bond or with bond in the amount shown in the notice. This statement
shall
must not be included if the personal representative is
appointed in a formal appointment proceeding.
(c) The name and address of the person appointed as the
estate's personal representative.
(d) That, during the course of administering the estate, the
personal representative must provide all interested persons with
all of the following:
(i) A copy of the petition for the personal representative's
appointment and a copy of the will, if any, with the notice.
(ii) A copy of the inventory.
(iii) A copy of the settlement petition or of the closing
statement.
(iv) Unless waived, a copy of the account, including, but not
limited to, fiduciary fees and attorney fees charged to the estate.
(e) That an interested person may petition the court for a
court hearing on any matter at any time during the estate's
administration, including, but not limited to, distribution of
assets and expenses of administration.
(f) That federal and Michigan estate taxes, if any, must be
paid within 9 months after the date of the decedent's death or
another time period specified by law, to avoid penalties.
(g) That, if the estate is not settled within 1 year after the
personal representative's appointment, within 28 days after the
anniversary of the appointment, the personal representative must
file with the court and send to each interested person a notice
that the estate remains under administration and must specify the
reason for the continuation of settlement proceedings. If such a
notice is not received, an interested person may petition the court
for a hearing on the necessity for continued administration or for
closure of the estate.
(h) The identity and location of the court where papers
relating to the estate are on file.
(2) The personal representative's failure to give the
information required by subsection (1) is a breach of the personal
representative's duty to the persons concerned, but does not affect
the validity of the personal representative's appointment, powers,
or other duties. A personal representative may inform other persons
of the appointment by delivery or ordinary first-class mail.
(3) A personal representative shall also give notice that
includes the information described in subsection (1) to the
attorney general, public administration division, under any of the
following circumstances:
(a) It appears from the petition that the decedent died
intestate without leaving a known heir.
(b) In the administration of an intestate estate, it appears
that the decedent did not leave a known heir.
(c) In the administration of a testate estate, it appears that
devisees of the purported will would not be entitled to share in
the estate but for the terms of the will and that the decedent died
without leaving a known heir.
(4) If notice is required to be given to the attorney general
under subsection (3), the attorney general, representing this
state, has all the rights of an heir to be heard and to contest the
validity of a claim, the appointment of a personal representative,
an action of the personal representative, an order, an appointment,
or an instrument purporting to be a decedent's contract or will,
and has all the rights granted or accruing to an heir,
representative, or creditor by a law relating to the settlement of
a testate or intestate estate in court, or by way of rehearing or
appeal.
(5) Within 28 days after the personal representative's
appointment or another time specified by court rule, the personal
representative, except a special personal representative, shall
notify the decedent's surviving spouse, if any, of the spouse's
right to election under part 2 of article II and of the time within
which the election must be exercised.
(6) Except as otherwise provided in this subsection, at the
same time the notice required by subsection (1) is given, the
personal representative shall give notice to the friend of the
court for the county in which the estate is being administered,
which notice identifies the decedent's surviving spouse and the
individuals who are, for a testate estate, the devisees or, for an
intestate estate, the heirs. The personal representative is not
required to notify the friend of the court of a devise to a trustee
of an existing trust or to a trustee under the will. A personal
representative incurs no obligation or liability to the friend of
the court or to another person for an error or omission made in
good faith compliance with this subsection.
(7) If the personal representative is the state or county
public administrator, and if the decedent's real property is
subject to a tax foreclosure, the personal representative shall
also give notice that includes the information described in
subsection (1) to the treasurer of the county in which the real
property subject to the tax foreclosure is located.
Sec. 3715. (1) Except as restricted or otherwise provided by
the will or by an order in a formal proceeding, and subject to
subsection (2) and to the priorities stated in section 3902, a
personal representative, acting reasonably for the benefit of
interested persons, may properly do any of the following:
(a) Retain property owned by the decedent pending distribution
or liquidation, including property in which the personal
representative is personally interested or that is otherwise
improper for trust investment.
(b) Receive property from a fiduciary or another source.
(c) Perform, compromise, or refuse performance of a contract
of the decedent that continues as an estate obligation, as the
personal representative determines under the circumstances. If the
contract is for a conveyance of land and requires the giving of
warranties, the personal representative shall include in the deed
or other instrument of conveyance the required warranties. The
warranties are binding on the estate as though the decedent made
them but do not bind the personal representative except in a
fiduciary capacity. In performing an enforceable contract by the
decedent to convey or lease land, the personal representative,
among other possible courses of action, may do any of the
following:
(i) Execute and deliver a deed of conveyance for cash payment
of the amount remaining due or for the purchaser's note for the
amount remaining due secured by a mortgage on the land.
(ii) Deliver a deed in escrow with directions that the
proceeds, when paid in accordance with the escrow agreement, be
paid to the decedent's successors, as designated in the escrow
agreement.
(d) If, in the judgment of the personal representative, the
decedent would have wanted the pledge satisfied under the
circumstances, satisfy a written charitable pledge of the decedent
irrespective of whether the pledge constitutes a binding obligation
of the decedent or is properly presented as a claim.
(e) If funds are not needed to meet a debt or expenses
currently payable and are not immediately distributable, deposit or
invest liquid assets of the estate, including funds received from
the sale of other property, in accordance with the Michigan prudent
investor rule.
(f) Acquire or dispose of property, including land in this or
another state, for cash or on credit, at public or private sale;
and manage, develop, improve, exchange, partition, change the
character of, or abandon estate property.
(g) Make an ordinary or extraordinary repair or alteration in
a building or other structure, demolish an improvement, or raze an
existing or erect a new party wall or building.
(h) Subdivide, develop, or dedicate land to public use, make
or obtain the vacation of a plat or adjust a boundary, adjust a
difference in valuation on exchange or partition by giving or
receiving consideration, or dedicate an easement to public use
without consideration.
(i) Enter into a lease as lessor or lessee for any purpose,
with or without an option to purchase or renew, for a term within
or extending beyond the period of administration.
(j) Enter into a lease or arrangement for exploration and
removal of minerals or another natural resource, or enter into a
pooling or unitization agreement.
(k) Abandon property when, in the opinion of the personal
representative, it is valueless, or is so encumbered or in such a
condition as to be of no benefit to the estate.
(l) Vote stocks or another security in person or by general or
limited proxy.
(m) Pay a call, assessment, or other amount chargeable or
accruing against or on account of a security, unless barred by a
provision relating to claims.
(n) Hold a security in the name of a nominee or in other form
without disclosure of the estate's interest. However, the personal
representative is liable for an act of the nominee in connection
with the security so held.
(o) Insure the estate property against damage, loss, and
liability and insure the personal representative against liability
as to third persons.
(p) Borrow property with or without security to be repaid from
the estate property or otherwise, and advance money for the
estate's protection.
(q) Effect a fair and reasonable compromise with a debtor or
obligor, or extend, renew, or in any manner modify the terms of an
obligation owing to the estate. If the personal representative
holds a mortgage, pledge, or other lien upon another person's
property, the personal representative may, in lieu of foreclosure,
accept a conveyance or transfer of encumbered property from the
property's owner in satisfaction of the indebtedness secured by
lien.
(r) Pay a tax, an assessment, the personal representative's
compensation, or another expense incident to the estate's
administration.
(s) Sell or exercise a stock subscription or conversion right.
(t) Consent, directly or through a committee or other agent,
to the reorganization, consolidation, merger, dissolution, or
liquidation of a corporation or other business enterprise.
(u) Allocate items of income or expense to either estate
income or principal, as permitted or provided by law.
(v) Employ, and pay reasonable compensation for reasonably
necessary services performed by, a person, including, but not
limited to, an auditor, investment advisor, or agent, even if the
person is associated with the personal representative, to advise or
assist the personal representative in the performance of
administrative
duties; act on such a the person's recommendations
without independent investigation; and, instead of acting
personally, employ 1 or more agents to perform an act of
administration, whether or not discretionary.
(w) Employ an attorney to perform necessary legal services or
to advise or assist the personal representative in the performance
of the personal representative's administrative duties, even if the
attorney is associated with the personal representative, and act
without independent investigation upon the attorney's
recommendation. An attorney employed under this subdivision shall
receive reasonable compensation for his or her employment.
(x) Prosecute or defend a claim or proceeding in any
jurisdiction for the protection of the estate and of the personal
representative in the performance of the personal representative's
duties.
(y) Sell, mortgage, or lease estate property or an interest in
estate property for cash, credit, or part cash and part credit, and
with or without security for unpaid balances.
(z) Continue a business or venture in which the decedent was
engaged at the time of death as a sole proprietor or a general
partner, including continuation as a general partner by a personal
representative that is a corporation, in any of the following
manners:
(i) In the same business form for a period of not more than 4
months after the date of appointment of a general personal
representative if continuation is a reasonable means of preserving
the value of the business, including goodwill.
(ii) In the same business form for an additional period of
time if approved by court order in a formal proceeding to which the
persons interested in the estate are parties.
(iii) Throughout the period of administration if the personal
representative incorporates the business or converts the business
to a limited liability company and if none of the probable
distributees of the business who are competent adults object to its
incorporation or conversion and its retention in the estate.
(aa) Change the form of a business or venture in which the
decedent was engaged at the time of death through incorporation or
formation as a limited liability company or other entity offering
protection against or limiting exposure to liabilities.
(bb) Provide for the personal representative's exoneration
from personal liability in a contract entered into on the estate's
behalf.
(cc) Respond to an environmental concern or hazard affecting
estate property as provided in section 3722.
(dd) Satisfy and settle claims and distribute the estate as
provided in this act.
(ee) Make, revise, or revoke an available allocation, consent,
or election in connection with a tax matter as appropriate in order
to carry out the decedent's estate planning objectives and to
reduce the overall burden of taxation, both in the present and in
the future. This authority includes, but is not limited to, all of
the following:
(i) Electing to take expenses as estate tax or income tax
deductions.
(ii) Electing to allocate the exemption from the tax on
generation skipping transfers among transfers subject to estate or
gift tax.
(iii) Electing to have all or a portion of a transfer for a
spouse's benefit qualify for the marital deduction.
(iv) Electing the date of death or an alternate valuation date
for federal estate tax purposes.
(v) Excluding or including property from the gross estate for
federal estate tax purposes.
(vi) Valuing property for federal estate tax purposes.
(vii) Joining with the surviving spouse or the surviving
spouse's personal representative in the execution and filing of a
joint income tax return and consenting to a gift tax return filed
by the surviving spouse or the surviving spouse's personal
representative.
(ff) Divide portions of the estate, including portions to be
allocated into trust, into 2 or more separate portions or trusts
with substantially identical terms and conditions, and allocate
property between them, in order to simplify administration for
generation skipping transfer tax purposes, to segregate property
for management purposes, or to meet another estate or trust
objective.
(2) If the personal representative is the state or county
public administrator, all of the following apply:
(a) The personal representative shall not sell the decedent's
real property without approval of the court. If the personal
representative is the county public administrator, and if the
decedent's real property is occupied by an heir of the decedent,
the court shall not approve a sale under this subdivision unless
the court receives written approval of the sale from the state
public administrator.
(b) Unless waived by the court, the personal representative
shall advance any of the personal representative's court filing
fees associated with the administration of the estate.
Sec. 3721. (1) After notice to all interested persons, on
petition of an interested person, on appropriate motion if
administration is supervised, or on the court's own motion, the
court may review the propriety of employment of a person by a
personal representative, including, but not limited to, an
attorney, accountant, investment advisor, or other specialized
agent or assistant, the reasonableness of such a person's
compensation, or the reasonableness of the compensation determined
by the personal representative for the personal representative's
own services. If the personal representative is the state or county
public administrator, all of the following apply:
(a) The court shall review the propriety of the employment as
described in this section.
(b) Except as otherwise provided by the court, if the
decedent's estate includes real property subject to tax or mortgage
foreclosure, real estate fees or fees related to identifying real
property subject to foreclosure, or both, in excess of 10% of the
net proceeds payable to the estate are considered excessive
compensation under this section.
(2) If the court determines under subsection (1) that a person
received excessive compensation from an estate for services
rendered, the court shall order the person to pay an appropriate
refund and may include in the refund amount interest and penalties
as the court considers just.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless Senate Bill No. ____ or House Bill No. 4821 (request no.
02634'17 *) of the 99th Legislature is enacted into law.