Probate Blog
Paw Paw Estate Planning - Probate Law Blog

Closing and Re-Opening an Estate:

Posted December 3, 2018

Pursuant to MCL 700.3951 if the personal representative is unable to complete the administration of the estate within one year of the personal representative's original appointment, the personal representative must file with the court and all interested persons a notice that the estate remains under administration, specifying the reason for the continuation of administration. This may be accomplished by using Notice of Continued Administration. The personal representative must give this notice within 28 days of the first anniversary of his or her appointment and all subsequent anniversaries during which the administration remains uncompleted.

If the notice of continued administration is not filed, an interested person may petition the court for a hearing on the necessity for continued administration or petition for a settlement order under either MCL 700.3952 or MCL 700.3953 (discussed in a subsequent note). If a petition is filed the court hears such petition and grants appropriate relief to ensure prompt estate settlement. If the notice of continued administration is not filed the court will notify the personal representative and all interested persons that the court will close the estate administration and terminate the personal representative's authority within 63 days unless within that time period any of the following occur:

The personal representative files the notice of continued administration, a petition for settlement under MCL 700.3952 or MCL 700.3953, or a sworn statement under MCL 700.3954. An interested person files a petition requesting a hearing on the necessity for continued administration or a petition for settlement under either MCL 700.3952 or MCL 700.3953.

The notice by the court to interested persons that the personal representative has failed to file a notice with the court will be accomplished by the court sending the interested persons Notice of Intent to Close Estate Administration and Terminate Personal Representative's Authority. It should be noted that the court is limited to either responding to the petition of an interested person or to closing its file and terminating the authority of the personal representative. If the required action is not taken by the personal representative or an interested person, the court will close its file and terminate the authority of the personal representative. This will be accomplished by the court signing a Memorandum of Administrative Closing.


The Sale of Property

Posted November 17, 2018

It is often necessary in the administration of an estate for the personal representative to sell both real estate and personal property. The personal representative has the power to do so without permission or other action of the court in all probate administration, including supervised administration. The only exception to this would be where the court has restricted the ability of the personal representative to sell real estate or personal property. Such a restriction would appear upon the letters of authority.

If the personal representative's ability to sell real estate has been restricted or if an interested person is objecting to the proposed sale of real estate, the personal representative may ask the court to confirm such a sale of real estate in a formal proceeding. This may be accomplished by using Petition for Approval of Sale of Real Estate and Order Approving Sale of Real Estate. Any petition must comply with the court rule covering such sales. MCR 5.207 controls the procedure for such a formal proceeding. This rule provides as follows:

  • Rule 5.207 Sale of Real Estate
  • Petition. Any petition to approve the sale of real estate must contain the following:

1. the terms and purpose of the sale,
2. the legal description of the property, and
3. the financial condition of the estate before the sale.

  • Bond. The court may require a bond before confirming a sale of real estate in an amount sufficient to protect the estate.

It would appear that pursuant to MCR 5.125 the interested persons who should receive notice of such a formal proceeding would be:

  • Personal representative, and
  • Other persons who will be affected by the adjudication (such persons among others could be estate beneficiaries whose share would be affected or unpaid creditors in an insolvent estate).

If the personal representative is restricted as to the sale of personal property or if there is a challenge by an interested person to a proposed sale of personal property, the issues regarding the sale would need to be resolved in a formal proceeding asking that the court enter an order approving the sale. The interested persons who would need to receive notice of such a formal proceeding would be the same interested persons as for a proceeding to confirm the sale of real estate.

 

Can the Probate Court Alter My Trust:

Posted October 2, 2018

A court may construe the terms of a trust instrument to carry out the, decedent original Trustee or "settlor", intent. However, an appropriately executed trust instrument is to be given effect according to its terms, and, in determining the settlor’s intent, the court must first look to the expression of intent in the trust instrument and construe the instrument so that each word has meaning, to the extent possible. (extrinsic evidence may be introduced to determine intent only when the estate-planning documents are internally inconsistent). The intent of the settlor as gathered from the entire trust instrument controls an apparently inconsistent term when the inconsistency cannot be reconciled.

Generally, the rules of construction that apply to deeds, contracts, and other written instruments apply to trusts. EPIC also contains specific rules of construction that are applicable to trusts, including the following:

  • An individual who does not survive an event by 120 hours is considered to have predeceased the event.
  • The donor’s intent in requiring that a power of appointment be exercised by specific reference is presumed to be to prevent an inadvertent exercise of the power..
  • Adopted and illegitimate individuals and their descendants are included in class gifts in accordance with the rules for intestate succession.
  • Terms of relationship that do not differentiate between blood relationships and affinity relationships (e.g., nieces and nephews) are construed to exclude affinity relationships.
  • Terms of relationship that do not differentiate between relationships by the half blood and by the whole blood (e.g., brothers and sisters) are construed to include both types of relationships.
  • Antilapse provisions may apply to preserve the interest of a deceased beneficiary for his or her surviving descendants.
  • Multigenerational class gifts that do not specify the manner in which the property is to be distributed among class members are to be distributed according to the laws of intestate succession.
  • Property that is to be distributed by representation is to be distributed on a per capita at each generation basis.
  • Age of majority means the legal age of majority in effect when the trust instrument was executed. MCL 700.2721.

Estate and Protected Individuals Code or EPIC’s express rules for the interpretation of and disposition of property by will, MCL 700.2605–.2608, which previously did not apply to trusts, are now extended to trusts under the Michigan Trust Code. MCL 700.7112.

If the settlor’s intent cannot be determined from the trust instrument, parol evidence is admissible to aid in the construction. Be aware that matters involving the construction of terms of the trust can also be resolved by a proper nonjudicial settlement agreement under MCL 700.7111.

Karam v Law Office of Kliber, 253 Mich App 410; 655 NW 2d 614, (2002).


 

 

 

Disclaimer