PROBATE

WHAT IS PROBATE?

There are many situations where a person or family can find themselves in probate court.  Most of the time when you hear someone refer to probate court, they are referred to the court process that occurs when someone passes away.  However, what many people fail to recognize is that if you do not have the proper documents in place, you could end up in probate court during your lifetime as well.  Below we detail the different types of probate involvement and how to make sure you understand how to avoid it!

GUARDIANSHIP

A legal guardian is someone appointed by the probate court to make medical decisions and placement decisions for another individual, commonly referred to as the ward. 

Guardians are usually used in three different situations:  guardianship for an incapacitated adult, guardianship for a minor, and guardianship for a developmentally disabled adult.

The process of becoming someones guardian starts with the Petition for Guardianship being filed with the probate court in the county where the individual resides.  The court will set that matter for a hearing and appoint a Guardian Ad Litem (GAL).  The role of the GAL is to meet with the proposed ward, talk to the other parties involved, and investigate what is in the persons best interests.  The GAL will make a report to the probate judge as to their findings.  They will also determine if an attorney should be appointed for the proposed ward, whether the proposed ward wants to object to the petition and whether they want to be present at the hearing.

At the hearing the proposed ward has the ability to request that an independent medical exam (IME) be done by a physician on the courts approved physician list.  

Unfortunately, even though this process is in place to protect an individual, it can be a stressful and confusing process.  Most people do not understand the job of the GAL and are hesitant to answer all the personal questions he or she may ask.  Additionally, the proposed ward usually does not like the hearing in open court regarding their business and family dynamics.  Many times, the proposed ward, sometimes at the instigation of other children, will be angry with the person that files the petition and feel as if they are acting against them, when in reality, most times, they are only trying to help them. 

Above all this, there are several fees associated with this process.  There is the initial filing fee to the court, there will be a fee paid to the GAL and court appointed attorney, if applicable, and an attorney fee if you decide to retain an attorney to help you through the process.

After being appointed guardian for someone, you will need to do an Annual Report on Condition of Ward, which updates the court on the ward’s whereabouts, living arrangement, physical and mental health, and whether the need for a guardian still exists.

That all being said, with the proper planning by your estate planning attorney, a guardianship is easy to avoid by signing a Designation of Patient Advocate, as long as you do it prior to becoming incapacitated.   You have to have the mental capacity to understand what you are signing.  So many times clients call our office saying that their mom or dad is incompetent and they need to get a Designation of Patient Advocate for them so that they can start making medical decisions on their behalf.  At that point, it is to late.  They will need to file for guardianship with the probate court.  Everyone should have a Designation of Patient Advocate in place because you never know when a medical issue or emergency will arise, and, if it does, you want to be able to decide who will make decisions for you in the easiest and cheapest way possible.

CONSERVATORSHIP

A conservator is someone appointed by the probate court to protect the property and make financial decisions for another individual.

Usually filed with the Petition for Guardianship, the conservatorship process starts with the filing of a Petition for Appointment of Conservatorship with the probate court in the county in which the proposed ward resides.  The probate court will then schedule the matter for a hearing, and usually appoint a Guardian Ad Litem (GAL).  The GAL is an attorney in the county that will act as an independent person to be the eyes and the ears of the court.  The GAL will meet with the individual to discuss the petition, determine if they need an attorney appointed for them, see if they wish to object to the petition and if they want to be present at the hearing.

The court will hold a hearing in open court regarding whether a person needs a conservator.  Under Michigan law and pursuant to MCL 700.5401(3), the court may appoint a conservator, if the court determines both of the following: (a) 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 (b) 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.

Like the guardianship process, filing a Petition for Conservatorship, can be a stressful process.  Most people do not understand the job of the GAL and hesitant or refuse to answer questions regarding their assets and finances.  The court hearing is usually stressful for all involved.  Most people do not like to talk about their medical issues, assets, and family dynamics in a public forum, such as the probate court.

Additionally, there is a fee to file the petition, there is a GAL fee to be paid, and there are attorney fees, if you decide to retain an attorney or if there is an attorney appointed for the proposed ward.

The most burdensome part of the conservatorship is the required, annual accounting that must be filed.  Upon being appointed as the conservator, you will need to file an Inventory of assets.   After this initial filing, will need to account for all income, all expenses and remaining assets with the court each year.  This is done by going line by line through 12 months of bank statements and explaining and categorizing each transaction.  Each transaction will need to be supported by a bill, receipt, canceled check, or other type of proof showing what the money was spent on.  We always suggest that our clients opt to have all canceled checks printed at the end of each monthly bank statement.  This way you do not have to hunt for canceled checks a year later.

You can do your own accounting; however, it is very tedious and time consuming.  Most clients opt to higher the attorney to do the accounting for them.  

Once your annual Accounting is done.  You will have to file it with the probate court, which will again set the matter for a hearing.

As you can see, this can be a very time consuming, stressful, and costly process that most be want to avoid, if possible.  Luckily, by signing a Durable Power of Attorney, you can appoint someone to make financial decisions for you with no court involvement.  Just like your Patient Advocate, you have to have the mental capacity to sign a Durable Power of Attorney.  If you cannot understand what you are signing it is to late.  A Conservatorship will be necessary.  This is why it is so important to have these documents done well in advance of ever needing them.

DECEDENT ESTATE

A decedent’s estate is necessary when a person passes away leaving assets in just their name.  There are three ways to avoid probate: (1) joint ownership, (2) beneficiary designation, and (3) a trust.  Once someone passes away, you have to check each individual asset and see whose name is on it, if it has a beneficiary, or whether it is owned by a trust.  Whichever assets do not fall into one of the three categories, will have to go through probate.

You will have to open the probate estate in the probate court in the county in which the decedent resided at the time of passing.  The probate judge will open the estate, admit the Last Will and Testament, if there is one, and appoint a Personal Representative.  

Once you have your probate estate open, the Personal Representative will have to file an Inventory of assets as of the date of death.  All documents filed with the probate court will need to be mailed to all interested parties.

The Personal Representative will then have to file a creditors notice in the county’s legal news.  This will allow any creditors a 4 month window in which they have to file a claim on the estate, which will limit liability.  

The Personal Representative will then start to consolidate all the assets, pay any necessary bills, sell any real estate, and prepare to distribute assets to the appropriate people.  This will either be the people, or entity named, in the Last Will and Testament or the heirs-at-law.

The estate must stay open for a minimum of 5 months.  In the end, having to go through probate is not the end of the world; however, it takes time and money and is so easy to just avoid with the proper planning.  One additional risk of having this go through probate is that you are opening up an arena for families to argue in.  Without an estate having to be opened, family members have go through more steps and expense to contest things, which can often deter legal actions.

PROTECTIVE ORDERS

A Petition for Protective Order is requesting the probate judge to enter an order, which is legally enforceable, that either orders someone to do something or prevents them from taking a specific action.  

Protective Orders can be used in many different applications.  We use Protective Orders when a full Guardianship or Conservatorship is not necessary, but there is one specific action that need to be ordered by the probate court.  The benefit is there is no continuing file that stays open with the court; and, therefore, there is not annual reporting or filing requirement.  Upon completion of the hearing and the order being entered, the probate file will be closed.


CASE STUDY #1: Dad is in a Comatose State, No Patient Advocate.

Jack is 89 and in the hospital in a comatose state.  Clearly, Jack is unable to make medical decisions for himself and has no patient advocate in place.  The family will need to file for guardianship for Jack to be able to start making decisions.  Jack’s daughter, Sue, goes to probate court and fills out and files the petition.  The court then sets the matter for hearing three weeks out.  Prior to this hearing, a GAL goes out to meet Jack, assesses the situation, and writes a report to the court.  Three weeks later, Sue is appointed as Jacks’ guardian and may now start making decisions for him. 

CASE STUDY #2: Dad has Dementia, No Durable Power of Attorney for IRAs.

Jim is 78 and has advanced dementia.  He has been married to Jane for the last 57 years.  During their marriage, Jim was the breadwinner of the family while Jane raised the children and tended to the home.  Because of this, most of the couples assets are held within Jim’s IRA.  Jane needs to start bringing in care for Jim within their home; however, she needs access to Jim’s IRA in order to do it.  Because Jim’s dementia is so advanced, he is no longer able to sign.  Jane cannot sign to withdraw money because with an IRA it cannot be owned jointly with the spouse.  Jane is only the beneficiary in the event Jim passes away.  Most spouses do not realized this.  Had Jim done a Durable Power of Attorney prior to becoming incapacitated, Jane would have immediate access to his IRA to take out money to pay for his care.  Now, Jane has to apply for conservatorship of Jim through the probate court and request permission to make a withdrawal.  After going through all the time and expense explained above, approximately 3 weeks later, Jane may have access to Jim’s IRA.

CASE STUDY #3: Dad Passed Away, No One on Bank Accounts or House.

John passed away.  His children come into out office and say we need to gain access to the bank account to pay for the funeral and move the house into our names.  Because John never did any estate planning, we will need to open a decedent’s estate through the probate court before anyone can gain access to any assets.  The court will appoint one of the children as the personal representative, who will then be able to start to administer the estate.  

FREQUENTLY ASKED QUESTIONS

What is the Filing Fee to open a Guardianship, Conservatorship, or Decedent’s Estate?  $175.00 for each file.

I filed a petition, do I have to serve the Interested Parties? 

Yes. Once you have filed a petition with the probate court, and the court has scheduled a hearing date, if necessary, you must notify the interested parties of this petition and hearing within a certain amount of days before the hearing in order to satisfy due process requirements. 

For Personal service: You may serve an individual personally (i.e., by hand delivery) by giving him/her relevant documents at least 7 days prior to the hearing. 

For Mail service: You may serve an individual by mailing copies of the petition and Notice of Hearing to him/her at least 14 days prior to the hearing. 

For Publication: You must serve an individual whose whereabouts are unknown by publishing a notice of the hearing in the Macomb County Legal News at least 14 days prior to the hearing.

Who is an Interested Party that must be served?  

Court rule specifies the following individuals as interested persons in a petition for conservator: 

• the individual to be protected (if 14 years of age or older) – personal service only 

• the alleged protected individual’s presumptive heirs – 

• a spouse is a presumptive heir

• any children (or descendants of deceased children) are presumptive heirs, but if there are none of these, then parents (or descendants of parents if they are deceased) are presumptive heirs; 

• a governmental entity paying benefits to the individual to be protected (or before which an application for benefits is pending) – e.g., Social Security* or Administrator of Veteran’s Affairs*; 

• the nominated conservator; 

• a person named as attorney in fact under a durable power of attorney; 

• the guardian, conservator, or guardian ad litem of any interested person. 

If any interested person, other than the individual to be protected, is under a disability (e.g., a minor, mentally incapacitated), someone else must receive service for that person. For a minor, if there is a parent who is not the petitioner, that parent can file an Appearance of Parent for Minor in order to receive service. For other situations, a guardian ad litem may need to be appointed so service can be received.

HOW CAN WE HELP?

The attorneys at SSR Law Offices are experienced in all probate matters and understand that many of these matters are very emotionally charged.  Our main goal is to  make this process as easy and stress-free as possible.   The Attorneys at SSR Law Offices will:

  • Evaluate your case to see if a full estate or a small estate is necessary;
  • Give you a list of documents needed to open the probate estate;
  • Fill out all Probate Court forms on your behalf;
  • Fill all forms and get the Decedent’s Estate open for you;
  • Send a copy of all documents filed with the Probate Court to all the interested parties;
  • Help you to determine which assets are going through probate and which assets should be placed on your Inventory;
  • File your Inventory with the Probate Court;
  • File your Notice to Creditors to cut your liability down to 4 months;
  • Advise on ways to consolidate assets;
  • Determine if appraisals and/or estate sales are necessary;
  • Act as the intermediary to beneficiaries of the estate; and
  • Advise the Personal Representative on distributing assets.

 Call our office at 586-239-0871 today for your strategy session to see if we are able to help you!