October 17, 2012, Introduced by Reps. Greimel, Townsend, Ananich, Rutledge, Durhal, Howze, Talabi, Smiley, Brunner, Stanley, Dillon, Segal, McBroom, Foster, Santana, Cavanagh, Geiss, Lane, Switalski, Lipton, Darany, Lindberg, Walsh, Irwin and Oakes and referred to the Committee on Families, Children, and Seniors.
A bill to amend 1998 PA 386, entitled
"Estates and protected individuals code,"
by amending sections 3715 and 5423 (MCL 700.3715 and 700.5423),
section 3715 as amended by 2009 PA 46 and section 5423 as amended
by 2012 PA 173.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3715. Except as restricted or otherwise provided by the
will or by an order in a formal proceeding, and subject 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 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.
(gg) Take control of, conduct, continue, or terminate any
accounts of the decedent on any social networking website, any
microblogging or short message service website, or any electronic
mail service website.
Sec. 5423. (1) Subject to a limitation imposed under section
5427, a conservator has all of the powers conferred in this section
and the additional powers conferred by law on trustees in this
state. In addition, a conservator of the estate of an unmarried
minor, as to whom no one has parental rights, has the powers,
responsibilities, and duties of a guardian described in section
5215 until the individual is no longer a minor or marries. The
parental rights conferred on a conservator by this section do not
preclude a guardian's appointment as provided in part 2 of this
article.
(2) Acting reasonably in an effort to accomplish the purpose
of the appointment and without court authorization or confirmation,
a conservator may do any of the following:
(a) Collect, hold, or retain estate property, including land
in another state, until the conservator determines that disposition
of the property should be made. Property may be retained even
though it includes property in which the conservator is personally
interested.
(b) Receive an addition to the estate.
(c) Continue or participate in the operation of a business or
other enterprise.
(d) Acquire an undivided interest in estate property in which
the conservator, in a fiduciary capacity, holds an undivided
interest.
(e) Invest or reinvest estate property. If the conservator
exercises the power conferred by this subdivision, the conservator
must invest or reinvest the property in accordance with the
Michigan prudent investor rule.
(f) Deposit estate money in a state or federally insured
financial institution including one operated by the conservator.
(g) Except as provided in subsection (3), acquire or dispose
of estate property, including land in another state, for cash or on
credit, at public or private sale, or manage, develop, improve,
exchange, partition, change the character of, or abandon estate
property.
(h) 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.
(i) 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.
(j) Enter for any purpose into a lease as lessor or lessee
with or without option to purchase or renew for a term within or
extending beyond the term of the conservatorship.
(k) Enter into a lease or arrangement for exploration and
removal of a mineral or other natural resource or enter into a
pooling or unitization agreement.
(l) Grant an option involving disposition of estate property or
take an option for the acquisition of property.
(m) Vote a security, in person or by general or limited proxy.
(n) Pay a call, assessment, or other amount chargeable or
accruing against or on account of a security.
(o) Sell or exercise stock subscription or conversion rights.
(p) Consent, directly or through a committee or other agent,
to the reorganization, consolidation, merger, dissolution, or
liquidation of a corporation or other business enterprise.
(q) Hold a security in the name of a nominee or in other form
without disclosure of the conservatorship so that title to the
security may pass by delivery. However, the conservator is liable
for an act of the nominee in connection with the stock so held.
(r) Insure the estate property against damage or loss or the
conservator against liability with respect to third persons.
(s) Borrow money to be repaid from estate property or
otherwise.
(t) Advance money for the protection of the estate or the
protected individual, and for all expense, loss, or liability
sustained in the estate's administration or because of the holding
or ownership of estate property. The conservator has a lien on the
estate as against the protected individual for such an advance.
(u) Pay or contest a claim; settle a claim by or against the
estate or the protected individual by compromise, arbitration, or
otherwise; and release, in whole or in part, a claim belonging to
the estate to the extent that the claim is uncollectible.
(v) Pay a tax, assessment, conservator's compensation, or
other expense incurred in the estate's collection, care,
administration, and protection.
(w) Allocate an item of income or expense to either estate
income or principal, as provided by law, including creation of a
reserve out of income for depreciation, obsolescence, or
amortization, or for depletion in mineral or timber property.
(x) Pay money distributable to a protected individual or the
protected individual's dependent by paying the money to the
distributee or by paying the money for the use of the distributee
to the distributee's guardian, or if none, to a relative or other
person having custody of the distributee.
(y) Employ a person, including an auditor, investment advisor,
or agent, even though the person is associated with the
conservator, to advise or assist in the performance of an
administrative duty; act upon the person's recommendation without
independent investigation; and, instead of acting personally,
employ an agent to perform an act of administration, whether or not
discretionary.
(z) Employ an attorney to perform necessary legal services or
to advise or assist the conservator in the performance of the
conservator's administrative duties, even if the attorney is
associated with the conservator, 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.
(aa) Prosecute or defend an action, claim, or proceeding in
any jurisdiction for the protection of estate property and of the
conservator in the performance of a fiduciary duty.
(bb) Execute and deliver an instrument that will accomplish or
facilitate the exercise of a power vested in the conservator.
(cc) Respond to an environmental concern or hazard affecting
property as provided in section 5424.
(dd) Take control of, conduct, continue, or terminate any
accounts of the protected individual on any social networking
website, any microblogging or short message service website, or any
electronic mail service website.
(3) A conservator shall not sell or otherwise dispose of the
protected individual's principal dwelling, real property, or
interest in real property or mortgage, pledge, or cause a lien to
be placed on any such property without approval of the court. The
court shall only approve the sale, disposal, mortgage, or pledge of
or lien against the principal dwelling, real property, or interest
in real property if, after a hearing with notice to interested
persons as specified in the Michigan court rules, the court
considers evidence of the value of the property and otherwise
determines that the sale, disposal, mortgage, pledge, or lien is in
the protected individual's best interest.