HOUSE BILL No. 5983

 

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.