The prior notes have dealt with beginning a probate estate and ongoing administration of a probate setae. This note will deal with the various options available for continuing and closing such an estate.
Notice of Continued Administration
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 (PC 587). 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:
1. 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 (discussed later in this note).
2. 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 (PC 589). 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 (PC 599).
Summary administration procedure for small estates
Pursuant to MCL 700.3987 if it appears from the inventory and appraisal that the value of the entire estate, less liens and encumbrances, does not exceed homestead allowance, family allowance, exempt property, administration costs and expenses, reasonable funeral expenses, and reasonable, necessary medical and hospital expenses of the decedent's last illness, the personal representative, without giving notice to creditors, may immediately disburse and distribute the estate to the persons entitled to the estate and may file a closing statement as provided by MCL 700.3988. The form which would be filed in this case would be Sworn Closing Statement, Summary Proceeding Small Estates (PC 590). This closing statement must be sent to all estate distributees and to all creditors or other claimants of whom the personal representative is aware whose claims are neither paid nor barred. A full written accounting of the estate administration must be furnished to each estate distributee whose interests are affected. If no objection to the sworn statement is filed within 28 days after the filing date, the register shall issue a certificate of completion. This would be accomplished by using Certificate of Completion / / Supplemental (PC 592). If an action or proceeding involving the personal representative is not pending in the court 1 year after the closing statement is filed, the personal representative's appointment terminates. This procedure is not available to an estate that is in supervised administration.
This summary procedure should always be considered and used when possible. The allowances, cost of administration, funeral bill and costs of last illness would probably now add up to over $50,000 for many estates. Also, dependent children who are not minors may be entitled to homestead and family allowances, and adult children may claim the exempt property allowances. The statements on Form PC 590 should be read carefully. If all of those statements are true, this summary procedure can be used to close estate administration.
Closing estate by sworn statement of the personal representative
Pursuant to MCL 700.3954 unless prohibited by court order and except for an estate being administered in supervised administration, a personal representative may close an estate by filing with the court, no earlier than 5 months after the date of a general personal representative's original appointment, a sworn statement stating that the personal representative has done all of the following:
1. Determined that notice was published and the time limited for presentation of creditors claims has expired.
2. Fully administered the decedent's estate by making payments, settlement, or other disposition of all claims that were presented, of administration and estate expenses, and of estate, inheritance, and other death taxes, except as specified in the statement, including distribution of the estate property to the persons entitled. If a claim remains undischarged, the statement shall state whether the personal representative distributed the estate subject to possible liability with the distributee's agreement or shall detail other arrangements that have been made to accommodate outstanding liabilities.
3. Sent a copy of the statement to all estate distributees and to all creditors or other claimants of whom the personal representative is aware whose claims are neither paid nor barred.
4. Furnished a full accounting in writing of the personal representative's administration to the distributees whose interests are affected by the administration. The account shall clearly state the amount paid out of the estate in fiduciary fees, attorney fees and other professional fees.
The form which would be filed would be Sworn Statement to Close Unsupervised Administration / / Supplemental (PC 591). Pursuant to MCL 700.3958 if an objection to the closing statement is not filed within 28 days after the filing date, the personal representative, the personal representative's sureties, or a successor of either is entitled to receive a certificate from the register that the personal representative appears to have fully administered the estate in question. Since the statute does not require the register to issue the certificate it may be necessary to request it. The Certificate of Completion / / Supplemental (PC 592) will be used to meet this requirement. If a proceeding involving the personal representative is not pending in the court 1 year after the closing statement is filed, the personal representative's appointment terminates. The certificate does not preclude action against the personal representative or the surety.
It should be noted that this procedure is not available for an estate in supervised administration. It also should be noted that the personal representative is required to give the distributees a full accounting of estate administration. Since such an accounting need not be filed with the court, no particular accounting form is required. However, a personal representative can use Account of Fiduciary, Short Form (PC 583) or Account of Fiduciary, Long Form (PC 584) to accomplish this.
Limitation of Actions
Pursuant to MCL 700.3956 unless previously barred by adjudication and except as provided in the closing statement, the right of a successor or creditor whose claim is not otherwise barred against the personal representative for breach of fiduciary duty is barred unless a proceeding to assert the claim is commenced within 6 months after the filing of the closing statement. The right barred under this section does not include the right to recover from a personal representative for fraud, misrepresentation, or inadequate disclosure related to the settlement of the decedent's estate.
Pursuant to MCL 700.3957 unless previously adjudicated in a formal testacy proceeding or in a proceeding settling a personal representative's accounts, or otherwise barred, a claimant's claim to recover property improperly distributed or its value from a distributee are forever barred at the later of 3 years after the decedent's death or 1 year after the time of the property's distribution. However, all claims of the decedent's creditors are barred in accordance with the time periods specified in MCL 700.3803 (claims provisions discussed in a prior note). This section does not bar a action to recover property or value received as a result of fraud.