When a petitioner makes an application to the probate court requesting that a conservator be appointed to a minor or an adult with a legal disability, there are two important questions that must be answered. The first question is whether the appointment of a conservator is necessary. The judge (or jury) will have to determine whether the individual is either a minor with property that requires management and protection or an adult unable to manage his or her property or business affairs due to a physical or mental disability. The minor or adult may object to the appointment, an attorney may be appointed to represent the individual, and the petitioner will have to prove the necessity of a conservatorship after witnesses and exhibits are considered in a full-blown trial.
If, after all that, the court determines that a conservator must be appointed, then the judge will have to consider the second important question: who will get to be the conservator? These situations can invite greed from family members eager to obtain access to the ward’s substantial estate. A relative’s desire to become conservator may breed scorn and distrust among other family members who are suspicious about their motives. In the case of multiple interested parties, who will be the one selected to serve in this important role? Fortunately, Michigan law provides some guidance on who would have priority for this appointment.
In appointing a conservator, the following are entitled to consideration for appointment in the following order of priority:
- A conservator, guardian of property, or similar fiduciary appointed or recognized by the appropriate court of another jurisdiction in which the protected individual resides. MCL 700.5409(1)(a).
- An individual or corporation nominated by the protected individual if he or she is 14 years of age or older and of sufficient mental capacity to make an intelligent choice, including a nomination made in a durable power of attorney. MCL 700.5409(1)(b).
- The protected individual’s spouse. MCL 700.5409(1)(c).
- An adult child of the protected individual. MCL 700.5409(1)(d).
- A parent of the protected individual or a person nominated by the will of a deceased parent. MCL 700.5409(1)(e).
- A relative of the protected individual with whom he or she has resided for more than 6 months before the petition is filed. MCL 700.5409(1)(f).
- A person nominated by the person who is caring for or paying benefits to the protected individual. MCL 700.5409(1)(g).
- If none of the persons listed above are suitable and willing to serve, any person that the court determines is suitable and willing to serve. MCL 700.5409(1)(h).
A fiduciary appointed from another state, the spouse, the adult child, the parent or relative of the person to be protected (if ahead in the order of priority) may designate in writing a substitute to serve instead, and that designation transfers the priority for appointment to the substitute. MCL 700.5409(2). If several person have equal priority, the court shall select the person that the court considers best qualified to serve. Acting in the protected individual’s best interest, the court may pass over a person having priority and appoint a person with lower priority or no priority.
The court may require a conservator to furnish a bond. “The bond shall be in the amount of the aggregate capital value of the estate property in the conservator’s control plus 1 year’s estimated income minus the value of securities deposited under arrangements requiring a court order for their removal and the value of land that the fiduciary, by express limitation of power, lacks power to sell or convey without court authorization.” MCL 700.5410(2). If the court determines that the value of cash and property that is readily convertible into cash in the estate and in the conservator’s control exceeds the limit for administering a decedent’s estate under small estate proceedings ($23,000.00 in 2019), then the court shall require the conservator to furnish a bond, unless one or more of the following apply:
- The estate contains no property readily convertible to cash and the cash is in a restricted account with a financial institution. MCL 700.5410(1)(a).
- The conservator has been granted trust powers under section 4401 of the banking code of 1999, 1999 PA 276, MCL 487.14401. MCL 700.5410(1)(b).
- The court determines that requiring a bond would impose a financial hardship on the estate. MCL 700.5410(1)(c).
- The court states on the record the reasons why a bond is not necessary. MCL 700.5410(1)(d).
“Before receiving letters, a conservator must qualify by filing with the appointing court a required bond and a statement of acceptance of the duties of the office.” MCL 700.5412(1). If a person in the order of priority is unable to furnish a bond as required by the court, then they may to be passed over to the next person in line that can post this security. Instead of sureties, the court may accept other collateral for the performance of the bond which can include a pledge of securities or a mortgage of land.
The court may only appoint a professional conservator (e.g. a bank, a local attorney or the county public administrator) if the court finds that the appointment of the professional conservator is in the protected individual’s best interests and there is no other person that is competent, suitable, and willing to serve in that fiduciary capacity. MCL 700.5106(2). The court shall not appoint a professional conservator unless that professional conservator files a bond in an amount and with the conditions as determined by the court. MCL 700.5106(3).
A conservatorship proceeding is a difficult time for all involved. Whether you are the petitioner, another family member or the protected person, you can benefit from the assistance and guidance of a skilled probate attorney on your side. If you or a loved one have questions about conservatorship proceedings or need aggressive legal representation, then do not hesitate to contact the experienced attorneys at Kershaw, Vititoe & Jedinak PLC today.