A personal representative is expected to complete his or her duties regarding the decedent’s estate within a reasonable period of time. In fact, if the personal representative does not complete estate administration within one year of his or her appointment, then he or she “representative shall file with the court and send to all interested persons a notice that the estate remains under administration and specifying the reason for continuation of administration.” MCL 700.3951(1). The personal representative must complete PC 587 – Notice of Continued Administration, file the original with the probate court and serve a copy on all heirs, devisees, creditors and anyone else entitled to notice under the law. “This notice of continued administration must be filed not later than 28 days after the anniversary of the personal representative’s appointment and, if administration remains incomplete, not later than 28 days after each subsequent anniversary of the appointment.” Id.
If this notice of continued administration is not filed as required, the probate court will mail a notice of deficiency to the personal representative and his or her attorney informing them that the estate may be “administratively closed” by the probate court within 63 days unless a sworn statement, petition for a settlement order, or notice of continued administration is filed. MCL 700.3951(3)(a). An administrative closure can be done on the court’s own initiative or on the motion of any fiduciary or interested person. MCR 5.144(A)(1). If the court administratively closes an estate, that means that the personal representative is discharged and the court file is removed as an active case EVEN IF there are still loose ends or tasks that the personal representative must complete. This can lead to serious complications if the estate was in the middle of a business transaction and will cost additional time and money to correct.
The probate court may also administratively close the estate if the personal representative fails to perform other duties according to law such as provide notice to creditors, file an inventory, pay the inventory fee or comply with requests for information. MCR 5.144(A)(2). If a deadline to complete a necessary task has passed, the probate court will send a notice of deficiency to the personal representative and his or her attorney requiring that the issue be corrected within 28 days or, in the alternative, appear for a conference with a court officer within 28 days. MCR 5.203(A). On good cause, the probate court can extend the time for the personal representative to complete a task up to 56 days from the original deadline. MCR 5.203(C). If the deficiencies are still not corrected, then the court can “suspend the powers of the dilatory fiduciary, appoint a special fiduciary, and close the estate administration.” MCR 5.203(D). In addition, the personal representative can also be subject to contempt of court proceedings.
“A fiduciary and an attorney for a fiduciary must take all actions reasonably necessary to regularly administer an estate and close administration of an estate.” MCR 5.206. “If the fiduciary or the attorney fails to take such actions, the court may act to regularly close the estate and assess costs against the fiduciary or attorney personally.” Id. The probate court will issue PC 599 – Memorandum of Administrative Closing which outlines the reasons for administrative closure and then remove the court file as an active case. Many courts will access a financial penalty to the fiduciary. In Macomb County, the probate court will assess $100.00 for the reimbursement of court costs against the personal representative (not the attorney) if the estate is administratively closed. In Wayne County, the probate court will also assess $100.00 for the reimbursement of court costs against the fiduciary and prohibits any individual with an outstanding order from court costs from filing any pleading with the probate court until it is paid.
What if the administratively closed estate needs to be reopened to complete loose ends? MCR 5.144(B) provides the following guidance:
- “Upon petition by an interested person, with or without notice as the court directs, the court may order an administratively closed estate reopened.” Even the personal representative that caused the administrative closure can petition to reopen the estate.
- “The court may appoint the previously appointed fiduciary, a successor fiduciary, a special fiduciary, or a special personal representative, or the court may order completion of the administration without appointing a fiduciary.” It is possible a new personal representative will be appointed if the estate can be completed by an order of assignment or other simplified proceedings.
- “In a decedent estate, the court may order supervised administration if it finds that supervised administration is necessary under the circumstances.” If an estate is supervised, this means that distributions cannot be made to fiduciaries, attorneys or heirs without permission of the court.
Estate administration can be complicated and the number of tasks and deadlines can be overwhelming. However, a personal representative is absolutely entitled to hire an attorney to assist them (at the expense of the estate) to ensure that all duties are being completed according to law. A knowledgeable probate lawyer in your corner can keep you compliant with all deadlines and protect you from the expense and embarrassment of an administrative closure. If you have any questions about probate administration or need legal representation, do not hesitate to contact the experienced attorneys at Kershaw, Vititoe & Jedinak PLC for assistance today.