What Is The Difference Between Formal And Informal Estate Proceedings In Michigan?

 

If a person dies and leaves property behind, then probate administration may be required to ensure that the decedent’s final affairs are wrapped up and that assets are distributed as required under the law.  The probate court will have to determine if there was a last will and testament, determine who the personal representative will be, and determine who the heirs and devisees entitled to inherit are.  In Michigan, the process begins either by applying for informal proceedings by application or by formal proceedings through petition.  This blog article will explain the difference between the two processes.

 

INFORMAL PROBATE PROCEEDINGS

The big difference between informal proceedings and formal proceedings is that informal proceedings are conducted almost exclusively with the probate register while formal proceedings require orders issued directly from the probate judge.  To initiate informal proceedings, the following must be completed and filed with the probate court:

• PC 558 (Application For Informal Probate And/Or Appointment Of Personal Representative (Testate/Intestate))

• $175.00 Filing Fee (plus applicable fees for copies of certified Letters of Authority)

• Death Certificate (or, if not available, alternative documentation of the decedent’s death). MCR 5.302(A)(1).

• Last Will and Testament, if any. “Within 14 days of the filing of the application…, the original will and any codicils must be filed with the court or the case will be dismissed without notice and hearing.”  MCR 5.302(A)(2).

• PC 565 (Testimony To Identify Heirs). This must be signed in the presence of a notary public under penalty of perjury.

• PC 566 (Supplemental Testimony To Identify Nonheir Devisees). This must be completed if the decedent left a last will and testament and ANY of the devisees is not an heir that would have been entitled to inherit if the decedent died intestate.

• PC 568 (Register’s Statement)

• PC 571 (Acceptance of Appointment)

• PC 572 (Letters of Authority)

In addition, “[a] person who desires to be appointed personal representative in informal proceedings must serve notice of intent to seek appointment and a copy of the application on each person having a prior or equal right to appointment who does not renounce this right in writing before the appointment is made.”  MCR 5.309(C)(1).  The order of priority for persons having priority for appointment of personal representative (who are not otherwise disqualified) are as follows:

• The person with priority as determined by a probated will including a person nominated by a power conferred in a will. MCL 700.3203(1)(a).

• The decedent’s surviving spouse if the spouse is a devisee of the decedent. MCL 700.3203(1)(b).

• Other devisees of the decedent. MCL 700.3203(1)(c).

• The decedent’s surviving spouse. MCL 700.3203(1)(d).

• Other heirs of the decedent. MCL 700.3203(1)(e).

• After 42 days after the decedent’s death, the nominee of a creditor if the court finds the nominee suitable. MCL 700.3203(1)(f).

• After 63 days after the decedent’s death, or if the court determines exigent circumstances exist, the state or county public administrator if any of the following apply: (i) No interested person applied or petitioned for appointment of a personal representative within 63 days or the number of days determined by the court under this subdivision after the decedent’s death; (ii) The decedent died apparently leaving no known heirs; or (iii) There is no spouse, heir, or beneficiary under a will who is a United States resident and is entitled to a distributive share in the decedent’s estate. MCL 700.3203(1)(g).

If the applicant already has the highest priority for appointment (e.g. surviving spouse or nominated in last will and testament), then he or she can be appointed personal representative immediately.  If the applicant shares priority to the appointment with other persons (e.g. decedent dies without a spouse or a will and multiple children have the right to the appointment), then there will be additional notice requirement.  The applicant must complete PC 557 (Notice Of Intent To Request Informal Appointment Of Personal Representative) and serve it with the copy of the application on each person with a prior or equal right to appointment “at least 14 days by mail or 7 days by personal service before appointment as personal representative.”  MCR 5.309(C)(2).  In the alternative, those persons with a prior or equal right to appointment can complete PC 567 (Renunciation Of Rights To Appointment) to waive the right to serve as personal representative.  Either the renunciations or the proof of service for the notice of intent to seek informal appointment must be filed with the court with respect to each person with prior or equal right to appointment with the application for informal proceedings.  MCR 5.309(C)(3); MCL 700.3310.

There are some situations where informal proceedings cannot be granted.  For example, the probate register “shall deny an application for informal probate if the probate relates to 1 or more of a known series of testamentary instruments, not including a will and 1 or more codicils to that will, the latest of which instruments does not expressly revoke the earlier.”  MCL 700.3304.  A denial shall also occur if the application indicates the existence of a possible unrevoked will but that instrument is not produced for probate.  MCL 700.3311.  In addition, the probate register may also deny the application if it appears that the purported last will and testament does not meet the legal requirements under the law.  MCL 700.3305.  Finally, the probate register may deny the application for informal appointment of a personal representative if the application is incomplete or the nominee does not appear to be qualified.  MCL 700.3309.  In all cases, this denial is not an adjudication of the case and does not preclude the applicant from petitioning for formal proceedings instead.

In addition, an informal proceeding can become formal proceedings if an interested person has issues with the appointment of the personal representative.  The personal representative is required to complete PC 573 (Notice Of Appointment And Duties Of Personal Representative) and serve it upon all interested persons entitled to notice of the appointment.  MCR 5.304(A).  An interested person who files an objection to the appointment of the personal representative will trigger a formal proceeding before the judge and a petition must be filed instead.  MCL 700.3203(2).   Likewise, a person seeking appointment as personal representative not having priority must do so in a formal proceeding.  MCL 700.3204(2).  In addition, if the probate court believes the proposed personal representative is unsuitable, then that determination can only be made in a formal proceeding.  MCL 700.3204(3).

 

FORMAL PROBATE PROCEEDINGS

There are many reasons why someone would elect to file for formal proceedings of probate even if he or she had the option to file for informal proceedings instead.  The estate can be complex and messy and the petitioner just wants to ensure that all parties are treated fairly by having the judge sign off on decisions.  There may be significant strife and lack of consensus among heirs and devises where decisions such as who should be personal representative and how property should be disposed of cannot be agreed upon.  If there is a chance that the will can be contested, then formal proceedings can be initiated to limit the time that a will contest can be filed (if the estate was opened via informal proceedings, then there is NO TIME LIMIT for someone to file a will contest).  The proposed personal representative may even elect formal proceedings because he or she is inexperienced in probate matters and seeks guidance from the judge.  To initiate informal proceedings, the following must be completed and filed with the probate court:

• PC 559 (Petition For Probate And/Or Appointment Of Personal Representative (Testate/Intestate))

• $175.00 Filing Fee (plus applicable fees for copies of certified Letters of Authority)

• Death Certificate (or, if not available, alternative documentation of the decedent’s death). MCR 5.302(A)(1).

• Last Will and Testament, if any. “Within 14 days of the filing of the application…, the original will and any codicils must be filed with the court or the case will be dismissed without notice and hearing.”  MCR 5.302(A)(2).

• PC 565 (Testimony To Identify Heirs). This must be signed in the presence of a notary public under penalty of perjury.

• PC 566 (Supplemental Testimony To Identify Nonheir Devisees). This must be completed if the decedent left a last will and testament and ANY of the devisees is not an heir that would have been entitled to inherit if the decedent died intestate.

• PC 571 (Acceptance of Appointment)

• PC 572 (Letters of Authority)

• PC 569 (Order Of Formal Proceedings)

Upon the filing of formal proceedings, the court will fix a date and time for a hearing.  The judge may be asked to determine whether the decedent had a valid will or died intestate, who should be appointed personal representative, determine who the heirs and devisees of the decedent are, and even be asked to set aside informal proceedings already in place due to objections.  MCL 700.3401.  The following persons are entitled to notice of this hearing:

• The decedent’s heirs. MCL 700.3403(1)(a).

• The devisees and personal representatives named in a will that is being, or has been, probated or offered for informal or formal probate in the county, or that is known by the petitioner to have been probated or offered for informal or formal probate elsewhere. MCL 700.3403(1)(b).

• A personal representative of the decedent whose appointment has not been terminated. MCL 700.3403(1)(c).

• A person who has filed a demand for notice. MCL 700.3403(1)(d).

• The trustee of a revocable trust as to which the decedent was settlor. MCL 700.3403(1)(e).

If it turns out that the matter is contested on various issues, then the probate court will set the matter for additional proceedings, up to and including a jury trial if necessary to determine the validity of a will.  In contested matters, the following legal principles apply:

• “A petitioner who seeks to establish intestacy has the burden of establishing prima facie proof of death, venue, and heirship.” MCL 700.3407(1)(a).

• “A proponent of a will has the burden of establishing prima facie proof of due execution in all cases and, if the proponent is also a petitioner, prima facie proof of death and venue.” MCL 700.3407(1)(b).

• “A contestant of a will has the burden of establishing lack of testamentary intent or capacity, undue influence, fraud, duress, mistake, or revocation.” MCL 700.3407(1)(c).

• “If a formal proceeding precedes the appointment of a personal representative, the formal proceeding stays an informal appointment proceeding that is pending or that is commenced after the formal proceeding’s commencement. If the formal proceeding is commenced after the appointment of a personal representative and after the personal representative receives notice of the commencement, the personal representative shall not exercise a power of administration except as necessary to preserve the estate or unless the court orders otherwise.” MCL 700.3414(3).

• “After notice to interested persons, including all persons interested in the administration of the estate as successors under the applicable assumption concerning testacy, a previously appointed personal representative, a person having or claiming priority for appointment as personal representative…, the court shall determine who is entitled to appointment…, make a proper appointment, and, if appropriate, terminate a prior appointment found to be improper.” MCL 700.3414(4).

If the matter is uncontested or the outstanding issues are agreed to or adjudicated, then the probate court will issue an Order of Formal Proceedings that admits a will to probate or declares intestacy, appoints a personal representative, and determines who the heirs are.  After this point, no matter whether the estate started as formal or informal proceedings, the personal representatives must still follow the same legal requirements and duties.  The personal representative must complete an inventory, provide notice to creditors and deal with claims, make distributions of property to heirs and devisees, and ultimately close the estate either by sworn statement or a petition for complete estate settlement.

 

SUPERVISED VS. UNSUPERVISED ADMINISTRATION

The concept of informal proceedings and formal proceedings is often confused with the idea of supervised and unsupervised administration.  An estate may become supervised or unsupervised at some point whether or not the personal representative is initially appointed by application or petition.  Estates are unsupervised by default unless an interested person requests or the judge directs that the estate should be supervised.  Supervised administration means the following:

• “Supervised administration is a single in rem proceeding to secure complete administration and settlement of a decedent’s estate under the court’s continuing authority that extends until entry of an order approving estate distribution and discharging the personal representative or other order terminating the proceeding.” MCL 700.3501(1).

• “A supervised personal representative is responsible to the court, as well as to the interested persons, and is subject to directions concerning the estate made by the court on its own motion or on the motion of an interested person.” MCL 700.3501(2).

• “Except as otherwise provided [by law] or as otherwise ordered by the court, a supervised personal representative has the same duties and powers as a personal representative who is not supervised.” MCL 700.3501(3).

“Unless restricted by the court, a supervised personal representative has, without an interim order approving exercise of a power, all the powers of a personal representative under this act, but shall not exercise the power to make a distribution of the estate without prior court order.”  MCL 700.3504.  This means that the supervised personal representative can only distribute and close the estate upon the judge ruling on a petition for complete estate settlement filed by the court.  The fiduciary and attorney fees, final accountings and proposed distributions of personal and real property must be approved by the judge first.

A request for supervised administration may be made in a petition for formal proceedings.  MCR 5.310(B).  “A petition for formal testacy and appointment proceedings including a request for supervised administration may be filed at any time during the estate proceedings if testacy has not previously been adjudicated.”  Id.  “If testacy and appointment have been previously adjudicated, a separate petition for supervised administration may be filed at any time during administration of the estate.”  Id.  Informal proceedings will turn into formal proceedings by petition if a request for supervised administration is later made.

If you need to open an estate, you should consult with a knowledgeable probate lawyer to determine whether it is best to initiate either by formal or informal proceedings.  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.  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.