Continuing, Closing, Reopening 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:
- 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).
- 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 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:
- Determined that notice was published and the time limited for presentation of creditors claims has expired.
- 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.
- 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.
- 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 ( PC 583) or Account of Fiduciary (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 an action to recover property or value received as a result of fraud.
Order of Complete Estate Settlement
Pursuant to MCL 700.3952 a personal representative or an interested person may petition for an order of complete estate settlement. This is a formal proceeding which offers a procedure to settle all issues in closing an estate. It gives the personal representative the protection of the conclusiveness of a court order. This procedure is available for all estate proceedings whether or not they were begun by informal or formal proceedings. If formal testacy has not been determined, such a determination can be asked for if it is desired before final distribution. An estate proceeding in supervised administration must be closed in this manner. The personal representative may petition at any time, and an interested person may petition after 1 year from the original personal representative's appointment. However, the court shall not accept a petition under this section until the time expires for presenting a claim that arises before the decedent's death.
A petition for an order of complete estate settlement may request the court to determine testacy, if not previously determined, to consider the final account, to compel or approve an accounting and distribution, to construe a will or determine heirs, and to adjudicate the estate's final settlement and distribution. There are two court form that may be used depending upon whether testacy was or was not previously adjudicated. The forms are Petition for Complete Estate Settlement, Testacy Previously Adjudicated ( PC 593) and Petition for Adjudication of Testacy and Complete Estate Settlement ( PC 594). Schedule of Distribution and Payment of Claims ( PC 596) may be used as an attachment for either petition. If there is a request for an adjudication of testacy, there must also be a determination of heirs. It is contemplated that as a part of this procedure the personal representative will request to be discharged. Pursuant to Michigan Court Rule (MCR) 5.311(B)(3) a personal representative filing a discharge request must also file additional papers with the court so the court can make a determination that the estate has been properly administered. Those papers and proof of service for them are as follows:
- Notice of Appointment
- Fees notice pursuant to MCR 8.303
- Notice to spouse
- Notice of continued administration
- Affidavit of any required publication
- Tax information concerning inheritance or estate tax
- Any other papers which the court may require
Pursuant to MCR 5.125(C)(8) the persons interested in a petition for an order of complete estate settlement under MCL 700.3952 or a petition for discharge under MCR 5.311(B)(3) are the:
- Devisees of a testate estate
- Heirs unless there has been an adjudication that decedent died testate or if there is a pending request for determination of heirs
- Such other persons whose interests are affected by the relief requested
Pursuant to MCL 700.3952(3) a method is provided for curing any prior oversight as to notice of an interested person during estate administration. Such an interested person may now be given notice and such notice in the absence of objection will fully adjudicate the interested person's interest.
After notice to all interested persons and a hearing, the court may enter an order or orders, on appropriate conditions, determining the persons entitled to distribution of the estate, and as circumstances require, approving settlement, directing or approving estate distribution, and discharging the personal representative from further claim or demand of an interested person. To accomplish this the court will use Order for Complete Estate Settlement ( PC 595). After the personal representative files evidence of payment of claims and distributions as set forth in the Order for Complete Estate Settlement and the court is satisfied that estate administration is complete, the court will issue Order of Discharge ( PC 597). This order will terminate the personal representative's authority and close estate administration.
Order Construing Will Without Adjudication of Testacy
Pursuant to MCL 700.3953, a personal representative administering an estate under an informally probated will or a devisee under an informally probated will may petition for a settlement order for the estate that does not adjudicate the decedent's testacy status. This provision is very similar to a petition for a complete settlement order. However, such a petition may be filed only in an estate being administered under a will admitted to probate in an informal proceeding. The petition may not contain a request for a determination of the decedent testacy status in a formal proceeding. This procedure is not available if the estate is in supervised administration or if it appears that a part of the estate is intestate. The personal representative may petition at any time, and a devisee may petition after one year after the original personal representative's appointment. However, the court shall not accept a petition under this procedure until the time expires for presenting a claim that arises before the decedent's death.
A petition under this procedure may request the court to consider the final account, to compel or approve an accounting and distribution, to construe the will, or to adjudicate the estate's final settlement and distribution. Since it is not contemplated that this procedure will be often used, there are no approved forms for the procedure and any such petition and order would have to be individually drafted. The personal representative may request to be discharged as a part of this procedure. Pursuant to Michigan Court Rule (MCR) 5.311(B)(3) a personal representative filing such a request must also file additional papers with the court so the court can make a determination that the estate has been properly administered. Those papers were previously described above.
Pursuant to MCR 5.125(C)(9) the persons interested in a petition for an estate settlement order under MCL700.3953 are the:
- Personal representative
- Such other persons whose interests are affected by the relief requested
After notice to all interested persons and a hearing, the court may enter appropriate orders, on appropriate conditions, determining the persons entitled to distribution of the estate under the will, and , as circumstances require, approving settlement, directing or approving estate distribution, and discharging the personal representative from further claim or demand of a devisee who is a party to the proceeding and those the devisee represents. After the personal representative files evidence of payment of claims and distributions as set forth in any Order and the court is satisfied that estate administration is complete, the court will issue Order of Discharge ( PC 597). This order will terminate the personal representative's authority and close estate administration.
Reopening a Closed Estate
Pursuant to MCR 5.312 if there is good cause to reopen a previously administered estate, other than an estate that was terminated in supervised administration, any interested person may apply to the register to reopen the estate and appoint the former personal representative or another person who has priority. For good cause and without notice, the register may reopen the estate, appoint the former personal representative or a person who has priority, and issue letters of authority with a specified termination date. In all other cases, an interested person may file a petition under MCL 700.3959.
Pursuant to MCL 700.3959 if estate property is discovered after an estate is settled and either the personal representative is discharged or 1 year has expired after a closing statement is filed, or if there is other good cause to reopen a previously administered estate, including an estate administratively closed, upon petition of an interested person and notice as the court directs, the court may appoint the same personal representative to administer the subsequently discovered estate. A claim previously barred shall not be asserted in the subsequent administration.
The two above mentioned provisions give interested persons two choices as how to reopen an estate unless the estate was closed while in supervised administration. If closed while in supervised administration, the estate can only be reopened by a petition in a formal proceeding. The court rule allows the register to issue the order reopening an estate without notice in all other cases and the statute allows for reopening the estate by petition in all cases. A request to reopen the estate may be filed on / /Application / /Petition to Reopen Estate ( PC 607). It should be noted that in estates closed by a sworn statement pursuant to MCL 700.3954, the personal representative would have authority to act during the one year period following the filing of the sworn statement without being reappointed.
Closing a Reopened Estate
Pursuant to MCR 5.311(C) after the completion of the reopened estate administration, the personal representative shall proceed to close the estate by filing a petition under MCL 700.3952, MCL 700.3953 or a supplemental closing statement under MCL 700.3954. If a supplement closing statement is filed, the personal representative must serve a copy on each interested person and file a proof of service with the court. The Sworn Statement to Close Unsupervised Administration / / Supplemental ( PC 591) is used with the supplemental box checked. If an objection is not filed within 28 days, the personal representative is entitled to receive a supplemental certificate of completion. The Certificate of Completion / / Supplemental ( PC 592) is used with the supplemental box checked.