When is a conservatorship necessary?
1. Appointment can be requested by the individual to be protected.
a. When an individual because of age or physical infirmity is unable to manage his/her property and affairs effectively.
2. Appointment can be requested by another individual.
a. When the individual is unable to manage his/her property and affairs effectively by reasons such as: mental illness, mental incompetency, physical illness or disability, chronic use of drugs, chronic
intoxication, confinement, detention by a foreign power, and disappearance; and
b. The individual has property which will be wasted or dissipated unless proper management is provided;
c. Money is needed for support, care, and welfare of the individual or those entitled to be supported by the individual; and
d. Protection is necessary or desirable to obtain or provide money.
Who may file the petition?
1. An individual mentally competent but due to physical infirmity needs a conservator.
2. An Individual interested in the person's estate, affairs, or welfare.
Where do you file the petition?
1. In the court at the place in this state where the individual to be protected resides whether or not a guardian has been appointed in another place.
2. If the individual to be protected does not reside in this state, in the court at a place where property of the individual is located.
Who are the interested persons?
1. The parents of the individual to be protected; and
2. The individual to be protected if 14 years of age or older; and
3. The presumptive heirs of the individual to be protected; and
4. If known, a person named as attorney in fact under a durable power of attorney; and
5. The nominated conservator; and
6. A governmental agency paying benefits to the individual to be protected or before which an application for benefits is pending.
The following may be additional interested persons required by law or court rule:
1. The Attorney General if the protected person has no known presumptive heirs;
2. Foreign counsel, if required by law;
3. Administrator of Veteran's Affairs, through the administrator's Michigan district counsel if the individual's benefits are payable by the Veterans' Administration;
4. A guardian, conservator, or guardian ad litem of an interested person;
5. A special fiduciary;
6. A person who filed a demand for notice.
Who prepares the Notice Of Hearing?
A petitioner, fiduciary, or other moving party must cause to be prepared, served, and filed, a Notice Of Hearing (Form PC562
). It must state the time and date, the place, and the nature of the hearing.
What must be included in the Proof of Service?
The Proof of Service (Form PC564
) must include a description of the papers served, the date of service, the manner and method of service and the person or persons served.
What are the rights of the individual at the hearing?
The Notice on Petition for Conservator or Protective Order (Form PC668
) must be served on the individual along with the petition, which lists the rights as follows:
a. independent evaluation;
b. To be present at the hearing;
c. To be represented by an attorney;
d. To present evidence at the hearing;
e. To cross-examine witnesses at the hearing;
f. To a trial by jury;
g. To request that the hearing be closed to the public;
h. To nominate a conservator.
Who can waive the right to notice of a hearing and consent to the relief requested in the petition?
a. A legally competent person;
b. A person designated to be served on behalf of an interested person who is a legally disabled person;
c. On behalf of an interested person, whether competent or legally disabled, by an attorney who has previously filed a written appearance.
However, a guardian, conservator, or trustee cannot waive or consent with regard to petitions, motions, accounts, or reports made by that person as guardian, conservator or trustee.
When does the notice have to be served?
1. Personal service - 7 days before the date set for hearing.
2. Mail - 14 days before the date set for hearing.
3. Publication - 14 days before the date set for hearing.
What is the form of the petition and its contents?
Petition For Appointment of Conservator or Protective Order (Form PC639
2. Contents - The petition shall contain specific examples of the individual's recent conduct that demonstrates the need for a conservator's appointment.
What does the Court do upon the filing of a Petition For Appointment of Conservator or Protective Order?
1. Set a hearing date.
2. Appoint a guardian ad litem to represent the individual who is the subject of the petition unless he/she has legal counsel of his/her own choice.
3. If necessary, the court may order that the individual who is the subject of the petition be examined by a physician or mental health professional appointed by the Court.
On what does the Court base a decision?
The Court must find that a basis for a conservator's appointment or other protective order is established by clear and convincing evidence.
A. Fiduciary - Conservators are particular types of "fiduciaries." The word "fiduciary" is a derivative from the Latin word "fides" meaning faith, honest or honor. A fiduciary is one appointed who has a duty to act primarily for the benefit of another. The individual who is protected is called the "protected individual."
B. Inventory - The Inventory (Form PC577
) is a list of the assets in an estate. A conservator (guardian of the estate) must file an Inventory within 56 days from the date of the Letters of Conservatorship. NOTE: Property the protected person owns jointly or in common with others must be listed on the Inventory along with the type of ownership.
C. Accounts - A conservator must make a complete itemized Account of Fiduciary (Form PC583 or PC584) of the administration of the estate to the Court at least once every year. The accounting must show all receipts, disbursements, and sales of property during the accounting period. It will also show the property remaining in the hands of the fiduciary at the end of the accounting period, together with the form of such property. It must also have attached a current account summary or monthly statement from the financial institution. If this accounting is not received by the Court each year, within 56 days following the anniversary date of the appointment, the fiduciary is considered delinquent and subject to serious Court action. However, the Court cannot receive the accounting more than 56 days prior to the anniversary date. The "anniversary date" is the month and day the Judge signed the Letters of Conservatorship.
D. Final Accounts - When the estate is ready for closing, the conservator must file a Final Account (Form PC583 or PC584) and an itemized and complete list of all of the remaining property.
E. Notice - A Notice Of Hearing (Form PC562) and copies of the Inventory and Account(s) must be sent to all interested persons, with the original to be filed with the Court, along with a Proof of Service (Form PC564). The "interested persons" are defined by Court rule and include: 1) the protected individual or ward, if 14 years of age or older and can be located; 2) the presumptive heirs of the protected individual; 3) claimants; and 4) additional interested persons required by law or court rule.
F. Standards of Conduct - Fiduciaries are held to the strictest standards of conduct in regard to estates. If you have a question on whether your proposed action in an estate is lawful, you are advised to contact an attorney for legal advice.
G. Filing on Time - You have a strict obligation to file reports, inventories and accountings on time. Failure to do so can result in your removal as a fiduciary and subject you to a contempt of court action.
H. Commingling of Funds - A fiduciary is absolutely forbidden from commingling his or her own funds or properties together with the ward's assets. The most common violation here is creation of joint accounts. WARNING: If accounts are already joint at the time of your appointment, you should seek legal advice before you make any change.
I. Negligence in Handling the Estate - A fiduciary must handle the assets of the estate with the greatest care. A fiduciary can be held personally liable for failure in this duty. For example: If the fiduciary forgets to pay the insurance and the house burns down, the Court may hold the fiduciary liable for the loss.
J. Loss Through Self-Dealing - A fiduciary must not transact deals where the fiduciary's own self-interest is opposed to his or her duty to the estate.
K. Wanton and Willful Mishandling - A fiduciary may not purposely use the estate in a manner that is against the interest of the estate.
L. Borrowing - A fiduciary may not borrow or use funds of properties from the estate for the fiduciary's own purposes.
M. Tax Returns - The estate might be required to file certain tax returns. It is the fiduciary's duty to file these returns. Therefore, as soon as you are appointed and regularly thereafter, you should determine whether or not you must file tax returns.
N. Pre-Notice Cards: As a reminder, in conservatorships a pre-notice postcard will be sent to the fiduciary the month prior to the due date of the account along with the appropriate form to be completed and filed with the Court.
O. Prudent Investor Rule - A fiduciary shall invest and manage assets needed in a fiduciary capacity as a prudent investor would, taking into account the purposes, terms, distribution requirements expressed in writing and other circumstances of the fiduciary estate. It is important that the fiduciary become familiar with all the aspects of the prudent investor rule.