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Do I need court authority to sell real estate?

Yes.  A conservator cannnot sell real estate or an interest in real estate without first petitioning the court for authority.  At a hearing after notice to interested persons, the court must consider evidence of the property's value and otherwise determine the sale to be in the individual's best interest.

Why is real estate treated differently from other types of assets?

There may be several reasons.  First, the sale of real estate changes the property to a liquid asset, with greater opportunity for misappropriation.  Second, a conservator does not have authority to determine where an individual lives; sale of the individual's home can certainly have an impact on the individual's choices.

In deciding whether to sell real property, what should I consider?

 - Does the individual, a spouse or any of the individual's minor children live in the home?  If not, might the individual move back to the home?

 - Is the property part of the individual's estate plan, through will or joint tenancy?

- Are there other assets to sell first, if resources are needed for the present needs of the individual?

 - Is renting the property a viable alterative?

If the real property is the individual's home, no.  If it is income property, it will depend on the rate of return.  If it is vacation property, likely yes.

Should I sell the home if the individual is in a nursing home?

Consider the possibility the individual may be able to return home.  Regardless, the home and contents will remain an exempt asset for Medicaid purposes.

See how the home factors in to the individual's estate plan.  Finally, weigh heavily the importance of the home to the individual, and the grave effect sale may have on his or her outlook.

Can I purchase the property myself?

Whatever authority you are given in your letters, you may not purchase the property unless you obtain prior court approval.  In any transaction, make sure you tell the judge whether you, a family member, or anyone you have a business relationship with is the prospective purchaser.

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Can I sell real property on land contract?

Though a cash sale is preferable, the court will consider approving a short term land contract if that is the best offer or only option available.

Do I need the court's approval before I take initial steps to sell the property?

No.

What should be my first steps?

 1. Seek a professional and arrange for an appraisal of the fair market value of the property.

 2. Decide on a selling strategy, which may include listing the property with a real estate agent.

 3. When you sign a purchase and sale agreement, make sure you sign as conservator, and the document states    the sale is contingent upon probate court approval.

 4. Set a closing date far enough in advance so you have time to obtain court approval.

 5. Petition the court for approval, with notice to all interested parties.

  PC 646 - Petition for Approval of Sale of Real Estate

 1. The court will set a date for a hearing.

 2. The court will often appoint a guardian ad litem to investigate and report whether a sale is in the individual's best interest,  whether the sale price reflects fair market value, and whether terms of the sale are acceptable.

 3. At the hearing, the court will likely ask you to file additional bond in the amount of the sale.

 4. If the court approves the sale, you can then proceed to closing.

 1. Record a copy of the court order of confirmation and the deed with the county Register of Deeds.

 2. Deposit the net proceeds of the sale in the conservatorship account.

 3. Show the sale as an exchange of assets on the next annual account you file with the court.

Your letters of conservatorship may allow you to mortgage the property.  But you can still go through the same steps as for a sale, giving the court the reason or reasons for mortgaging the property.

Can I consider a reverse equity mortgage?

Yes.  This may make sense for an individual who wishes to remain at home, but has insufficient income to maintain the property and pay the taxes.

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Am I required to meet with the individual?

There is no provision in the law that requires you have face-to-face contact with the individual.  It may make sense to have meetings, and may allow you to better perform your job.

It may be particularly important to visit if the individual does not have a guardian to communicate the individual's needs to you.

What are some purposes of visits?

One purpose is to ensure needs of the individual are determined and covered.  This is important both for individuals living in their own homes and for those in nursing homes or adult foster care homes.

If you are a professional or volunteer, visits can also be a means to develop a relationship of trust and to learn more about the wishes of the individual.

Should I arrange visits in advance?

You should honor the wishes of the individual in this regard.

Can a nursing home restrict my access to the individual?

No.

How often do I need to be in contact with individual?

The extent of direct contact through meetings or telephone calls depends on the needs of the individual and whether there is a guardian.

Can I reimburse myself for out-of pocket expenses?

Yes.  Following are some expenses you might have, for which you can reimburse yourself:

 - court filing fees

- Xerox copies of court papers or financial records

 - postage

- long distance telephone calls

 - automobile mileage related to conservatorship duties

You should keep a detailed record of all out-of-pocket expenses and include them as a category on your annual account.  You can minimize out-of-pocket expenses by paying by check from the conservatorship account whenever possible.

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Do I need court approval prior to reimbursing myself for these expenses?

No.

How should I reimburse myself for these expenses?

You could write yourself a check once a month.  You should not reimburse yourself by making cash withdrawals from the conservatorship account.

If I provide room and board to the individual, may I charge for these services?

If you, your spouse, or your child wish to charge for room and board, you must first get approval of the probate court.  Charges will only be approved if reasonable.

Can I charge for my time spent on conservatorship duties?

Yes.  As conservator, you are entitled to reasonable compensation.  All fees are subject to court approval.

Should I charge a fee for my services?

You must decide whether you feel comfortable charging a fee.  Oftentimes a conservator will not charge a fee if serving for a family member or friend.

If you decide to charge, you may do so for time spent on professional duties as conservator, but not for time devoted to your personal relationship with the individual.

Can I seek court approval before taking the fee?

Yes.  The fee arrangement can be set forth in the order establishing the conservatorship.  Regardless, you must show all fees you have taken or propose to take on the annual account.

How much can I charge?

A court may have established a fee schedule or an hourly rate, or decide in each case whether requested fees are just and reasonable.

If an individual receives Veterans' benefits, the fee cannot exceed 5 percent of the individual's income, without a court hearing with notice to the Veterans Administration.

What factors might the court consider in determining whether a fee is reasonable?

A judge might look at the amount of time spent and efficiency; the dollar value of the estate; the complexity of the tasks undertaken; and the degree of expertise of the conservator.

You should keep accurate time records to support any request for fees.  If fees are questioned, the burden is on you to show they are reasonable and for necessary services.

What if I am both guardian and conservators?

The court will usually approve one amount, covering your services as guardian and conservator.

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What are my obligations to report to the court?

A conservator must file an account annually, although the court can request an account at any time.

What is an account?

An account shows money and property received during the year as conservator, and expenses and other disbursements.

An account also shows the value of the estate at the beginning of the period, and has a list of assets remaining at the end of the account period, together with the value of each asset.

Are there court forms to use for the account?

Yes, you have a choice of two forms.  Use the second form only if you have sold assets such as real estate or stocks and bonds during the year.

Blank forms are available at no cost from the probate court office.

 PC 583 Account of Fiduciary

PC 584 Account of Fiduciary

How detailed should an account be?

Receipts and expenses can be listed by category.  For example, the total amount of private pension checks received during the year, or the total amount paid for nursing home care can be listed on single lines.

Must a conservator account for social security payments?

If you are also representative payee, you account annually to the Social Security Administration for those funds.  In some counties, the probate court does not require you to also account for those funds to the court.

In other counties, the court requires you to account for all funds received, regardless of source.  It is safe for you to choose this course.

What are categories of income and receipts I might use?

 Categories might include:

 - Social Security

- Veterans Benefits

- Pension

- Interest

 - Dividends

- Health insurance reimbursement

 - Income tax credits

- Other (specify source)

What are some categories of expenses I might use?

 Categories might include:

 - Housing

- Food

- Clothing

- Medical

- Dental

 - Weekly or monthly allowance

 - Transportation

- Attorney fees

 - Other (specify)

What else might the account show?

The account might show as expenses any conservator fees earlier approved by the court, or include a request for approval of fees "earned" but not yet paid.

What is the period of time my first account covers?

The account will usually cover the one year period beginning with the date your letters of authority are signed and ending on the anniversary date.

When is my first annual account due?

The annual report is due each year within 63 days of the anniversary of your letters of authority.

The due date for the report is important - write it down on your calendar each year.  You will not receive a reminder notice.

What happens if I can't get my account in on time?

You should request an extension, preferably before the due date.  If you fail to file an account, you will receive a notice of omission. Act promptly by contacting the probate court.

If you do not file an account after receiving a notice of deficiency, the court may suspend your powers and later remove you as conservator.

PC 600  Notice of Deficiency

Yes, you should include such transactions even though there may be no specified line for them.  A new transaction would appear on both sides of the ledger, as there is both "income" and "expenditure" in equal amounts.

How might I make it easier to complete the account?

The more accurate and detailed records you keep during the year, the easier it will be to complete the account.

With what figures do I begin?

The starting point for your first account is the value of the estate as shown in the inventory you filed.

The starting point for future accounts is the balance on hand at the end of the previous account period.

Should I attach any documents or information to the account?

You can attach a confirmation of bank balance or mutual fund balance from a bank or mutual fund where funds are held.

Should I discuss the account with the individual before I file it?

It may be helpful to the individual to do so.

Is there a court fee for submitting the annual account?

Yes, the fee is $20.00. The fee is payable out of the individual's estate.

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To whom must I send a copy of the account?

You must send a copy to the individual and to each interested party shown on the initial petition for conservatorship.  You should deliver a copy to the individual in person.  After doing this, file a proof of service with the court.

What if the individual receives benefits from the Veterans Administration?

If you control a benefit the individual receives from the Veterans Administration, send a certified copy of the account to the VA regional office.

What if there are no interested parties?

You must send a copy of the account to the Michigan Attorney General. The address of the Attorney General is:

  Law Building
  P.0 Box 30212
  Lansing, MI 48909

When I file the account with the court, will court staff ask for proof of expenses I have made?

Court staff have authority to request proof of expenses, which are usually in the form of canceled checks.  Some counties do this routinely, others only if there are questions about the account.

When I file the account, will the court set a date for a hearing?

In some counties, the court will hold a hearing each year.  In other counties, the court has set a different policy, such as a hearing every three years or only upon termination of the conservatorship.  Those courts may require you file a Waiver and Consent signed by each interested party.

A hearing will ordinarily be held if any interested party objects to the account, the conservator requests a hearing, or if the court notices irregularities.

PC 561 Waiver/Consent

PC 585 Petition and Order Allowing Account

A hearing provides opportunity for interested parties to object, and for the court to act upon a request for approval of attorney and other professional fees and conservator fees.

Will the court appoint a guardian ad litem?

The court may appoint a guardian ad litem to review the account and make a recommendation to the court.

Can I permanently change the date upon which the annual account is due?

If you contact the court in writing, the court can change the date to one more convenient to you.  No account, however, should cover a longer period than 12 months.

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Last Updated 1-1-04

Send your comments, questions and suggestions to Phil Harter at 161 E Michigan Avenue, Battle Creek, Michigan 49014 or
e mail to pharter@calhouncountymi.gov