Bill Text: MI HB5194 | 2009-2010 | 95th Legislature | Introduced

---

Bill Title: Probate; guardians and conservators; power of conservator to mortgage or place lien on protected individual's home; require prior court approval. Amends secs. 5422 & 5423 of 1998 PA 386 (MCL 700.5422 & 700.5423). TIE BAR WITH: HB 4619'09, HB 5192'09

Spectrum: Partisan Bill (Democrat 40-0)

Status: (Introduced - Dead) 2009-07-15 - Printed Bill Filed 07/15/2009 [HB5194 Detail]

Download: Michigan-2009-HB5194-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 5194

 

 

July 14, 2009, Introduced by Reps. Coulouris, Meadows, Byrnes, Scripps, Liss, Roberts, Haase, Womack, Kennedy, Slavens, Haugh, Kandrevas, Constan, Durhal, Polidori, Terry Brown, Leland, Valentine, Segal, Spade, Miller, Geiss, Roy Schmidt, Bauer, Tlaib, Lemmons, Dean, Ebli, Gregory, Robert Jones, Donigan, Gonzales, Mayes, Sheltrown, McDowell, Neumann, Lahti, Lisa Brown, Bettie Scott and Jackson and referred to the Committee on Judiciary.

 

     A bill to amend 1998 PA 386, entitled

 

"Estates and protected individuals code,"

 

by amending sections 5422 and 5423 (MCL 700.5422 and 700.5423),

 

section 5423 as amended by 2005 PA 204.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 5422. (1) A person who in good faith either assists or

 

deals with a conservator for value in a transaction, other than

 

those requiring a transaction that requires a court order as

 

provided in section 5407 or 5423(3), is protected as if the

 

conservator properly exercised the power. The Except as provided in

 

subsection (3), the fact that a person knowingly deals with a

 

conservator does not alone require the person to inquire into the

 

existence of a power or the propriety of its exercise, but a

 

restriction on a conservator's powers that is endorsed on letters

 

as provided in section 5427 is effective as to third persons. A

 

person is not bound to see to the proper application of estate

 

property paid or delivered to a conservator.

 

     (2) The protection expressed in this section extends to a

 

procedural irregularity or jurisdictional defect that occurs in a

 

proceeding leading to the issuance of letters and is not a

 

substitution for protection provided by a comparable provision of

 

the law relating to a commercial transaction or to simplifying a

 

transfer of securities by a fiduciary.

 

     (3) A conservator shall record an order allowing the sale,

 

disposal, mortgage, or pledge of or placement of a lien on real

 

property under section 5423 in the records of the register of deeds

 

for the county in which the real estate is located. Unless the

 

order has been recorded or a person to whom an interest in the real

 

estate is transferred has been given a copy of the order, the

 

person is not entitled to presume that the conservator has the

 

power to sell or otherwise dispose of the real property, or to

 

mortgage, pledge, or cause a lien to be placed on the protected

 

individual's home, as applicable.

 

     Sec. 5423. (1) Subject to a limitation imposed under section

 

5427, a conservator has all of the powers conferred in this section

 

and the additional powers conferred by law on trustees in this

 

state. In addition, a conservator of the estate of an unmarried

 

minor, as to whom no one has parental rights, has the powers,

 

responsibilities, and duties of a guardian described in section

 

5215 until the individual is no longer a minor or marries. The

 

parental rights conferred on a conservator by this section do not

 

preclude a guardian's appointment as provided in part 2.

 

     (2) Acting reasonably in an effort to accomplish the purpose

 

of the appointment and without court authorization or confirmation,

 

a conservator may do any of the following:

 

     (a) Collect, hold, or retain estate property, including land

 

in another state, until the conservator determines that disposition

 

of the property should be made. Property may be retained even

 

though it includes property in which the conservator is personally

 

interested.

 

     (b) Receive an addition to the estate.

 

     (c) Continue or participate in the operation of a business or

 

other enterprise.

 

     (d) Acquire an undivided interest in estate property in which

 

the conservator, in a fiduciary capacity, holds an undivided

 

interest.

 

     (e) Invest or reinvest estate property. If the conservator

 

exercises the power conferred by this subdivision, the conservator

 

must invest or reinvest the property in accordance with the

 

Michigan prudent investor rule.

 

     (f) Deposit estate money in a state or federally insured

 

financial institution including one operated by the conservator.

 

     (g) Except as provided in subsection (3), acquire or dispose

 

of estate property, including land in another state, for cash or on

 

credit, at public or private sale, or manage, develop, improve,

 

exchange, partition, change the character of, or abandon estate

 

property.

 

     (h) Make an ordinary or extraordinary repair or alteration in

 

a building or other structure, demolish an improvement, or raze an

 

existing or erect a new party wall or building.

 

     (i) Subdivide, develop, or dedicate land to public use; make

 

or obtain the vacation of a plat or adjust a boundary; adjust a

 

difference in valuation on exchange or partition by giving or

 

receiving consideration; or dedicate an easement to public use

 

without consideration.

 

     (j) Enter for any purpose into a lease as lessor or lessee

 

with or without option to purchase or renew for a term within or

 

extending beyond the term of the conservatorship.

 

     (k) Enter into a lease or arrangement for exploration and

 

removal of a mineral or other natural resource or enter into a

 

pooling or unitization agreement.

 

     (l) Grant an option involving disposition of estate property or

 

take an option for the acquisition of property.

 

     (m) Vote a security, in person or by general or limited proxy.

 

     (n) Pay a call, assessment, or other amount chargeable or

 

accruing against or on account of a security.

 

     (o) Sell or exercise stock subscription or conversion rights.

 

     (p) Consent, directly or through a committee or other agent,

 

to the reorganization, consolidation, merger, dissolution, or

 

liquidation of a corporation or other business enterprise.

 

     (q) Hold a security in the name of a nominee or in other form

 

without disclosure of the conservatorship so that title to the

 

security may pass by delivery. However, the conservator is liable

 

for an act of the nominee in connection with the stock so held.

 

     (r) Insure the estate property against damage or loss or the

 

conservator against liability with respect to third persons.

 

     (s) Borrow money to be repaid from estate property or

 

otherwise.

 

     (t) Advance money for the protection of the estate or the

 

protected individual, and for all expense, loss, or liability

 

sustained in the estate's administration or because of the holding

 

or ownership of estate property. The conservator has a lien on the

 

estate as against the protected individual for such an advance.

 

     (u) Pay or contest a claim; settle a claim by or against the

 

estate or the protected individual by compromise, arbitration, or

 

otherwise; and release, in whole or in part, a claim belonging to

 

the estate to the extent that the claim is uncollectible.

 

     (v) Pay a tax, assessment, conservator's compensation, or

 

other expense incurred in the estate's collection, care,

 

administration, and protection.

 

     (w) Allocate an item of income or expense to either estate

 

income or principal, as provided by law, including creation of a

 

reserve out of income for depreciation, obsolescence, or

 

amortization, or for depletion in a mineral or timber property.

 

     (x) Pay money distributable to a protected individual or the

 

protected individual's dependent by paying the money to the

 

distributee or by paying the money for the use of the distributee

 

to the distributee's guardian, or if none, to a relative or other

 

person having custody of the distributee.

 

     (y) Employ a person, including an auditor, investment advisor,

 

or agent, even though the person is associated with the

 

conservator, to advise or assist in the performance of an

 

administrative duty; act upon the person's recommendation without

 

independent investigation; and, instead of acting personally,

 

employ an agent to perform an act of administration, whether or not

 

discretionary.

 

     (z) Employ an attorney to perform necessary legal services or

 

to advise or assist the conservator in the performance of the

 

conservator's administrative duties, even if the attorney is

 

associated with the conservator, and act without independent

 

investigation upon the attorney's recommendation. An attorney

 

employed under this subdivision shall receive reasonable

 

compensation for his or her employment.

 

     (aa) Prosecute or defend an action, claim, or proceeding in

 

any jurisdiction for the protection of estate property and of the

 

conservator in the performance of a fiduciary duty.

 

     (bb) Execute and deliver an instrument that will accomplish or

 

facilitate the exercise of a power vested in the conservator.

 

     (cc) Respond to an environmental concern or hazard affecting

 

property as provided in section 5424.

 

     (3) A conservator shall not sell or otherwise dispose of the

 

protected individual's real property or interest in real property

 

or mortgage, pledge, or cause a lien to be placed on the protected

 

individual's home without approval of the court. The court shall

 

only approve the sale, or other disposal, mortgage, or pledge of or

 

lien against the real property or interest in real property if,

 

after a hearing with notice to interested persons as specified in

 

the Michigan court rules, the court considers evidence of the value

 

of the real property or interest in real property and otherwise

 

determines that the sale, or other disposal, mortgage, pledge, or

 

lien is in the protected individual's best interest.

 

     Enacting section 1. This amendatory act does not take effect

 

unless all of the following bills of the 95th Legislature are

 

enacted into law:

 

     (a) House Bill No. 4619.

 

     (b) Senate Bill No.____ or House Bill No. 5192(request no.

 

02731'09).