THE PROBATE PROCESS FROM START TO FINISH

ADMINISTERING THE ESTATE EFFECTIVELY

HOWARD H. COLLENS, ESQ

JUNE 3, 2014

I. How to Respond to Creditors’ Claims

II. Insolvency

III. Managing the Estate Cash Responsibly

IV. Disclaimers

V. Partial Distributions

How to Respond to Creditors’ Claims

What is a “Claim”?

•Liability of the Decedent

•Funeral, burial and expenses of administration

•Does not include an estate or inheritance tax

Notice to Creditors

•Publish notice of death of decedent

•Requirement to present claim within 4 months

•Form PC 574 Notice to Creditors Decedent Estate

Notice to Known Creditors:

• What is a “known” creditor?

• Liability for failure to provide notice

• Form PC 578 –Notice to Known Creditors

Has The Claim Been Timely Filed?

• Claim that arose prior to decedent’s death

• Secured creditors

• If creditor is not known

• Claimants use Form PC 579 – Statement and Proof of Claim

Disallowance or Allowance of Claim:

• Personal Representative may allow, disallow, partly allow, partly disallow or settle the claim

• Waiver/Consent Form PC 561

• Disallowance of Claim Form PC 580

• Civil action to seek payment

Questions???

Insolvency

Insolvency

•Determine amount due to creditors

•Priority of payment of claim

•Sufficient assets in the estate satisfy the claims?

•Schedule of Distributions and Payment of Claims, Form PC 596

Questions???

Managing the Estate Cash Responsibly

Managing the Estate Cash Responsibly

•Personal Representative will oversee the management and investment of estate property

•Michigan’s Prudent Investor Rule

•Examine language in Last Will and Testament

•Diversify Investments

•Keeping and disposing of assets

Managing Estate Cash Responsibly

•Liquidation of assets

•Invest in best interests of beneficiaries

•Delegating tasks to professionals

Questions???

Disclaimers

Disclaimers

•Disclaimers are an absolute and irrevocable refusal to accept an interest in property and may be:

• A specific asset• An interest in a specific asset• A pecuniary amount• A fractional or percentage share• A limited interest or estate

Disclaimers

Pursuant to MCL 700.2903 (1), disclaimers must meet following

requirements:• In writing• Declares disclaimer• Describes the disclaimed interest• Is signed by disclaimant and;• Is delivered in accordance to MCL 700.2904,

2905 or 2906

Questions???

Partial Distributions

Partial Distributions

…are distributions made by the Personal Representative before the entire estate administration is concluded.

Partial Distributions:

•May be made at any time during administration

•Determine whether partial distributions are in best interest of estate

•Distribute assets and settle claims

•Written distribution proposals to distributees

Making partial distribution to beneficiaries:

• Competent successors

• Convey Intent

• Send copies of proposed distribution check and Form PC 588 – Receipt of Distributive Share, Personal Property to the devisee

Questions???

Thank you!

Howard H. CollensGalloway and Collens, PLLC

26075 Woodward Ave, Suite 200Huntington Woods, Michigan 48070

248.545.2500GallowayCollens.com

Howard@GallowayCollens.comTwitter: @howardcollens