When is a conservatorship necessary?
When the minor owns money or property that requires management or protection that cannot otherwise by provided, or
When the minor has or may have business affairs that may be jeopardized or prevented by minority, or
When the minor needs money for support and education and that protection is necessary or desirable to obtain or provide money.
Who may file the petition?
Individual interested in the person's estate, affairs, or welfare.
Where do you file the petition?
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.
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.
What paperwork is required to file?
Who are the interested persons?
The individual to be protected if 14 years of age or older; and
The presumptive heirs of the individual to be protected; and
If known, a person named as attorney in fact under a durable power of attorney; and
The nominated conservator; and
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:
The Attorney General, if the protected person has no known presumptive heirs;
Foreign counsel, if required by law;
Administrator of Veteran's Affairs, through the administrator's Michigan district counsel if the individual's benefits are payable by the Veterans' Administration;
A guardian, conservator, or guardian ad litem of an interested person.
A special fiduciary; and
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 (PC668) must be served on the individual along with the petition, which lists the rights as follows:
a. An 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?
The Waiver/Consent (Form PC561) may be made by:
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?
Personal service - 7 days before the date set for hearing.
Mail - 14 days before the date set for hearing.
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)
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?
Set a hearing date.
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.
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.
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A. FIDUCIARY: Conservators are particular types of "fiduciaries". The word "fiduciary" is a derivative from the Latin word "fides" meaning faith, honesty or honor. A fiduciary is one appointed by the Court or by a legal document such as a will, trust or power of attorney, who has a duty to act primarily for the benefit of another. In a minor conservatorship, the minor may also be referred to as the "protected individual".
C. ESTATES OF MINORS: When a child receives a large sum of money, whether from a personal injury case or inheritance, the Court normally appoints a parent to be the conservator of the child's estate. This is not the family's money or the parent's money. It is the child's money. Parents, by law, have the obligation to support their child from their own funds, and parents may not reimburse themselves for money spent on supporting that child, or use the child's funds as a source for "loans". The money, plus accrued interest, must remain on deposit or invested in an appropriate licensed institution until the child reaches age of majority. The only possible exception to this rule is that a conservator may petition the Court to use the money for the benefit of the child when necessary and when no other source is available. Parents who violate fiduciary duties toward their child's estate may be subject to severe action by the Court.
D. VERIFICATION OF FUNDS ON DEPOSIT: If there are assets in the minor's estate, the conservator must deposit them in a suitable financial institution and file Verification of Funds on Deposit (Form PC669) within five days from the date on the Letters of Conservatorship. This form, signed by an agent of the financial institution, serves two purposes: It verifies that the minor's assets have actually been deposited and it reflects that actual notice of the restricted nature of the account has been given to the financial institution. A restricted account is used to protect the assets instead of requiring the conservator to purchase a bond, which would be an additional expense to the minor's estate. If, however, there are no assets when the conservatorship is established, the attorney for the conservator must complete the Agreement In Regard To Use Of Verification Of Deposit (Form KCPC04) to insure that the assets will be deposited and Verification of Funds on Deposit filed with the Court within five days after the assets are received.
E. Inventory: The Inventory (Form PC577) is a list of the assets in the conservatorship. A conservator of a minor's estate must file an Inventory within 56 days from the date on 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.
F. ACCOUNTS/VERIFICATIONS: In minor conservatorships the assets are normally placed in restricted accounts. This usually relieves the conservator of the burden of accounting to the Court until the minor turns 18. The Court does require a Verification of Funds on Deposit, along with a current account summary or monthly statement from the financial institution, to be filed each year. A reminder will be sent to the fiduciary along with the appropriate form to be completed and filed with the Court.
G. FINAL ACOUNTS: When the minor turns 18 the conservator must file a Minor Conservator - Final Account, Waiver, Consent and Order (Form PC648). The Final Account shows all receipts, disbursements, 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. The Waiver and Consent portion of the form is signed by the minor and indicates that the minor has seen the Final Account and consents to the allowance of the account without hearing. The order allows the Final Account and authorizes the financial institution to turn over the assets to the ward. Upon filing a Receipt of Ward and Discharge (Form PC649) signed by the ward, the conservator will normally be discharged.
H. 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.
I. FILING ON TIME: You have a strict obligation to file required documents on time. Failure to do so can result in your removal as a fiduciary.
J. COMMINGLING OF FUNDS: A fiduciary is absolutely forbidden from combining 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.
K. 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.
L. LOSS THROUGH SELF-DEALING: A fiduciary must not transact deals where the fiduciaries own self-interest is opposed to his or her duty to the estate.
M. WANTON AND WILLFUL MISHANDLING: A fiduciary may not purposely use the estate in a manner that is against the interest of the estate.
N. BORROWING: A fiduciary may not borrow or purposely use funds or properties from the estate for the fiduciaries own purpose.
O. 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.
P. 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.
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