Information Gathering and Commencement of Proceedings

I. Purpose of Estate Administration

A. What Is Probate? What Is an “Estate”?

Although the above question is a seemingly simple one to lawyers, many non-lawyers have no concept of what probate is, other than it is “bad.” So what is probate? Simply put, probate is the process of transferring a decedent’s assets to the proper beneficiaries following the decedent’s death. Which assets are subject to probate? Those owned by a decedent in their own name (i.e., not jointly owned with rights of survivorship and not in a trust) and which do not have named beneficiaries.

In addition, note that the definition of “estate” in EPIC, at MCL 700.1104(b) includes the property of a trust (because EPIC also deals with trusts) and certain assets not under the control of a personal representative for payment of certain allowances, expenses, or taxes if the probate assets are insufficient to do so.

The balance of this section addresses in brief the concepts and tasks which are addressed in much more detail below or in subsequent presentations during the Fundamentals of Estate Administration seminar.^[1]

B. Information Gathering

In order to carry out the purpose of a probate proceeding, one must first work with the client (discussed in more detail below) to identify the assets and liabilities of the decedent. Sometimes, such as in certain cases where a spouse survives the decedent or a child has been intimately involved in the management of a parent’s assets prior to death, this is a relatively simple exercise. However, in many situations, the personal representative will need to undertake significant efforts to identify the property owned, and debts owed, by the decedent. This might involve reviewing the decedent’s physical paperwork and files, accessing their computer, contacting friends or relatives, and searching online records.

In addition, the personal representative will need to gather information about the family of the decedent. Again, sometimes this is very straightforward, but in other cases, can require using different resources to identify, locate, or determine specific information about beneficiaries or others entitled to notice of the proceedings.

C. Notices

The personal representative will be required to provide notices to creditors (known and unknown), and to beneficiaries and heirs. In certain circumstances, notice of proceedings may need to be published (e.g., if heirs cannot be located).

D. Distributions to Beneficiaries

Once probate has been commenced, the beneficiaries are identified, and all debts, taxes, and expenses have been paid, the personal representative may distribute assets to beneficiaries. In certain cases, partial distributions might be made before the personal representative is ready to make the final distributions, but circumstances such as potential creditors, valuation of unusual assets, or potential disputes about the estate, will play a role in determining when interim distributions are and are not appropriate.

II. Who Is the Client?

A. Identifying Whom You Represent

This is the most important initial question any attorney should ask before accepting any representation. For reasons completely unrelated to the substantive probate work you are performing, this is the first question an attorney is likely to be asked by firm general counsel or opposing counsel in the event that there are disputes, whether those disputes are between the fiduciary and beneficiaries, between beneficiaries, or between a fiduciary or beneficiaries and the attorney. As the attorney involved, you should be able to identify whom you represent—and just as importantly, whom you do not represent. And, just as importantly, you must take efforts to ensure that any non-clients are aware you do not represent them. Your written engagement letter (discussed below), and subsequent notices to beneficiaries (described in a different section of this seminar) are perfect opportunities to clarify your role vis-à-vis the various parties involved. When a disgruntled beneficiary whom you did not represent later feels slighted and claims that you did not properly represent their interest, you will be happy to have these letters in your file.

B. Representing the Fiduciary

If you will be representing the prospective personal representative, be sure that your client is either named as the personal representative in the will or otherwise has priority to act in that role (i.e., if the named personal representative is unable to serve or if there is no will). See MCL 700.3203. If there is no will or individual named in a will who is capable of acting, priority starts with the spouse of the decedent (if a devisee), then passes to other devisees, other heirs, the nominee of a creditor (if no personal representative has been appointed within 42 days of the decedent’s death), and finally the state or county public administrator if certain circumstances exist.

In addition, if there will be co-personal representatives, be sure to determine which (including all) of the personal representatives you will represent. It is often more efficient from an administrative (i.e., time and cost) standpoint for one attorney to represent the co-personal representatives. However, this also presents potential issues in the event of disagreement between the fiduciaries. Therefore, the potential conflicts, and consequences that could arise, should be discussed and agreed to in writing prior to commencing representation.

A common source of confusion for beneficiaries is that the attorney for the personal representative represents the personal representative—not the estate itself or the beneficiaries of the estate. As noted above, attorneys should always risk stating the obvious and explicitly state that fact when providing notices to the beneficiaries on behalf of the personal representative after commencing the probate proceeding.

Finally, in many cases, the fiduciary whom the attorney represents is also a beneficiary. This can be difficult, particularly if the individual has differences in opinion, in his or her capacity as a beneficiary, from what the individual, in his or her fiduciary capacity, should have. However, most individuals do not recognize this legal distinction. Accordingly, it is vitally important to discuss the potentially conflicting roles with the client at the outset of the representation. In some cases, the individual will need to engage a different attorney to represent him or her in an individual capacity. In others, the individual simply will not be able to serve as a fiduciary given the potential conflicts.

Although there are situations in which a beneficiary who is not a fiduciary might seek representation regarding the administration of an estate, because this seminar focuses on the administrative aspects of managing a probate estate, such discussions are beyond the scope of this seminar.

III. Preparing for and Participating in the First Meeting

A. Meeting the Family

Assuming a family member or close friend of the decedent is the personal representative, and especially if the attorney does not know or has had limited interaction with that person, keep in mind how the client feels approaching the first meeting. The person is likely very sad, and sometimes completely distraught, over the death of their loved one. He or she may have never set foot inside an attorney’s office before. The process can be scary and overwhelming, even for people familiar with attorneys.

It is helpful for the attorney to make his or her office as welcoming and comfortable as possible. Likewise, the attorney must LISTEN. This can be difficult at times but can go a long way toward developing a level of trust between the attorney and the client. Being too matter of fact or “down to business” can, in some cases, drive away a client who does not feel respected or taken seriously. Even if the client does not walk away, he or she might not have the same comfort level that would result in a future referral for services.

B. Items to Bring to the First Meeting

Death Certificates. Although meetings sometimes do occur before death certificates are available, in most cases the client should have these prior to the meeting. It is good practice to obtain at least three certified copies of the death certificate at the first meeting. The attorney will need the death certificates (or copies thereof) for several items, including:

1. Commencing probate; the probate court will require a copy of the death certificate at the time of filing. MCR 5.302(A). If a death certificate is not yet available, often the probate court will accept alternative documentation such as an obituary or funeral notice. Although not a bright line determination, the residence listed on the death certificate is often the proper domicile and will be important for determining where to file probate proceedings.
2. Completing claim forms for life insurance or retirement plans.
3. Filing an estate tax return.
4. Collecting probate assets including bank and brokerage accounts as well as titled vehicles/watercraft.
5. Transferring/selling real property.

Typically, the client will be able to obtain several copies of the death certificate from the funeral home, but additional copies can be obtained from the vital records office in the county where the decedent died.

Estate Planning Documents. The attorney should always ask the client to send any estate planning documents of the decedent in advance of the meeting. In many cases, the attorney was the drafting attorney, and already has copies of all of the documents. However, even in those cases, it is not unheard of for a client to have gone to a different attorney for a discreet amendment, a complete overhaul, or for other purposes, and there may be documents of which the drafting attorney is unaware. In any situation, opening an estate is significantly easier if the original will is available.

Other Legal and Financial Documents. Depending on the circumstances, there are many other legal documents the attorney should request the client bring to the first meeting:

1. Business documents, such as operating agreements, buy/sell agreements, contracts, and the like related to the decedent’s businesses.
2. Prenuptial agreements, divorce judgments/settlements, and child support orders, or similar documents should be obtained.
3. Real estate related documents, such as deeds, mortgages, land contracts, and easements.
4. Life insurance, annuity, or other financial contracts, along with information about beneficiary designations.
5. Bank statements, brokerage account statements, stock certificates.
6. Balance sheets and income tax returns if available.
7. Miscellaneous documents such as contracts, promissory notes (either as the lender or the debtor), titles to cars, boats, and other vehicles.

These documents may contain requirements or obligations triggered by the death of the decedent (or which are ongoing despite the decedent’s death) that are not addressed in the estate planning documents. These will be necessary in the event a business needs to be appraised for purposes of an estate tax return or sale.

See Form 1.1 for a list of information to request in advance of the initial meeting.

Information About Relatives/Beneficiaries. The attorney will eventually need to identify the actual heirs of the estate. Therefore, it is vital to know the identity of the decedent’s spouse, children, and sometimes their grandchildren. This includes the identity of predeceased individuals. In the event the decedent has no spouse or descendants, the identity of their parents, siblings, nieces and nephews, etc. will become important.

Although a decedent’s heirs may (or may not) be beneficiaries of the will, they are entitled to notice of a probate proceeding. Therefore, for all heirs, it will be necessary to know their relationship to the decedent, as well as their address and phone number. For beneficiaries of the estate, in addition to the foregoing, the attorney will need dates of birth and social security numbers (often required when completing claim forms, and always necessary for tax return preparation, if needed).

See Form 1.2, Probate Intake Sheet.

Other Individuals. Frequently, other advisors of the decedent will attend the first meeting. These people may have some of the documentation required (e.g., investment advisors, CPAs), and may have known the decedent better than the attorney in some cases. These advisors might have valuable insights on assets that family members do not have.

Sometimes, the fiduciary wants the beneficiaries to also attend this meeting. In many cases, doing so is fine—as long as the caveats about representation discussed above are clear. In addition, however, by having a non-client attend a meeting with the client and the attorney, no attorney-client privilege will attach to those discussions. In fact, some would argue that the attorney-client privilege is waived in its entirety as a result of the presence of those individuals if confidential client information is being discussed. Therefore, be sure to advise the fiduciary of that fact before the meeting.

Agendas/Checklists. In order to help focus the client, to keep on track during the meeting, and to avoid forgetting any specific items, it is a good idea to have an agenda of items to address, as well as a checklist. A good approach is to have a generic checklist of the items that frequently are addressed during the administration. Once you have had a chance to discuss the specifics of the engagement with the personal representative, you can customize the checklist to the particular matter. A good practice with the customized checklist is to clearly identify specific tasks and who will attend to each. This assignment of tasks should be addressed during the meeting, but a written follow up with that information will be invaluable to both the client and the attorney as the administration progresses.

A sample generic checklist is attached as Form 1.3. A sample customized checklist (addressing more specific items) is attached as Form 1.4.

Discuss the Process. The attorney should always explain to the personal representative the probate process, beginning with the initial meeting, how the pleadings are prepared, the filing process, when other pleadings must be filed, and how long the process could take. This discussion should include information about deadlines (such as when notices are required, when the probate inventory must be filed, the expiration of the creditor’s claims period, due dates for accountings and tax returns, and when and how the estate can be closed).

Fees. As disclosed in the written engagement letter (see below), the attorney should always discuss his or her fee arrangement with the personal representative. Typically, hourly fee arrangements are used for estate administration given the uncertainty that often arises regarding the various tasks that might need to be accomplished. However, if a fixed fee will be used, be sure to explain the parameters of the fixed fee, including what is—and what is not—included. In all cases, fees must be reasonable based on the factors set forth in MRPC 1.5(a)^[2] and must be substantiated. MCR 5.313.

It is also important to discuss whether the personal representative will charge a fee. Often, if a close family member is nominated to serve, they will not charge a fee. However, regardless of the identity of the personal representative, they are entitled to “reasonable compensation.” MCL 700.3719(1). To prove reasonableness, the personal representative should maintain detailed time records with written entries of the activities involved. A sample fiduciary tracking sheet is attached as Form 1.5.

Docketing. Following the initial meeting, all tasks and deadlines should be maintained in a docketing system. Just as a written checklist of all tasks is important for the client/personal representative, the attorney should maintain a checklist (and it may be the same one given to the personal representative) that ties in with the docketing system.

A sample docketing checklist (in our office, maintained in addition to the checklist provided to the client), is attached as Form 1.6.

IV. Written Fee Agreements

A. Fee Agreement Requirements

As noted above, MCR 5.313 includes several requirements regarding engagement letters. For example:

1. A written fee agreement or engagement letter is required at the beginning of the representation and must be provided to the personal representative.
2. The attorney fees must be reasonable, and ultimately the probate court may review such fees. In so doing, the court may consider the factors of MRPC 1.5(a). These include:
3. In addition, within the later of 14 days of being appointed by the court or 14 days of engaging counsel, the attorney must serve a copy of the engagement letter and a Notice Regarding Attorney Fees (available as SCAO form PC 576) on those Interested Parties affected by payment of legal fees.
4. Detailed time records must be maintained, including dates, descriptions of the work performed, and the identity of the person providing the services.
5. Fees may be paid without prior court approval as long as the engagement letter has been signed, provided to all interested persons affected by payment of legal fees along with the Notice Regarding Attorney Fees, the time records and statements are sent to the personal representative and any interested party who requests that information, and no objections are made.

A sample engagement letter is attached as Form 1.7.

V. Finding the Will

A. Where to Look

If the attorney drafted the will and had regular contact with the decedent, locating the will might not be a difficult task. Frequently, however, it may have been many years since the attorney last had contact with the decedent. In other cases, the personal representative seeks representation from an attorney who never worked with the decedent. In those cases, it is important to have the family/nominated personal representative search the decedent’s records for documents that may have been executed in the meantime. This is more likely to be the case if the decedent had a significant life event after the time the most recent known will was executed. If the will is not located in the decedent’s records, other places to look include the following:

1. Safe Deposit Box: This is a common place to find a decedent’s documents, although perhaps less so now than in the past. Even if the personal representative is not aware of a safe deposit box, it is wise to check with any banking institutions the decedent was known to have used. If the decedent is the only owner of the safe deposit box, it may be necessary to petition to the probate court to open the box. Any interested person may do so using the Petition and Order to Open Safe Deposit Box to Locate Will or Burial Deed (SCAO Form PC 551). This petition is filed in the county where the safe deposit box is located.
2. Relatives: Sometimes trusted relatives may be in possession of the decedent’s items, particularly if that person is named as a fiduciary.
3. Other attorney offices: If it is known that another attorney prepared the decedent’s will, contact that attorney. Of course, that person may have already submitted the will to the probate court if they know of the decedent’s death.
4. Probate Court: A common practice in years past was to deposit the will with the probate court for safekeeping. Although this practice is no longer common (in the author’s experience), if no will can be located, contact the probate court to be sure.

B. What if the Will Cannot Be Found?

On occasion, the original will simply cannot be located, but one is known to have existed at one time, usually because a photocopy is available. In this event, a formal testacy proceeding (described in another session of the seminar) can be used to prove the contents and execution of the will. MCL 700.2507. If the original will was held by the decedent but cannot be located, the court may apply a rebuttable presumption that the testator destroyed the will with the intent to revoke it. See In re Taylor’s Estate, 323 Mich 101, 34 NW2d 474 (1948); in re Estate of Christoff, 193 Mich App 468, 484 NW2d 743 (1992) See also Reporter’s Comment and Annotation to MCL 700.2507, .3402.

VI. Determination of Heirs and Interested Persons

In any estate proceeding it is necessary to identify the heirs and devisees under the will, if any, for the probate pleadings. In informal proceedings, the Testimony to Identify Heirs (SCAO Form PC 565) is a sworn affidavit by the witness signing the document. If the personal representative desires an order from the probate court determining the heirs and devisees, a formal probate proceeding is required.

A. Who Is Included?

The sworn testimony document must identify all devisees named in the will, if any. The Testimony to Identify Heirs must include those heirs of the decedent who would inherit the decedent’s probate assets under intestate succession. See MCL 700.2101–.2114. A Supplemental Testimony to Identify Nonheir Devisees (SCAO Form PC 566) is required for non-heir devises (e.g. where other individuals or the decedent’s formerly revocable trust are named as devisees). If there are no identifiable known heirs of the decedent, the Attorney General of the State of Michigan is also an interested person. Id. at 3705(3).

In addition, always consult MCR 5.125 when determining the scope of interested persons in a particular matter. This court rule includes detailed lists of those who qualify as interested persons in a variety of specific situations.

VII. Identification of Estate Assets

A. What Is This Information Used For?

Obviously, it is important to identify all assets in which the decedent had an interest in order to properly distribute them to the appropriate owner. But there are several other reasons why it is necessary to do so. For example:

1. Completing the Probate Inventory: This document is due with the probate court within 91 days of the personal representative’s appointment. MCL 700.3706. It is not uncommon to have incomplete information at this time. For example, if the decedent owned a business that requires professional valuation, that process will almost certainly pass the deadline. In other cases, the personal representative does not find information about a particular asset until later in the administration. In those cases, be sure to file the Inventory in a timely manner, then file an Amended Inventory once all of the information is obtained. Id. at 3708.
2. Preparing accountings: The personal representative is required to keep beneficiaries informed, and to prepare annual accountings of the estate’s financial activity. MCL 700.3703.
3. Tax returns: Unless an estate has an insignificant amount of income ($600 threshold), the estate will be responsible for filing at least one year’s worth of state and federal fiduciary income tax returns. And, if the decedent’s gross estate (plus lifetime gifts) exceeded his or her available applicable exclusion amount (base exclusion amount of $12,060,000, in 2022, plus any DSUE amount received from a predeceased spouse), the personal representative must file a federal estate tax return.

B. Information to Look For

Determining the exact ownership of each asset is vital, as only those assets subject to probate pass through the estate. Although the client may need assistance with the management and ultimate disposition of non-probate assets, such as those in a trust, held as joint tenants with rights of survivorship, or with a valid beneficiary designation, those assets will not be included on the probate inventory, and the personal representative has no control over such assets (unless the estate is the new owner).

Release for Information. A good idea is to have the personal representative authorize in writing the release of any information or material to the attorney, or others in the office working with the attorney. Although not every custodian will accept this (for example, a company may require a separate authorization for every conversation with the attorney, not a blanket authorization), in many cases this document can simplify the asset identification and collection process by putting this in the hands of the attorney or other person in the attorney’s office, rather than the personal representative.

See the sample release attached as Form 1.8.

What to Look For. In order to properly determine ownership, it is necessary to find proof of title for each asset. For example:

1. Real Estate: Deeds should be located for any real estate in which the decedent held an interest. Clients will often swear that real property is owned one way, but the legal ownership is different. Depending on the nature of the property, its use over the years, and the personal representative’s level of familiarity of the decedent’s management of the property during life, a title search may be wise to obtain to be sure there are no outstanding liens, easements, or transfers of which the personal representative and attorney would not otherwise be aware.
2. Bank Accounts: Always obtain banks statements for the period including the decedent’s death.
3. Stocks/Bonds/Etc.: If held in certificate form, the original certificates should be located and the transfer agent contacted to determine the process of transfer. If the original stock certificate cannot be located, the transfer agent should have a process to issue a new certificate. If not held in certificate form, then the personal representative should obtain statements for the period including the decedent’s death from the institution which custodies the assets.
4. Life Insurance: Obtain a Form 712 from the insurance company to substantiate the value of the policy. Note that with certain universal life policies issued in the past, the Form 712 value may be much higher than anticipated based on reserve requirements imposed on the insurance companies and the lack of updated federal regulation to address these types of policies. One tip may be to ask the insurance company for a letter describing the value of the policy prior to asking for the Form 712. Different companies provide differing levels of assistance in this regard.
5. Business interests: Depending on the intended disposition of the business and its potential value, it may be necessary to engage an independent valuation firm to determine the appropriate value of the interest held by the decedent. This will always be required on a federal estate tax return (and may be beneficial if minority interest or lack of marketability discounts are available). In other cases, valuation of the business assets themselves may be sufficient (e.g., an LLC that owns several parcels of real estate but which do not produce income flow). The decedent’s accountant might also be helpful in this situation.
6. Retirement Assets: Statements from the company, substitute Form 712, or a letter from the plan administrator should be obtained.
7. Debts: Just as important as documenting the value of assets is documenting the value of the decedent’s debts, such as on mortgages, land contracts, or promissory notes. Amortization schedules will also be needed to determine the current value of the debt.
8. Obtaining a copy of the decedent’s last income tax return may also provide helpful information in determining both assets and debts.

C. Hard to Find Assets

There are several types of assets that are commonly hard to find or might be unknown to everyone except the decedent. Examples include:

1. Stocks in certificate form.
2. Electronic brokerage accounts (e.g., E*Trade).
3. Savings bonds.
4. Intra-family related documents (e.g., loans, business interests that are not well documented).
5. Social media accounts.
6. Stock shares issued by demutualized insurance companies.

Be sure to discuss all of these types of assets with the personal representative, even if there is no initial suggestion that any such assets exist.

D. Out-of-State Assets/Out-of-State Decedents

Michigan residents often own real property located in other states (e.g., winter homes in Florida or Arizona). If such real property is owned in a decedent’s name such that it is subject to probate, unless the attorney is also licensed to practice in the state in which that real property is located, it will be necessary to engage local counsel to determine whether an ancillary proceeding in that jurisdiction is necessary, and to assist as appropriate.

In addition, sometimes non-Michigan residents own real estate located in Michigan. If no Michigan estate proceeding has been commenced, and if a personal representative has been appointed in the jurisdiction of the decedent’s death, the foreign personal representative may file authenticated copies of the letters of authority (or whatever the corresponding document is called in the other state) to be granted the authority to act with regard to the Michigan real estate. MCL 700.4203. This is not an official appointment in Michigan, and no probate inventory or other notices are required as would be the case if the decedent were a Michigan resident. In addition, a Notice of Ancillary Administration (SCAO Form PC 619) should accompany the authenticated letters of authority.