Intentions for the family home to be given equally to adult children are common in estate planning. Typically, this ultimately means the home must be sold, so that assets can be divided. Along the way, disagreements, delays and even the need for legal intervention are not out of the question, as this Michigan Court of Appeals case reveals.
Delays Lead To Conflicts…
Given that a family home is often the most valuable asset parents can leave to children, homes often become a source of stress and strain upon the death of the elders. Much of that falls on the fiduciary, typically one of the adult children, appointed to carry out the estate plan. Note that this person may be referred to as the personal representative, executor or administrator, depending on the circumstances and region. Regardless of the nomenclature, the representative, in accordance with state probate protocols, must maintain the security and upkeep of the home, get it appraised, and, ultimately, sell it successfully. The path through selling off the family home after a death can be fraught with opportunities for conflicts and misunderstandings among siblings. Ideally, these are resolved before costly and time consuming legal remedies become necessary.
Sadly, as Estate of Harris, decided by the Court of Appeals in Michigan, underscores, some family conflicts do end up needing to be resolved in courtrooms, creating delays and disruptions in the distribution of assets in accordance with the intentions of the deceased:
The decedent’s three children were embroiled in litigation over who should control their deceased father’s estate and whether daughter Denise should have to pay rent for living in the decedent’s house for two years after his death. Denise was appointed as personal representative of the estate and then proceeded to not expeditiously administer the estate as required by Michigan law. The probate court removed Denise as personal representative, appointed a non-family member successor, and ordered Denise to pay rent for the time she lived in the home after her father’s death.
Further delays ensued, since Denise then appealed, using a joint tenancy argument, which the Court of Appeals rejected, holding that:
Their father’s will left them everything equally including the house. Nor was the property deeded from the estate to Denise and her brothers, so they were not title owners of the property … .The estate property could have been rented out by Denise to a third-party or sold during the time that Denise lived in the residence. The Court of Appeals affirmed that Denise being ordered to pay rent was an appropriate remedy for her breaches of fiduciary duty as personal representative under MCL 700.3712. Section 3712 provides as follows: “If the exercise or failure to exercise a power concerning the estate is improper, the personal representative is liable to interested persons for damage or loss resulting from breach of fiduciary duty to the same extent as a trustee of an express trust.”
Personal Representative Bonds Explained
Fiduciaries, such as personal representatives, have significant, legally binding responsibilities. Given the gravitas of the role, a type of bond, sometimes referred to as a personal representative bond is often required by courts. Essentially, a personal representative bond serves as a guarantee that duties will be carried out in accordance with the law, and in the best interests of beneficiaries. Colonial Surety makes it easy and speedy for personal representatives and other fiduciaries to obtain their bonds: simply get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere.
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