In Michigan, the person who is appointed by the probate court to manage the estate of a decedent during the estate administration process is known as a personal representative. If the decedent left a will, typically it would name the person who they want to serve as the personal representative. Otherwise, eligible persons can petition the court to be appointed. For their work, Michigan law allows for the personal representative to be paid a reasonable fee. Mich. Comp. Laws § 700.3703(1)
General Duties and Responsibilities of a Michigan Personal Representative
In Michigan, the goal of the administration process is to wrap up the decedent’s outstanding business. Mich. Comp. Laws § 700.3719(1). This means paying their bills and distributing their assets.
Identify estate assets. In order to pay bills and distribute assets, part of a Michigan personal representative’s job is to first identify the assets that are part of the decedent’s probate estate and take control of it. Mich. Comp. Laws § 700.3709. This typically includes property that is owned solely by the decedent such as personal property, real estate, vehicles, and bank accounts. Probate property does not include property owned with another person where there are survivorship rights, property that has designated beneficiaries, or property held in trust.
The personal representative must secure the property, have it appraised, and create an inventory. Mich. Comp. Laws § 700.3706. The inventory will allow the personal representative, the court, and interested parties to understand the value of the estate and what is available to pay debts, expenses, and to distribute to beneficiaries and heirs.
Pay debt and expenses. The personal representative must also pay estate debt and expenses. This includes bills that the decedent left unpaid, expenses related to the upkeep of estate property, and expenses of administration. Expenses of administration includes fees paid to the personal representative.
Distribute estate assets. The personal representative is responsible for distributing estate assets based on the terms of the will or on Michigan’s law of intestate succession. Note that assets cannot be distributed until all debts and expenses are paid or money is put aside to pay them. In other words, payment of the personal representative’s fees as well as other expenses takes priority over asset distribution.
Compensation for the Personal Representative
The compensation for the personal representative is determined based on the decedent’s will, a contract between the decedent and the personal representative, or Michigan statute. If there are provisions in the will, then what the will says controls. Similarly, if the decedent and the personal representative made a contract about how much the personal representative would be compensated, then that would control.
According to the Michigan’s Estate and Protected Individuals Code, a personal representative is entitled to reasonable compensation for services performed in settling the decedent’s estate. Mich. Comp. Laws § 700.3719. Unlike some other states, Michigan’s statute does provide a specific formula for determining the fee of the personal representative. Also of note is that the law allows the personal representative to pay themselves periodically without prior court approval. Note that even if the court does not approve in advance each payment, ultimately the personal representative will have to submit an accounting for all payments made from the estate, including their fee.
Renouncing a Fee
While a personal representative has a right to receive a fee, they do not have to accept a fee. For example, the personal representative might not be satisfied with the amount of fee specified in the will. They can renounce it, believing they would get a higher fee based on the statute. Some personal representatives choose to renounce any fee—will based or statute based. One reason is that they are concerned about the tax consequences of receiving payment for their personal representative services. Others feel uncomfortable about taking a fee for working on the estate of a deceased loved one. Regardless of the reason, if the personal representative chooses to decline a fee, they must do so in writing and file it with the probate court. Mich. Comp. Laws § 700.3719(4)