Disclaimer: This article provides general information about administering an estate in Michigan and is not legal advice. Consult a qualified attorney for guidance specific to your situation.
Detailed Answer
During Michigan’s probate process, the personal representative (formerly known as executor) has a duty to manage estate expenses and pay ongoing bills in an orderly fashion. Michigan law grants authority and sets priorities to ensure debts, taxes, and necessary costs get paid from the estate’s assets.
1. Appointment and Authority
Once probate opens and the court issues Letters of Authority, the personal representative can:
- Collect and secure estate assets.
- Open a dedicated estate bank account.
- Use estate funds to pay expenses and bills.
Statutory reference: MCL 700.3705 grants these powers. MCL 700.3705
2. Priority of Payments
Michigan probate law sets a clear order for distributing estate funds:
- Funeral and burial expenses.
- Administration costs (bond, court fees, attorney fees).
- Taxes (estate, income, property).
- Claims of secured and unsecured creditors.
- Ongoing utility and maintenance bills to preserve assets.
Court-approved payment of these expenses helps avoid personal liability for the representative. See MCL 700.3711.
3. Inventory and Accounting
The personal representative must file an inventory of assets and periodic accountings, itemizing all receipts and disbursements. This process:
- Ensures transparency for heirs and creditors.
- Documents payment of ongoing bills (mortgage, utilities, insurance).
- Helps the court review and approve final distributions.
4. Managing Ongoing Bills
Keep the estate solvent and avoid asset deterioration by:
- Continuing utility payments on occupied or vacant properties.
- Paying property taxes, homeowners or hazard insurance.
- Maintaining mortgage payments or arranging short sales if needed.
Michigan law recognizes these as reasonable expenses under MCL 700.3740.
5. Resolving Claims
Creditors must present valid claims within six months of the date of appointment (or claim deadline). The representative reviews, allows or disputes claims, then pays allowed claims in statutory order.
Failure to address claims promptly may lead to surcharge or removal of the personal representative under MCL 700.3708.
Helpful Hints
- Open a separate estate bank account to track payments cleanly.
- Keep receipts and invoices for every expense.
- Prioritize bills that protect estate value (property taxes, insurance).
- File an accurate inventory within 91 days of appointment (MCL 700.3713).
- Consult probate court clerks or a probate attorney when in doubt.