Disclaimer
This article is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney for your specific situation.
Detailed Answer
When someone dies in Michigan, the personal representative (also known as the executor) must pay valid creditor claims before distributing assets. If the estate lacks sufficient liquid assets, the representative may need court approval to sell estate property. The Michigan Estates and Protected Individuals Code (EPIC) governs this process under sections MCL 700.3403 et seq. and MCL 700.3715.
Step 1: Provide Notice to Creditors
Within 10 months after appointment, publish or mail a notice to creditors as required by MCL 700.3403 (link). This notice informs potential claimants to file by a deadline.
Step 2: File and Approve Claims
Creditors must file claims within the statutory period. The personal representative reviews each claim and either allows or objects to it, following MCL 700.3405.
Step 3: Determine the Need to Sell Property
If liquid assets (cash, bank accounts) cannot satisfy approved claims, the representative must sell estate property. Real property sales require court authority; personal property may only be sold if the will or statute allows it.
Step 4: Petition the Probate Court for Authority to Sell
File a petition in the probate court with jurisdiction over the estate. Provide an inventory of property, a list of creditors, and justification for sale under MCL 700.3713 and MCL 700.3715 (link).
Step 5: Conduct the Sale
After court approval, advertise and sell the property in a commercially reasonable manner. Follow any court-ordered terms. Record deeds or bills of sale as required.
Step 6: Distribute Proceeds
Use sale proceeds to pay approved debts and administrative expenses. File a final accounting with the court and seek discharge once all obligations are met.
Helpful Hints
- Keep detailed records of notices, claims, and communications with creditors.
- Review your local probate court’s rules for filing and hearing procedures.
- Obtain professional appraisals to establish fair market value.
- Calendar all deadlines to avoid missing the creditor claim period.
- Consider consulting a probate attorney to guide you through petitions and hearings.