Detailed Answer: Authorization Forms for Distribution of Real Property Sale Proceeds in Michigan
When real estate from an estate sells, the personal representative must follow Michigan’s Estates and Protected Individuals Code (EPIC). Heirs who want direct proceeds must sign specific forms. These forms ensure the court and escrow agent distribute funds correctly and protect all parties.
1. Court Order Authorizing Sale
Before any distribution, the personal representative petitions the probate court for an order authorizing sale. Michigan law requires this under MCL 700.3701. Once the court issues an order (MCL 700.3701), sale proceeds legally vest in the estate.
2. Receipt and Release (Probate Form PC 554)
Heirs sign a Receipt and Release to acknowledge the amount they receive and waive future claims against the estate for that distribution. Use Michigan SCAO Form PC 554 (PC 554).
3. Authorization to Distribute Proceeds (Probate Form PC 529)
Probate Form PC 529 authorizes the personal representative or escrow agent to disburse net proceeds to named heirs. Each heir must sign this form to confirm payment details and banking instructions. Find the form at the Michigan Courts website (PC 529).
4. Small Estate Affidavit (if estate total ≤ $28,000)
If the entire estate’s personal property value does not exceed $28,000, heirs may use a Small Estate Affidavit under MCL 700.2103. This form allows direct collection of personal property proceeds without full probate. See MCL 700.2103.
5. Escrow Disbursement Authorization and Tax Forms
Escrow companies typically require a written disbursement instruction and a completed IRS Form W-9 from each payee. This ensures accurate reporting of proceeds to the IRS.
Statutes at a Glance
- MCL 700.3203: Order of Distribution
- MCL 700.3701: Petition to Sell Real Property
- MCL 700.2103: Small Estate Affidavit
Helpful Hints
- Review the court’s sale order for distribution instructions.
- Confirm whether the estate qualifies for a Small Estate Affidavit.
- Provide clear bank account details to avoid delays.
- Keep signed Receipt and Release forms in the estate file.
- Consider a probate attorney when multiple heirs or complex assets exist.