CONSERVATOR INSTRUCTION LETTER

Letters of Conservatorship

The Letters of Conservatorship serve both as proof of your authority to act as Conservator and sets forth limitations to your power.  Read the Letters of Conservatorship carefully, paying particular attention to any restrictions imposed by the Court.  If you have questions or concerns about any restrictions, please contact the office before taking any action.

You will note that the Letters of Conservatorship reflect two restrictions with regard to your authority: (1) “Real Estate not to be sold, purchased, mortgaged, pledged, or otherwise disposed of, or cause of lien to be placed on the property without prior Probate Court authority,” and (2) Assets are not to be removed from State of Michigan without prior Probate Court Authority.”  These restrictions are self-explanatory.  Accordingly, if the estate owns or possesses real estate, any transactions related to the property must be approved by the Probate Court approval, which means that we must first petition the Court for authority to sell or mortgage any property.  Additionally, you cannot move any money or assets out of Michigan.  The Court wants to maintain control of the assets and make sure that they are handled appropriately.

A Conservator has title to the property in a fiduciary capacity, but does not own it.  Rather, a Conservator manages it for the benefit of the legally protected individual.

Fiduciary Bank Account

All of the assets should be re-titled as set forth on the Letters of Conservatorship and the funds deposited in a properly established fiduciary bank account. Our office can assist in opening up the fiduciary bank account.

Please note that if your Letters of Conservatorship contain language requiring a “restricted account” you cannot use conservatorship funds without prior approval from the Court.  This approval usually requires filing a petition and having a hearing.  The hearings are usually set for approximately one month after the petition is filed so please plan accordingly.

Inventory and Assets

As Conservator, you are also required to prepare an “Inventory” of the assets of the estate within 56 days from the date of your appointment.  You must also send a copy of that Inventory to the interested parties. The Inventory is a “snapshot” of the assets of the protected person at the time of your appointment. The Inventory must list, in reasonable detail, all of the property owned by the protected person and must include its value as of the date of your appointment.

Monthly income is identified as pension income, earnings, social security income, and wage loss income from a first party auto carrier.  While not required to be listed on the Inventory, all monthly income must be deposited into the fiduciary bank account and be accounted for to the Court.

A pending lawsuit is also an asset to be referenced on an Inventory.  If the lawsuit is the only asset at the present time, we will file an Inventory making that reference.  If you are advised of the settlement of a lawsuit, you must immediately notify our office. There are specific rules that must be followed when a settlement on behalf of a protected person is reached.  The Probate Court will need to approve the settlement or set a bond before any funds can be used by you or before you can sign a release.  If you receive settlement funds, it is very important that you immediately contact us before distributing any of said funds.

If there are additional assets, it is your responsibility to provide this information to both our office and to the Court.  Michigan law requires that if an asset becomes known to you or received by you, it is necessary to bring the information to the Court within ten days.  If you receive additional assets or knowledge thereof please bring this to our attention immediately so we may advise you on how to proceed.

Our office will prepare and file the Inventory with the Court upon being provided the necessary information.  Please provide a detailed description of all estate assets and monthly income so that our office may timely prepare the Inventory.  Upon receipt of the asset information, we will also be able to provide you with instructions on how to preserve and protect each specific asset.

Accounting

A Conservator must file an account annually, although the Court can request an account at any time.  An account shows money and property received during the year and expenses and other disbursements.  An account also shows the value of the estate at the beginning of the period and a list of assets remaining at the end of the accounting period, together with the value of each asset.

It is imperative that you keep accurate records of all of your actions as Conservator.  All deposits and/or withdrawals from the fiduciary bank account should be logged and all receipts of expenditures retained.  You should retain a copy of the monthly bank statements.  There should be no commingling of assets (this means that the legally protected individual’s assets should never be deposited with anyone else’s assets and no one else’s expenses paid from their assets).

You should also maintain a detailed log of all activity performed as Conservator including the date, time and description of your activity if you wish to be reimbursed for your services.

Duties of Trust

As Conservator, you have a duty of undivided loyalty, impartiality, care, prudence and a duty to segregate the estate assets.  A Conservator owes a fiduciary duty to the individual of the highest trust. The Conservator must use care in handling property, be prudent in making investments, and use assets only for the benefit of the legally protected individual and his or her dependents. Please encourage independence and self-reliance of the individual, to the extent possible.  Additionally, while the following list is not exclusive, it includes some important instructions relative to your duties:

• Do not withdraw cash from the fiduciary account;
• Do not commingle Conservatorship assets with your own or anyone else’s property;
• Do not treat the legally protected individual’s property as your own in any way;
• Do not put any of the legally protected individual’s money in your own bank account;
• You must establish a bank account or accounts separate from your own. Do not set up a joint bank account;
• Unless you first obtain court permission, do not self-deal (for example, do not gift or loan yourself money or other property);;
• Do not personally sell anything to the legally protected individual or purchase anything from him or her;
• Do not take a loan from Conservatorship funds;
• Do not use Conservatorship funds to pay for your own personal bills and needs;
• Except for receiving court approved fees for your services, neither you nor any of your family should financially benefit from the Conservatorship;

Taxes

The Conservator has a duty to prepare and file the legally protected individual’s Federal, State and local tax returns.  Any tax liability must be timely paid by the Conservator from the estate assets.

Modification or Termination of the Conservatorship

Some individuals may need a Conservator for a relatively short time, perhaps as they recover from an illness or injury.  Other individuals may need a Conservator for the rest of their life.  If the legally protected individual regains the ability to handle his or her finances, please advise our office to petition the court for termination of the Conservatorship.

If you are unable or unwilling for any reason to continue to serve as the Conservator, please immediately advise our office so a modification of the Conservatorship may be filed.

I look forward to working with you in matters related to the estate.   I realize that these probate issues may feel a bit overwhelming.  Please do not hesitate to call me to review anything addressed in this letter or to go over the process in more detail.  Our goal is to make things as easy for you as possible.