February 26, 2014, Introduced by Reps. Lauwers, Cotter, Geiss, LaFontaine, Leonard, Kowall and Jenkins and referred to the Committee on Judiciary.
A bill to amend 1998 PA 386, entitled
"Estates and protected individuals code,"
by amending sections 3709 and 3715 (MCL 700.3709 and 700.3715),
section 3715 as amended by 2009 PA 46, and by adding sections 3715a
and 3723.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3709. (1) Except as otherwise provided by a decedent's
will
or by this section, a personal representative has a right to ,
and, if necessary for purposes of administration, shall take
possession
or control of , the
decedent's property, other than
digital property subject to subsection (2), except that real
property or tangible personal property may be left with or
surrendered to the person presumptively entitled to that property
unless or until, in the personal representative's judgment,
possession of the property will be necessary for purposes of
administration. A personal representative's request for delivery of
property possessed by an heir or devisee is conclusive evidence, in
an action against the heir or devisee for possession of that
property, that the possession of the property by the personal
representative is necessary for purposes of administration. The
personal representative shall pay taxes on, and take all steps
reasonably necessary for the management, protection, and
preservation of, the estate in the personal representative's
possession. The personal representative may maintain an action to
recover possession of, or to determine the title to, property.
(2) Except as otherwise provided by a decedent's will, and
subject to applicable law and a terms-of-service agreement, with
respect to a decedent's digital property, a personal representative
has the lawful consent of the decedent and is an authorized user
under all applicable state and federal statutes. A personal
representative has the right to, and if necessary for purposes of
administration shall, exercise control over the decedent's digital
property. A personal representative's written request for access
to, or control of, digital property is conclusive evidence in any
action that the access to, exercise of control of, or both, digital
property by the personal representative is necessary for purposes
of administration. The personal representative may maintain an
action to gain access to, exercise control of, or both, digital
property in accordance with section 3715a.
Sec. 3715. Except as restricted or otherwise provided by the
will or by an order in a formal proceeding, and subject to the
priorities stated in section 3902, a personal representative,
acting reasonably for the benefit of interested persons, may
properly do any of the following:
(a) Retain property owned by the decedent pending distribution
or liquidation, including property in which the personal
representative is personally interested or that is otherwise
improper for trust investment.
(b) Receive property from a fiduciary or another source.
(c) Perform, compromise, or refuse performance of a contract
of the decedent that continues as an estate obligation, as the
personal representative determines under the circumstances. If the
contract is for a conveyance of land and requires the giving of
warranties, the personal representative shall include in the deed
or other instrument of conveyance the required warranties. The
warranties are binding on the estate as though the decedent made
them but do not bind the personal representative except in a
fiduciary capacity. In performing an enforceable contract by the
decedent to convey or lease land, the personal representative,
among other possible courses of action, may do any of the
following:
(i) Execute and deliver a deed of conveyance for cash payment
of the amount remaining due or for the purchaser's note for the
amount remaining due secured by a mortgage on the land.
(ii) Deliver a deed in escrow with directions that the
proceeds, when paid in accordance with the escrow agreement, be
paid to the decedent's successors, as designated in the escrow
agreement.
(d) If, in the judgment of the personal representative, the
decedent would have wanted the pledge satisfied under the
circumstances, satisfy a written charitable pledge of the decedent
irrespective of whether the pledge constitutes a binding obligation
of the decedent or is properly presented as a claim.
(e)
If funds are money is not needed to meet a debt or
expenses
currently payable and are is
not immediately
distributable, deposit or invest liquid assets of the estate,
including
funds money received from the sale of other property, in
accordance with the Michigan prudent investor rule.
(f) Acquire or dispose of property, including land in this or
another state, for cash or on credit, at public or private sale;
and manage, develop, improve, exchange, partition, change the
character of, or abandon estate property.
(g) Make an ordinary or extraordinary repair or alteration in
a building or other structure, demolish an improvement, or raze an
existing or erect a new party wall or building.
(h) Subdivide, develop, or dedicate land to public use, make
or obtain the vacation of a plat or adjust a boundary, adjust a
difference in valuation on exchange or partition by giving or
receiving consideration, or dedicate an easement to public use
without consideration.
(i) Enter into a lease as lessor or lessee for any purpose,
with or without an option to purchase or renew, for a term within
or extending beyond the period of administration.
(j) Enter into a lease or arrangement for exploration and
removal of minerals or another natural resource, or enter into a
pooling or unitization agreement.
(k)
Abandon property when, if,
in the opinion of the personal
representative, it is valueless, or is so encumbered or in such a
condition as to be of no benefit to the estate.
(l) Vote stocks or another security in person or by general or
limited proxy.
(m) Pay a call, assessment, or other amount chargeable or
accruing against or on account of a security, unless barred by a
provision relating to claims.
(n) Hold a security in the name of a nominee or in other form
without disclosure of the estate's interest. However, the personal
representative is liable for an act of the nominee in connection
with the security so held.
(o) Insure the estate property against damage, loss, and
liability and insure the personal representative against liability
as to third persons.
(p) Borrow property with or without security to be repaid from
the estate property or otherwise, and advance money for the
estate's protection.
(q) Effect a fair and reasonable compromise with a debtor or
obligor, or extend, renew, or in any manner modify the terms of an
obligation owing to the estate. If the personal representative
holds
a mortgage, pledge, or other lien upon on another person's
property, the personal representative may, in lieu of foreclosure,
accept a conveyance or transfer of encumbered property from the
property's owner in satisfaction of the indebtedness secured by
lien.
(r) Pay a tax, an assessment, the personal representative's
compensation, or another expense incident to the estate's
administration.
(s) Sell or exercise a stock subscription or conversion right.
(t) Consent, directly or through a committee or other agent,
to the reorganization, consolidation, merger, dissolution, or
liquidation of a corporation or other business enterprise.
(u) Allocate items of income or expense to either estate
income or principal, as permitted or provided by law.
(v) Employ, and pay reasonable compensation for reasonably
necessary services performed by, a person, including, but not
limited to, an auditor, investment advisor, or agent, even if the
person is associated with the personal representative, to advise or
assist the personal representative in the performance of
administrative duties; act on such a person's recommendations
without independent investigation; and, instead of acting
personally, employ 1 or more agents to perform an act of
administration, whether or not discretionary.
(w) Employ an attorney to perform necessary legal services or
to advise or assist the personal representative in the performance
of the personal representative's administrative duties, even if the
attorney is associated with the personal representative, and act
without
independent investigation upon on
the attorney's
recommendation. An attorney employed under this subdivision shall
receive reasonable compensation for his or her employment.
(x) Prosecute or defend a claim or proceeding in any
jurisdiction for the protection of the estate and of the personal
representative in the performance of the personal representative's
duties.
(y) Sell, mortgage, or lease estate property or an interest in
estate property for cash, credit, or part cash and part credit, and
with or without security for unpaid balances.
(z) Continue a business or venture in which the decedent was
engaged at the time of death as a sole proprietor or a general
partner, including continuation as a general partner by a personal
representative that is a corporation, in any of the following
manners:
(i) In the same business form for a period of not more than 4
months after the date of appointment of a general personal
representative if continuation is a reasonable means of preserving
the value of the business, including goodwill.
(ii) In the same business form for an additional period of time
if approved by court order in a formal proceeding to which the
persons interested in the estate are parties.
(iii) Throughout the period of administration if the personal
representative incorporates the business or converts the business
to a limited liability company and if none of the probable
distributees of the business who are competent adults object to its
incorporation or conversion and its retention in the estate.
(aa) Change the form of a business or venture in which the
decedent was engaged at the time of death through incorporation or
formation as a limited liability company or other entity offering
protection against or limiting exposure to liabilities.
(bb) Provide for the personal representative's exoneration
from personal liability in a contract entered into on the estate's
behalf.
(cc) Respond to an environmental concern or hazard affecting
estate property as provided in section 3722.
(dd) Satisfy and settle claims and distribute the estate as
provided in this act.
(ee) Make, revise, or revoke an available allocation, consent,
or election in connection with a tax matter as appropriate in order
to carry out the decedent's estate planning objectives and to
reduce the overall burden of taxation, both in the present and in
the future. This authority includes, but is not limited to, all of
the following:
(i) Electing to take expenses as estate tax or income tax
deductions.
(ii) Electing to allocate the exemption from the tax on
generation skipping transfers among transfers subject to estate or
gift tax.
(iii) Electing to have all or a portion of a transfer for a
spouse's benefit qualify for the marital deduction.
(iv) Electing the date of death or an alternate valuation date
for federal estate tax purposes.
(v) Excluding or including property from the gross estate for
federal estate tax purposes.
(vi) Valuing property for federal estate tax purposes.
(vii) Joining with the surviving spouse or the surviving
spouse's personal representative in the execution and filing of a
joint income tax return and consenting to a gift tax return filed
by the surviving spouse or the surviving spouse's personal
representative.
(ff) Divide portions of the estate, including portions to be
allocated into trust, into 2 or more separate portions or trusts
with substantially identical terms and conditions, and allocate
property between them, in order to simplify administration for
generation skipping transfer tax purposes, to segregate property
for management purposes, or to meet another estate or trust
objective.
(gg) Subject to the applicable terms-of-service agreement,
exercise control over the decedent's digital property.
Sec. 3715a. (1) On receipt of a personal representative's
written request under this subsection for access to digital
property, ownership of digital property, or a copy of a digital
asset, a digital custodian shall provide the personal
representative with the requested access, ownership, or copy, as
applicable. A personal representative's written request under this
subsection must be accompanied by a certified copy of letters
issued to the personal representative.
(2) A digital custodian shall comply not later than 56 days
after receipt of a request made under subsection (1). If the
digital custodian fails to comply, the personal representative may
petition the court for an order directing compliance. If, not later
than 56 days after receiving a request made under subsection (1),
the digital custodian fails to comply with the request, the
personal representative may petition the court for an order
directing compliance.
(3) A digital custodian is not liable for an action done in
compliance with this section.
Sec. 3723. (1) A person interested in the estate may file a
petition in the court for an order to limit or eliminate a personal
representative's power over digital property.
(2) On receipt of a petition under this section, the court
shall set a date for a hearing on the petition. The hearing date
shall be not less than 14 days and not more than 56 days after the
date the petition is filed.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 97th Legislature are
enacted into law:
(a) Senate Bill No. ____ or House Bill No. 5368 (request no.
01198'13).
(b) Senate Bill No. ____ or House Bill No. 5366 (request no.
04551'13).
(c) Senate Bill No. ____ or House Bill No. 5369 (request no.
04552'13).
(d) Senate Bill No. ____ or House Bill No. 5370 (request no.
04553'13).