Schuette: It's Time to Reform State Public Administrator System

Contact: Andrea Bitely, Megan Hawthorne; (517) 373-8060

September 7, 2017

LANSING – Michigan Attorney General Bill Schuette today announced his support for legislation recently introduced by Rep. Jim Runestad, R – White Lake, and Rep. Jim Ellison, D- Royal Oak, that makes critical changes to the state public administrator system. The changes are aimed at combatting probate abuse by requiring a more thorough search for heirs and sets up a clearer path of action for public administrators.

The Attorney General’s Office appoints county public administrators, who primarily serve as representatives for estates in which a deceased person has no known heirs.

The legislation was introduced after the questionable practice of a small number of public administrators was discovered. The questionable practices involved properties in tax and mortgage foreclosure, where no heirs opened the estate. Public Administrators who violated the high standards of their office have been terminated. The Department of Attorney General worked with the legislators to ensure the legislation brings the 1947 (significantly amended in 1976) statute up to date, and sets criminal penalties for those that don’t follow procedures.

“Recent actions by a handful of individuals has made it clear that it is time to make changes to the public administration system in Michigan,” said Schuette. “The current law has not been updated in nearly 40 years and while most abided by the law, the abuses that occurred and the families who lost homes and inheritances cannot be undone. It is our job to make sure it does not happen again. This new legislation will make the necessary changes to ensure there is a direct path to follow in the probate process and will help ensure heirs are better protected.”

“Unfortunately, some public administrators have been taking advantage of their positions to charge excessive fees thus usurping property from people when their family members die,” said Runestad, R-White Lake. “While procedures already in place are aimed at preventing such abuse, it’s now clear that the law did not go far enough. The legislation we’re working on will go much further to protect families and ensure that all property is passed down to the rightful heirs.”

House Bills Now Introduced to Reform PA System

Reps. Ellison and Runestad worked with Schuette and officials with the Oakland County Treasurer’ Office to develop the legislation to remedy a solution.

House Bill 4821 - Introduced by Rep. Runestad:

  • Current law states a county public administrator cannot be appointed to represent an estate for 42 days from the time of the decedent’s death, this bill extends that time frame to 93 days;
  • Requires a formal proceeding for a county public administrator to be appointed;
  • When opening an estate that is subject to tax or mortgage foreclosure, county public administrators must:
    • Post notice of a hearing on the real property;
    • Explain their search for heirs to the estate, which must include use of an electronic searching service;
    • Send a notice to heirs with an explanation, informing them they may object to the appointment of a public administrator and that they have the ability to petition the court for a hearing on the matter.
  • Any public administrator who knowingly fails to provide the required notices is guilty of a misdemeanor, punishable by up to 90 days in jail and/or a $1,000 fine.

House Bill 4822 – Introduced by Rep. Ellison

  • Requires public administrators to submit written notice to the county treasurer’s office if the decedent’s property is subject to foreclosure;
  • Requires county public administrators to get court approval before selling a property they are representing and if the property is occupied by an heir of the deceased then county public administrator must get written notice from the state public administrator not objecting to the sale;
  • Finally, the bill requires court approval of any outside company used by the state or county public administrators that involve a decedent’s property. It also limits fees taken by outside companies to 10% of the net proceeds.

House Bills 4821 and 4822 have been referred to the House Judiciary Committee. Runestad, who chairs the committee, said the legislation will be up for a committee hearing September 19 at noon.

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The Attorney General’s Office appoints county public administrators, who primarily serve as representatives for estates in which a deceased person has no known heirs.

The legislation was introduced after the questionable practice of a small number of public administrators was discovered. The questionable practices involved properties in tax and mortgage foreclosure, where no heirs opened the estate. Public Administrators who violated the high standards of their office have been terminated. The Department of Attorney General worked with the legislators to ensure the legislation brings the 1947 (significantly amended in 1976) statute up to date, and sets criminal penalties for those that don’t follow procedures.

“Recent actions by a handful of individuals has made it clear that it is time to make changes to the public administration system in Michigan,” said Schuette. “The current law has not been updated in nearly 40 years and while most abided by the law, the abuses that occurred and the families who lost homes and inheritances cannot be undone. It is our job to make sure it does not happen again. This new legislation will make the necessary changes to ensure there is a direct path to follow in the probate process and will help ensure heirs are better protected.”

“Unfortunately, some public administrators have been taking advantage of their positions to charge excessive fees thus usurping property from people when their family members die,” said Runestad, R-White Lake. “While procedures already in place are aimed at preventing such abuse, it’s now clear that the law did not go far enough. The legislation we’re working on will go much further to protect families and ensure that all property is passed down to the rightful heirs.”

House Bills Now Introduced to Reform PA System

Reps. Ellison and Runestad worked with Schuette and officials with the Oakland County Treasurer’ Office to develop the legislation to remedy a solution.

House Bill 4821 - Introduced by Rep. Runestad:

  • Current law states a county public administrator cannot be appointed to represent an estate for 42 days from the time of the decedent’s death, this bill extends that time frame to 93 days;
  • Requires a formal proceeding for a county public administrator to be appointed;
  • When opening an estate that is subject to tax or mortgage foreclosure, county public administrators must:
    • Post notice of a hearing on the real property;
    • Explain their search for heirs to the estate, which must include use of an electronic searching service;
    • Send a notice to heirs with an explanation, informing them they may object to the appointment of a public administrator and that they have the ability to petition the court for a hearing on the matter.
  • Any public administrator who knowingly fails to provide the required notices is guilty of a misdemeanor, punishable by up to 90 days in jail and/or a $1,000 fine.

House Bill 4822 – Introduced by Rep. Ellison

  • Requires public administrators to submit written notice to the county treasurer’s office if the decedent’s property is subject to foreclosure;
  • Requires county public administrators to get court approval before selling a property they are representing and if the property is occupied by an heir of the deceased then county public administrator must get written notice from the state public administrator not objecting to the sale;
  • Finally, the bill requires court approval of any outside company used by the state or county public administrators that involve a decedent’s property. It also limits fees taken by outside companies to 10% of the net proceeds.

House Bills 4821 and 4822 have been referred to the House Judiciary Committee. Runestad, who chairs the committee, said the legislation will be up for a committee hearing September 19 at noon.

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