Michigan Laws 700.3713 – Sale, encumbrance, or transaction involving conflict of interest; voidable; exceptions; presumption; compliance with Michigan prudent investor rule; exceptions
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Terms Used In Michigan Laws 700.3713
- Agent: includes , but is not limited to, an attorney-in-fact under a durable or nondurable power of attorney and an individual authorized to make decisions as a patient advocate concerning another's health care. See Michigan Laws 700.1103
- Attorney: means , if appointed to represent a child under the provisions referenced in section 5213, an attorney serving as the child's legal advocate in the manner defined and described in section 13a of chapter XIIA of the probate code of 1939, 1939 PA 288, MCL 712A. See Michigan Laws 700.1103
- Claim: includes , but is not limited to, in respect to a decedent's or protected individual's estate, a liability of the decedent or protected individual, whether arising in contract, tort, or otherwise, and a liability of the estate that arises at or after the decedent's death or after a conservator's appointment, including funeral and burial expenses and costs and expenses of administration. See Michigan Laws 700.1103
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Court: means the probate court or, when applicable, the family division of circuit court. See Michigan Laws 700.1103
- Decedent: A deceased person.
- Descendant: means , in relation to an individual, all of his or her descendants of all generations, with the relationship of parent and child at each generation being determined by the definitions of child and parent contained in this act. See Michigan Laws 700.1103
- Estate: includes the property of the decedent, trust, or other person whose affairs are subject to this act as the property is originally constituted and as it exists throughout administration. See Michigan Laws 700.1104
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: includes , but is not limited to, a personal representative, funeral representative, guardian, conservator, trustee, plenary guardian, partial guardian, and successor fiduciary. See Michigan Laws 700.1104
- Financial institution: means an organization authorized to do business under state or federal laws relating to a financial institution and includes, but is not limited to, a bank, trust company, savings bank, building and loan association, savings and loan company or association, credit union, insurance company, and entity that offers mutual fund, securities brokerage, money market, or retail investment accounts. See Michigan Laws 700.1104
- Michigan prudent investor rule: means the fiduciary investment and management rule prescribed by part 5 of this article. See Michigan Laws 700.1106
- Money: means legal tender or a note, draft, certificate of deposit, stock, bond, check, or credit card. See Michigan Laws 700.1106
- Parent: includes , but is not limited to, an individual entitled to take, or who would be entitled to take, as a parent under this act by intestate succession from a child who dies without a will and whose relationship is in question. See Michigan Laws 700.1106
- Person: means an individual or an organization. See Michigan Laws 700.1106
- Personal representative: includes , but is not limited to, an executor, administrator, successor personal representative, and special personal representative, and any other person, other than a trustee of a trust subject to article VII, who performs substantially the same function under the law governing that person's status. See Michigan Laws 700.1106
- Property: means anything that may be the subject of ownership, and includes both real and personal property or an interest in real or personal property. See Michigan Laws 700.1106
- Statute: A law passed by a legislature.
- Trust: includes , but is not limited to, an express trust, private or charitable, with additions to the trust, wherever and however created. See Michigan Laws 700.1107
(1) A sale, encumbrance, or other transaction involving the investment or management of estate property in which the personal representative has a substantial beneficial interest or that is otherwise affected by a substantial conflict between the personal representative’s fiduciary and personal interests is voidable by an interested person unless any of the following are true:
(a) The will or a contract entered into by the decedent expressly authorized the transaction.
(b) The transaction is approved by the court after notice to interested persons.
(c) The transaction involves a contract entered into or claim acquired by the personal representative before the person became or contemplated becoming personal representative.
(d) The transaction is otherwise permitted by statute.
(2) A sale, encumbrance, or other transaction involving the investment or management of estate property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the personal representative with any of the following:
(a) The personal representative’s spouse.
(b) The personal representative’s descendant, sibling, or parent or the spouse of the personal representative’s descendant, sibling, or parent.
(c) An agent or attorney of the personal representative.
(d) A corporation or other person or enterprise in which the personal representative, or a person that owns a significant interest in the personal representative, has an interest that might affect the personal representative’s best judgment.
(3) A transaction not concerning estate property in which the personal representative engages in the personal representative’s individual capacity involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the estate.
(4) An investment by a personal representative in securities of an investment company or investment trust to which the personal representative, or its affiliate, provides services in a capacity other than as personal representative is not presumed to be affected by a conflict between personal and fiduciary interests if the investment otherwise complies with the Michigan prudent investor rule. In addition to its compensation for acting as personal representative, the personal representative may be compensated by the investment company or investment trust for providing those services out of fees charged to the estate. If the personal representative receives compensation from the investment company or investment trust for providing investment advisory or investment management services, the personal representative shall at least annually notify the interested persons of the rate and method by which that compensation was determined.
(5) In voting shares of stock or in exercising powers of control over similar interests in other forms of enterprise, the personal representative shall act in the best interests of the beneficiaries. If the estate is the sole owner of a corporation or other form of enterprise, the personal representative shall elect or appoint directors or other managers to manage the corporation or enterprise in the best interest of the beneficiaries.
(6) This section does not preclude the following transactions, if fair to the beneficiaries:
(a) An agreement between the personal representative and the interested persons relating to the compensation of the personal representative.
(b) Payment of reasonable compensation to the personal representative.
(c) A transaction between the estate and another trust or conservatorship of which the personal representative is a fiduciary or in which a beneficiary has an interest.
(d) A deposit of estate money in a financial institution operated by or affiliated with the personal representative.
(e) An advance by the personal representative of money for the protection of the estate.