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BlogsPublications | September 22, 2016
3 minute read

COA: Probate inventory fee must be paid if estate has sufficient assets, even if it means selling the personal representative’s home

The probate inventory fee required under Michigan law is paid from the assets of the estate, not from the personal representative’s own funds, says the Michigan Court of Appeals in consolidated appeals in In re Estate of DeCoste, Nos. 327990 and 327993. The personal representative’s inability to pay is therefore irrelevant to the waiver or suspension of this fee. If the estate’s only property is a single real estate asset, then the personal representative must liquidate it to pay the fee, even if the personal representative is living in that home.

Mark DeCoste and Gloria Doty, each serving as the sole personal representative for the respective estates of their departed loved ones, requested from the probate court a waiver of the inventory fee. Both DeCoste and Doty were indigent and receiving public assistance. Each estate contained a single asset of real estate, valued respectively at $56,200 and $64,242. At the time of the commencement of probate proceedings, DeCoste had lived in the home for over 10 years. The probate court in both cases denied the waiver request, reasoning each time that the inventory fee is an expense of administration of the decedent’s estate, that the estate had enough assets to pay the fee, and that the personal representative’s indigence is immaterial to the issue of waiver of the fee.

MCL 700.3706 requires the personal representative of an estate to prepare an inventory of property owned by the decedent at the time of death, including the fair market value of each listed item. The personal representative must send a copy of the inventory to all interested parties, and must submit to the court information necessary to calculate the probate inventory fee. That calculation is governed by MCL 600.871, which also states that the inventory fee is collected “as an expense of administration on the value of all assets.” That statute also provides that the fee must be paid no later than the closing of the estate or within one year after the commencement of probate proceedings, whichever is earlier.

The court in the instant case relied on the plain language of the statute and a previous appellate opinion interpreting it to conclude that the value of the assets in the estate, rather than the ability of the personal representative to pay the fee from personal funds, controls whether a waiver or suspension is appropriate. The court also borrowed support from MCL 700.3805(1), which provides that the personal representative pays the costs and expenses of probate administration only where the estate property is insufficient to pay all claims.

The court, citing MCL 700.3701, MCL 700.3703(1), and MCL 700.3711, noted that the personal representative owes a fiduciary duty to the estate from the moment he or she is appointed, and that the duty requires a personal representative to take control of and liquidate property if necessary for the purposes of administration of the estate. Even though the appellants here were beneficiaries who did not want to liquidate the home in each respective estate, the court found that their fiduciary duty was to pay the costs and expenses of administration.

The Court of Appeals affirmed the probate courts’ denials of appellants’ waiver requests and remanded for further proceedings.