Legislation combating probate fraud gains committee approval

The House Judiciary Committee today approved legislation introduced by state Reps. Jim Runestad and Jim Ellison to combat probate fraud by requiring more safeguards for heirs of an estate.

The bipartisan legislation was developed with input from the Attorney General’s Office after the controversial practices of some county public administrators in southeast Michigan were brought to light. The Attorney General’s Office appoints county public administrators, who serve as representatives for estates in which a deceased person has no known heirs.

“This past year we became aware of a situation in Macomb and Oakland whereby heirs were losing rights to property through a fraud scheme,” said Runestad, R-White Lake, who chairs the Judiciary Committee. “I wasn’t going to sit back and allow corrupt public administrators to use their positions to take advantage of residents, so I immediately started working on a remedy to protect families and assets and ensure property is passed down to the rightful heirs by closing loopholes in current statute.”

The issue brought Runestad and Ellison together with State Public Administrator Michael Moody, Attorney General Bill Schuette, Oakland County Treasurer Andy Meisner and Oakland County Clerk Lisa Brown to develop the legislation.

Current law allows county public administrators to be appointed to represent an estate if another personal representative is not identified within 42 days. Runestad’s legislation, House Bill 4821, extends the timeframe to 91 days and requires a formal proceeding for a county public administrator to be appointed. Current law allows this to take place through an informal procedure.

HB 4822, introduced by Ellison, establishes a line of communication between county treasurers and public administrators to verify that occupants of a home and heirs are properly notified of proceedings in the event of a tax foreclosure. If a property is sold, the bills prevent real estate or asset recovery fees from exceeding 10 percent of the net proceeds.

“We want to make sure residents are protected when they are grieving the loss of a loved one and every reasonable measure is taken to find rightful heirs before estates are opened in probate,” said Ellison, D-Royal Oak. “I’m very troubled that rightful heirs have had their relatives’ homes sold out from under them and these estates are being charged such excessive fees. These reforms will make sure the heirs’ interests are protected.”

Another reform requires public administrators seeking appointment as personal representatives to give notice to heirs and describe their search for heirs, which must now include an electronic searching service.

“These bills will strengthen the notice requirements, protect against excessive realtor fees and thereby protect heirs and their inheritance,” Moody said.

House Bills 4821-22 advance to the full House for consideration.