Some are losing their inheritance as a result of abuses in the public administrator process within the Estates and Protected Individuals Code, said Rep. Jim Runestad (R-White Lake) Tuesday.
“So the abuses have to stop,” he said. To that end, his House Judiciary Committee voted 10-0 to report out HB 4821 and HB 4822 to tighten up on the public administrator process.
HB 4821, sponsored by Runestad, would extend the timeframe when a person dies with no known heirs before a public administrator can step in and take over the estate, from 42 days to 91 days. Initially, Runestad asked the time period be pushed out to 93 days, but amended that to 91 today.
The bill would also require the public administrator to conduct a reasonable search for heirs and post a notice of any hearing on the decedent’s property. It would also require the public administrator to advise any heirs found that they can petition the court or ask that the representative be removed at any time during the estate’s administration.
Failure to search for heirs or inform known heirs of the process would be a misdemeanor carrying a $1,000 fine or up to 90 days in jail.
Last week, committee members heard how a small number of public administrators — who are supposed to protect the assets of an estate should an heir show up — have been abusing the system to extract high fees from estates while heirs get “a pittance.”
Committee members heard testimony from Rochester Hills resident Judy D’Angelo, whose mother died in 2012. A public administrator took over the estate, because back taxes were owed on the mother’s house, and sold it for $38,000. D’Angelo and her brother received less than $2,000 each in proceeds. A month later, the house resold for $97,000. Meanwhile, the public administrator claimed $5,000 in fees while the real estate broker made even more, she said.
HB 4822, a companion bill sponsored by Rep. Jim Ellison (D-Royal Oak), would stop a public administrator from selling a house without approval of the court, set fees at no more than 10 percent of the proceeds of any sale of real estate and allow a court to order a refund if it determines a public administrator or representative received excessive compensation.
State Public Administrator Mike Moody said last week that the public administrators who have been abusing the system in Oakland and Macomb counties have been terminated.
And while the bills will address the problems in the area of no heir estates, several other areas where individuals have been cheated out of property were pointed out by the Oakland County Clerk.
“I’m going to talk to Lisa Brown,” Runestad said. “She and I sat down in my office. I liked a number of things that she was proposing. With this kind of a bill, when you do one thing, it starts impacting so many other things. This is something that needs to be done right away and make sure that this is stopped. All these other things that she was proposing, I want to do it the right way. This has been over a year of work. I suspect her recommendations are going to require the same kinds of things.”