Guardianship Law Change

There was a big change in guardianship law – or was there?

Public Act 173 took effect October 1, 2012 (and can be found on our website’s professional resources page).  It is a big bill, modifying 8 statutes.  It purports to be a major revision of guardianship and conservatorship law in Michigan, and while the bill clearly matters to those of us involved in these proceedings, the extent to which this law changes the dynamics of a guardianship proceeding won’t be known until the new forms come out.

I was a member of the State Court Administrator’s Office Probate Forms Committee for years. The work of this committee (which I understand has now been broken down into several work groups), is important although at times tedious beyond belief.  It is charged with taking the changes in the law and modifying the forms that are required to be used in court filings to reflect those changes.

This new law requires several things:

•  It puts more work on the guardian ad litem (the “GAL”) (the person appointed by the court to investigate the petition for guardianship and to provide a report to the court of its findings before the hearing).  The new law expands the information that the GAL is to provide the subject of the petition (the would-be ward).  In cases where there is not also a petition for conservatorship pending, the GAL is required to estimate the value of the ward’s estate so that the Court can decide if a conservatorship would be beneficial.

•  The guardian, if appointed, is obligated under the new law to tell the court is the assets in the estate of the ward are significantly more than what the GAL estimated.

•  Bonds are required in all conservatorships, without exception, where the liquid assets exceed the small estates ceiling, currently $21,000.

•  The powers of the guardian must be enumerated by court order.  That is, the court must decide which powers it grants to each guardian.

Take aways:

Conservatorships will become more difficult for families to handle themselves.  The bond requirement will be too expensive for many estates, and a good number of lay people seeking to serve as conservators will have something in their past that will preclude them from being bondable.  Some relief from this requirement might be achieved by using restricted accounts, and only requiring bonding as to those amounts that remain unrestricted.  It will be interesting to see if Courts are willing to dance this lightly around the new statute’s requirements.

The requirement that the Court must enumerate the powers of the guardian is the trickiest issue.  If attorneys preparing orders of guardianship are required to anticipate and justify every power that the guardian might exercise, they will be hard-pressed to do so without assistance from the forms committee – such as a box on the form that elects “all powers granted by law.”

In the end, this bill has the potential to increase the need for public guardians and conservators, a result which I suspect was not intended by the bill’s proponents.  The SCAO forms committee will have its work cut out for it as it decides how to deal with this law, so as to not create an unworkable process.  Good luck to them.