SENATE BILL No. 863 October 28, 1999, Introduced by Senators HART, MURPHY and VAUGHN and referred to the Committee on Families, Mental Health and Human Services. A bill to amend 1998 PA 386, entitled "Estates and protected individuals code," by amending sections 1106, 5106, and 5313 (MCL 700.1106, 700.5106, and 700.5313). THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 1106. As used in this act: 2 (a) "Michigan prudent investor rule" means the fiduciary 3 investment and management rule prescribed by part 5 of this 4 article. 5 (b) "Minor" means an individual who is less than 18 years of 6 age. 7 (c) "Minor ward" means a minor for whom a guardian is 8 appointed solely because of minority. 9 (d) "Mortgage" means a conveyance, agreement, or arrangement 10 in which property is encumbered or used as security. 00804'99 ** GWH 2 1 (e) "Nonresident decedent" means a decedent who was 2 domiciled in another jurisdiction at the time of his or her 3 death. 4 (f) "Organization" means a corporation, business trust, 5 estate, trust, partnership, joint venture, association, limited 6 liability company, government, governmental subdivision or 7 agency, or another legal or commercial entity. 8 (g) "Parent" includes, but is not limited to, an individual 9 entitled to take, or who would be entitled to take, as a parent 10 under this act by intestate succession from a child who dies 11 without a will and whose relationship is in question. Parent 12 does not include an individual who is only a stepparent, foster 13 parent, or grandparent. 14 (h) "Patient advocate" means an individual designated to 15 exercise powers concerning another individual's care, custody, 16 and medical treatment as provided in section 5506. 17 (i) "Patient advocate designation" means the written docu- 18 ment executed and with the effect as described in sections 5506 19 to 5512. 20 (j) "Payor" means a trustee, insurer, business entity, 21 employer, government, governmental subdivision or agency, or 22 other person authorized or obligated by law or a governing 23 instrument to make payments. 24 (k) "Person" means an individual, partnership, corporation, 25 association, governmental entity, or other legal entity. 26 (l) "Personal representative" includes, but is not limited 27 to, an executor, administrator, successor personal 00804'99 ** 3 1 representative, and special personal representative, and any 2 other person who performs substantially the same function under 3 the law governing that person's status. 4 (m) "Petition" means a written request to the court for an 5 order after notice. 6 (n) "Proceeding" includes an application and a petition, and 7 may be an action at law or a suit in equity. A proceeding may be 8 denominated a civil action under court rules. 9 (O) "PROFESSIONAL FIDUCIARY" MEANS A PERSON OR ORGANIZATION 10 THAT PROVIDES FIDUCIARY SERVICES FOR A FEE TO 3 OR MORE UNRELATED 11 INDIVIDUALS. 12 (P)(o)"Property" means anything that may be the subject 13 of ownership, and includes both real and personal property or an 14 interest in real or personal property. 15 (Q)(p)"Protected individual" means a minor or other 16 individual for whom a conservator has been appointed or other 17 protective order has been made as provided in part 4 of article 18 V. 19 (R)(q)"Protective proceeding" means a proceeding under 20 the provisions of part 4 of article V. 21 Sec. 5106. (1) Subject tosubsections (2) and (3)THE 22 OTHER PROVISIONS OF THIS SECTION, the court may appoint or 23 approve A PROFESSIONAL FIDUCIARY as a guardian, limited or tempo- 24 rary guardian, or conservator under this act, or as a plenary 25 guardian or partial guardian as those terms are defined in sec- 26 tion 600 of the mental health code, 1974 PA 258, MCL 330.1600.,27a nonprofit corporation incorporated under the nonprofit00804'99 ** 4 1corporation act, 1982 PA 162, MCL 450.2101 to 450.3192, which2corporation's primary function is to provide fiduciary services3in the same manner as other fiduciaries under this act. This4section shall not be construed to make a person that is not a5nonprofit corporation described in this subsection ineligible to6be appointed or approved as a fiduciary.7 (2) The court shall only appoint acorporation8 PROFESSIONAL FIDUCIARY as authorized under subsection (1) if the 9 court finds on the recordbothALL of the following: 10 (a) The appointment of thenonprofit corporation11 PROFESSIONAL FIDUCIARY is in theward's or developmentally dis-12abled individual'sRESPONDENT'S best interests. 13 (b)Another qualified, suitable person has not come before14the court and expressed a willingnessTHERE IS NO SUITABLE INDI- 15 VIDUAL WILLING to serve in that fiduciary capacity. 16 (C) THE PROFESSIONAL FIDUCIARY HAS AGREED IN WRITING TO 17 COMPLY WITH ALL OF THE FOLLOWING AS PRESCRIBED BY STATUTE OR 18 SUPREME COURT RULE: 19 (i) ALL STANDARDS PRESCRIBED FOR THAT CLASS OF FIDUCIARY. 20 (ii) ALL COURT REPORTING REQUIREMENTS PRESCRIBED FOR THAT 21 CLASS OF FIDUCIARY, INCLUDING ACCURATELY AND COMPLETELY DIVULGING 22 ALL FIDUCIARY, ATTORNEY, ACCOUNTING, AND OTHER PROFESSIONAL 23 FEES. 24 (iii) PROVIDING AN ANNUAL REPORT TO THE STATE COURT ADMINIS- 25 TRATIVE OFFICE THAT INCLUDES AT LEAST ALL OF THE FOLLOWING: 26 (A) THE NUMBER OF INDIVIDUALS FOR WHOM THE PROFESSIONAL 27 FIDUCIARY SERVES AS A GUARDIAN OR CONSERVATOR. 00804'99 ** 5 1 (B) THE NUMBER OF EMPLOYEES PROVIDING THOSE SERVICES. 2 (C) A PROFESSIONALLY AUDITED INCOME AND EXPENSE RECORD. 3 (D) THE PROFESSIONAL FIDUCIARY HAS AGREED IN WRITING TO NOT 4 DO ANY OF THE FOLLOWING: 5 (i) PETITION A COURT FOR THE APPOINTMENT OF A GUARDIAN OR 6 CONSERVATOR. 7 (ii) COMMINGLE A WARD'S OR PROTECTED INDIVIDUAL'S MONEY WITH 8 THE PROFESSIONAL FIDUCIARY'S MONEY. 9 (iii) ENGAGE IN A TRANSACTION WITH A CONFLICT OF INTEREST, 10 INCLUDING A CONFLICT OF INTEREST IN THE SALE OF REAL PROPERTY. 11 (iv) OFFER OR GIVE A REWARD, MONETARY INCENTIVE, OR KICKBACK 12 TO A PUBLIC OFFICIAL, PUBLIC EMPLOYEE, OR OTHER PERSON IN RETURN 13 FOR BEING NOMINATED OR BEING APPOINTED AS GUARDIAN OR CONSERVATOR 14 OR FOR FAVORABLE TREATMENT BY A PUBLIC OFFICIAL, PUBLIC EMPLOYEE, 15 OR OTHER PERSON. 16 (v) SOLICIT OR ACCEPT A REWARD, MONETARY INCENTIVE, OR KICK- 17 BACK FROM A PERSON IN RETURN FOR PURCHASING PRODUCTS OR SERVICES, 18 INCLUDING, BUT NOT LIMITED TO, HEALTH CARE AND FUNERAL SERVICES, 19 FOR A WARD OR PROTECTED INDIVIDUAL. 20 (vi) HAVE AN OFFICER, EXECUTIVE, OR PRINCIPAL OF THE PROFES- 21 SIONAL FIDUCIARY GIVE A CAMPAIGN CONTRIBUTION TO A JUDGE OR JUDI- 22 CIAL CANDIDATE IN THE COUNTY OR COUNTIES IN WHICH THE PERSON 23 ACCEPTS FIDUCIARY APPOINTMENTS BY THE COURT. 24 (vii) ALLOW A PUBLIC OFFICIAL OR COURT EMPLOYEE TO HAVE AN 25 OWNERSHIP INTEREST IN THE PROFESSIONAL FIDUCIARY. 26 (3) The court shall not appoint acorporationPROFESSIONAL 27 FIDUCIARY as authorized under subsection (1) unless the 00804'99 ** 6 1corporationPROFESSIONAL FIDUCIARY files a bond in an amount 2 and with the conditions as determined by the court.TheFOR A 3 CONSERVATOR, THE sureties and liabilities of the bond shall be as 4 provided in sections 5410 and 5411.The court shall not appoint5a corporation described in subsection (1) as a personal represen-6tative or trustee.7 (4) AcorporationPROFESSIONAL FIDUCIARY appointed under 8 this section shall not receive as a result of that appointment a 9 benefit beyond compensation specifically authorized for that type 10 of fiduciary by this act or the mental health code, 1974 PA 258, 11 MCL 330.1001 to 330.2106. 12 Sec. 5313. (1)ATHE COURT MAY APPOINT A competent person 13, including a nonprofit corporation described in section 5106,14may be appointedAS guardian of an incapacitated individual. 15 The court shall not appoint as a guardian an agency, public or 16 private, that financially benefits from directly providing hous- 17 ing, medical, or social services to the incapacitated 18 individual. 19 (2) In appointing a guardian under this section, the court 20 shall appoint a person, if suitable and willing to serve, desig- 21 nated by the individual who is the subject of the petition, 22 including a designation made in a durable power of attorney. If 23 a specific designation is not made or a person designated is not 24 suitable or willing to serve, the court may appoint as a guardian 25 a person named as attorney in fact through a durable power of 26 attorney. 00804'99 ** 7 1 (3) If a person is not designated under subsection (2) or a 2 person designated under subsection (2) is not suitable or willing 3 to serve, the court may appoint as a guardian an individual who 4 is related to THE INDIVIDUAL WHO IS the subject of the petition 5 in the following order of preference: 6 (a) The incapacitated individual's spouse. This subdivision 7 shall be considered to include a person nominated by will or 8 other writing signed by a deceased spouse. 9 (b) An adult child of the incapacitated individual. 10 (c) A parent of the incapacitated individual. This subdivi- 11 sion shall be considered to include a person nominated by will or 12 other writing signed by a deceased parent. 13 (d) A relative of the incapacitated individual with whom the 14 INCAPACITATED individual has resided for more than 6 months 15 before the filing of the petition. 16 (e) A person nominated bytheA person who is caring for 17 the INCAPACITATED individual or paying benefits to the 18 INCAPACITATED individual. 19 (4) If none of the persons listed in subsection (3)isARE 20 suitable or willing to serve, the court may appoint any competent 21 person who is suitable and willing to serve. 22 (5) THE COURT SHALL NOT FIND A PROFESSIONAL FIDUCIARY SUIT- 23 ABLE TO SERVE UNLESS ALL OF THE FOLLOWING ARE TRUE: 24 (A) THE PROFESSIONAL FIDUCIARY HAS AT LEAST 1 EMPLOYEE 25 EXCLUSIVELY ASSIGNED TO THE CARE OF WARDS FOR EACH 25 INDIVIDUALS 26 FOR WHOM IT SERVES AS GUARDIAN. 00804'99 ** 8 1 (B) THE PROFESSIONAL FIDUCIARY ESTABLISHES AND MAINTAINS A 2 SCHEDULE OF VISITATION SO THAT AN EMPLOYEE RESPONSIBLE FOR A 3 WARD'S CARE VISITS THE WARD AT LEAST ONCE EACH CALENDAR MONTH. 4 (C) THE PROFESSIONAL FIDUCIARY HAS FILED A BOND THAT IS NOT 5 LESS THAN THE AMOUNT OF COLLECTIVE ANNUAL INCOME WITHIN ITS CON- 6 TROL FOR ALL INDIVIDUALS FOR WHOM IT SERVES AS GUARDIAN. 7 Enacting section 1. This amendatory act takes effect April 8 1, 2000. 00804'99 ** Final page. GWH