Prove It!

Earlier this month, the Michigan Court of Appeals clarified the standard of proof that must be met in determining whether a conservator has breached the fiduciary duty he or she owes to the individual whose assets are being managed under the conservatorship.

In In re Conservatorship of Murray, the Court of Appeals ruled that “preponderance of the evidence” is the proper standard to apply, meaning that a fact is considered proved if it is more likely than not to have occurred. This was bad news for Mr. Murray, the conservator, who had argued that each charge levied against him (mismanaging his mother’s funds, self-dealing, failing to disclose assets or document expenses, and failing to properly report or meet court deadlines) must be proved by the much higher “clear and convincing evidence” standard. Bottom line, the Court of Appeals affirmed the lower court’s order requiring Mr. Murray to pay $51,348.86 to his mother’s estate.

The Court’s ruling is a cautionary tale for anyone acting under a financial power of attorney or serving as conservator, trustee, or personal representative of an estate: You must keep detailed records, preserve receipts, report to the court and others as required, manage assets prudently, always act in the best interests of the ward or the estate, and (very importantly) follow the advice of your legal, tax and financial advisors.

If you have questions about your fiduciary duty, please feel free to contact our office at info@wrightbeamer.com or (248) 477-6300.