Take a look at this recent Michigan Court of Appeals case where the court upheld an order removing a father as his son’s conservator, after finding that the father wrongfully withdrew and spent life insurance proceeds. After his seven-year-old son’s mother died, the court appointed Marcus Owens as conservator. His child received a total of $126,078.77 in life insurance proceeds and $1,800 per month in social security survivor benefits. Owen’s ignored the court’s instructions requiring that he receive a written order before withdrawing funds and withdrew $44,000 from the life insurance proceeds held in a restricted account. Owens used the funds to pay tuition and fees for private schooling, childcare, vacations to visit family, dental procedures and organized sports for his son.
Under Michigan law, a conservator MAY use estate income for the support, education, care or benefit of the protected individual BUT the conservator cannot PERSONALLY benefit from the funds. The court found that the social security survivor benefit funds combined with Owen’s annual income of more than $50,000 was more than enough to support and care for the young child. As a result, Owens’ withdrawal of the life insurance proceeds was a prohibited personal benefit and he had to repay the funds.
It is imperative that you understand the law when you have been appointed to manage someone else’s finances. Otherwise, you may find yourself in a situation like this one- losing your appointment and replacing the funds! Don’t let this be you! Questions about conservatorship and the rules that govern it? Contact C&G today!
Click here to read the case!
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