Serving as a personal representative or trustee is an honor, and a legal minefield. Michigan law imposes fiduciary duties on anyone who administers an estate or trust, and those duties come with teeth. Make the wrong call, and you’re not just inconveniencing beneficiaries. You’re exposing yourself to personal liability, meaning your own assets are on the line.

Most people who accept these roles have good intentions. They’re family members who want to do right by a loved one’s wishes. But good intentions don’t protect you when a beneficiary files a petition for surcharge, the IRS sends a notice of deficiency, or a creditor comes after you personally because you distributed assets too soon.

Here are the eight most common mistakes we see Michigan fiduciaries make, and why each one can cost you far more than you’d expect.

Mistake 1: Delaying the Start of Administration

Procrastination is the single most expensive mistake fiduciaries make. Every week you wait after a loved one passes, the risks compound. Bills go unpaid. Insurance policies lapse. Investment accounts drift without oversight. Mail piles up, and with it, critical deadlines.

For personal representatives, delay means creditors may not get proper notice, assets may lose value, and the probate court may question your fitness to serve. For trustees, the clock starts ticking the moment you accept trusteeship, and under MCL 700.7814, you have 63 days to notify qualified beneficiaries of the trust’s existence, your identity as trustee, and their right to request a copy of the trust terms.

Miss that window, and you’ve already breached a statutory duty before you’ve made a single distribution.

The bottom line: administration doesn’t wait until you’re emotionally ready. It starts now.

Mistake 2: Missing Required Notices

Michigan law requires specific notices at specific times, and skipping them creates liability that’s nearly impossible to undo.

For trustees, that 63-day beneficiary notice under MCL 700.7814 isn’t optional. It’s a statutory requirement that triggers the beneficiary’s ability to monitor your actions. Fail to send it, and you’ve given every beneficiary a built-in argument that you were hiding something, whether you were or not.

For personal representatives, the requirements stack up quickly. You must publish notice to creditors, which opens a four-month window for claims. You must file an inventory of estate assets. You must notify known creditors directly. Under MCL 700.7608, trustees also have creditor notice obligations that many people overlook entirely.

Each missed notice is a separate breach of duty. Stack a few together, and you’re looking at a removal petition and potential surcharge, meaning the court orders you to pay back losses from your own pocket.

Mistake 3: Paying Creditors in the Wrong Order

Not all debts are equal under Michigan law. When an estate doesn’t have enough assets to pay every creditor in full, there’s a statutory priority order that dictates who gets paid first, administration costs, funeral expenses, taxes, and secured debts before general unsecured claims.

Pay a low-priority creditor before satisfying higher-priority claims, and you’re personally liable for the difference. This isn’t theoretical. It happens when well-meaning personal representatives pay off a sibling’s personal loan from estate funds before addressing the decedent’s final tax obligations or outstanding medical bills.

The IRS is particularly unforgiving here. If you distribute estate assets before satisfying federal tax liabilities, the IRS can, and will, come after you personally under federal transferee liability rules. The estate being “empty” doesn’t protect you.

Mistake 4: Self-Dealing and Conflicts of Interest

This is the mistake that turns family members into defendants. Self-dealing includes buying estate or trust assets for yourself (even at “fair market value”), using estate funds to cover personal expenses, hiring yourself or your business to perform estate services without proper authorization, or making investment decisions that benefit you at the expense of beneficiaries.

Michigan’s fiduciary duty of loyalty requires you to act solely in the interest of the beneficiaries. “Solely” means exactly what it sounds like, there’s no exception for transactions you believe are fair. Without explicit authorization in the trust document, beneficiary consent, or court approval, any transaction that benefits you personally is presumed improper.

The consequences are severe: disgorgement of profits, surcharge for losses, removal as fiduciary, and in extreme cases, civil fraud claims. One executor we’ve seen tried to purchase the family home from the estate at a “discount” without telling the other beneficiaries. That decision cost more in legal fees than the discount was worth.

Mistake 5: Ignoring Tax Filings

The decedent’s tax obligations don’t die with them, they transfer to you. As personal representative or trustee, you’re responsible for filing the decedent’s final Form 1040, the estate or trust income tax return (Form 1041), and, if applicable, the federal estate tax return.

For 2026, trusts and estates hit the top federal income tax bracket of 37% at just $16,000 of taxable income. That’s not a typo. While individuals don’t reach that bracket until hundreds of thousands of dollars, trusts and estates are compressed into it almost immediately. Add the 3.8% Net Investment Income Tax on undistributed investment income above that threshold, and the effective rate approaches 41%.

Missing these filings doesn’t just trigger penalties and interest. It creates personal liability for the fiduciary. The IRS can assess penalties directly against you, not the estate, if you had a duty to file and didn’t.

Mistake 6: Poor Records and Communication

Beneficiaries don’t sue because they got bad news. They sue because they got no news.

Radio silence is the number one catalyst for fiduciary litigation in Michigan. When beneficiaries don’t hear from you, they assume the worst. When they can’t get an accounting, they assume you’re hiding something. When decisions are made without documentation, there’s no way to prove they were reasonable.

Every dollar spent, every investment decision, every distribution, document it. Keep a detailed ledger. Communicate proactively with beneficiaries about timelines, challenges, and progress. You don’t need their permission for every decision, but you do need a paper trail that demonstrates you acted prudently, in good faith, and in their interest.

The fiduciary who keeps meticulous records rarely gets sued. The one who doesn’t keep records rarely wins.

Mistake 7: Improper or Premature Distributions

The urge to distribute quickly is understandable, beneficiaries want their inheritance, and you want to close the matter. But distributing before the creditor claim period expires, before tax liabilities are resolved, or before all assets are properly valued creates enormous personal exposure.

If you distribute estate assets and a legitimate creditor later surfaces, you may be personally responsible for satisfying that claim. If you distribute trust assets and discover an unpaid tax liability, the IRS looks to you, not the beneficiaries who already spent their share.

Michigan law provides clear timelines for creditor claims. Respect them. Wait for tax clearance. Retain reasonable reserves for unexpected obligations. And get receipts from beneficiaries acknowledging what they received. Impatience at the finish line is where careful administration unravels.

Mistake 8: Forgetting Digital and Non-Traditional Assets

Estate planning and administration have evolved, but many fiduciaries still think exclusively in terms of bank accounts, real estate, and investment portfolios. Today’s estates routinely include cryptocurrency wallets, online business accounts, digital storefronts, loyalty and rewards points with real cash value, domain names, social media accounts with monetization, and cloud-stored photos and documents with irreplaceable sentimental value.

Cryptocurrency is especially dangerous to overlook. Without access credentials, digital assets can become permanently inaccessible. And because crypto values fluctuate dramatically, delay in securing these assets can mean significant financial loss to the estate.

If you don’t inventory digital assets early and secure access, you may be breaching your duty to preserve estate property, even if you didn’t know those assets existed. The standard is what a reasonably prudent fiduciary would do, and in 2026, that includes asking about digital holdings.

Your 2026 Fiduciary Checklist: How to Stay Out of Trouble

Use this as a quick self-audit against each mistake above:

• Start immediately — Open the estate or begin trust administration within days, not weeks.
• Send all required notices — 63-day trustee notice, creditor publication, direct creditor notice, inventory filing.
• Know the priority order — Before paying any creditor, confirm you’re following Michigan’s statutory priority of claims.
• Avoid all self-dealing — If a transaction benefits you personally, stop and get legal guidance before proceeding.
• File every tax return — Final 1040, Form 1041, and estate tax return if applicable. Don’t miss deadlines.
• Document everything — Keep a ledger, save receipts, and communicate with beneficiaries proactively.
• Don’t rush distributions — Wait for creditor periods to close and tax clearance before distributing.
• Inventory digital assets — Ask about crypto, online accounts, digital property, and cloud storage from day one.

When in Doubt, Get Guidance Early

The most expensive legal advice is the advice you needed but didn’t get. Every mistake on this list is preventable with proper guidance from the start, and every one of them becomes exponentially more expensive to fix after the fact.

At Boroja, Bernier & Associates, we work with Michigan personal representatives and trustees at every stage of administration, from the first filing to the final distribution. Whether you’ve just been named in a will or trust document, or you’re mid-administration and concerned you may have made a misstep, our probate and trust administration attorneys can help you fulfill your duties, protect yourself from liability, and get the matter closed properly.

Our attorneys help families across Macomb County, Oakland County, Wayne County, and throughout Southeast Michigan, Central Michigan, and Mid-Michigan navigate probate and trust administration with the preparation and accountability your situation demands.

To schedule a consultation with the Michigan probate attorneys at Boroja, Bernier & Associates, call (586) 991-7611 or schedule a consultation online.

Your loved one trusted you with this responsibility. Let us help you get it right – because you deserve better than figuring it out alone.