One Court of Justice

In Rottenberg v. Lipsitz (In re Beatrice Rottenberg Living Trust), No. 297984, the Michigan Court of Appeals considered a dispute over a family trust.  Among other claims, the brother, as a trust beneficiary, sued the sister for breach of fiduciary duty to the trust.  The suit related to the sister’s alleged improper acts relating to repayment of certain loans that the father had made to the sister’s businesses.  The successor trustee argued that the brother was not entitled to prosecute his claims because the trustee was the real party in interest.  The Court of Appeals agreed and remanded the matter.  The Court also considered two other procedural questions. Read more »

In In Re Miller Osborne Perry Trust, a Trust featured a “terror clause” which forfeited the benefits of any beneficiary who challenged the admission of the Trust to probate or any of the Trust’s provisions. Upon the death of the settlor, a beneficiary petitioned the probate court for declaratory relief, seeking to determine whether he had “probable cause” to challenge amendments to the Trust, which would render the terror clause unenforceable under MCL 700.7113.   The beneficiary explicitly stated that he was not actually challenging the Trust, but merely seeking a determination on the existence of probable cause if he were to take such an action.  The Trustee asked the probate court to find that the petitioner-beneficiary’s request for declaratory relief itself triggered the terror clause.  The probate court found no probable cause for challenging the trust, but also found that the petition did not implicate the terror clause.

The Michigan Court of Appeals noted in dicta that Mark Perry probably failed to allege a justiciable controversy by explicitly not challenging the trust.  However, the lower court’s authority to make a probable cause determination was not at issue on appeal.  The Court affirmed that the beneficiary’s petition did not trigger the terror clause, as by its own terms it did not actually challenge the Trust.

Years after executing a trust containing her property that was to be conveyed to her children and grandchildren upon her death, the settlor, Stillwell, made several hand-written notes that changed aspects of the trust.  She delivered the notes in a sealed envelope to her grandson with instructions to provide the envelope to the trustee upon her death or incapacitation.  The trust stated that it could be amended in any manner in a written instrument delivered to the trustee.  One of the handwritten notes stated that two of the grandchildren’s college loans were to be paid before any other distributions were made.  The envelope also contained instructions regarding distribution of personal property.  Finally, the notes added the petitioner, Stillwell’s son-in-law, as a beneficiary of the trust.  The Michigan Court of Appeals, in In re Gwendoline Louise Stillwell Trust, affirmed the probate court’s order that the written, unsigned notes properly altered the trust.  Because the trust stated that it could be amended in any manner in writing, and because it was undisputed that the notes were in Stillwell’s handwriting and she was not unduly influenced, it was not necessary that the notes be signed or include the word “amendment.”  But the Court of Appeals reversed the probate court’s determination that a grandchild adopted six days after the grantor’s death was a member of the class of beneficiaries.  Although the trust included future grandchildren in the definition of beneficiaries, the beneficiaries were determined on the date of Stillwell’s death.  Because the adopted child was not a grandchild on the day of Stillwell’s death, she was not a class member and was not entitled to a share in the estate.

In In Re Certified Question (Mattison v Social Security Commissioner), the Michigan Supreme Court considered whether the plaintiff’s twin children, who were conceived via artificial insemination after the death of their father, could inherit from their father under Michigan intestacy law.  The court concluded that children born after the death of a parent who were not in gestation at the time the parent died may not inherit from that parent under Michigan intestacy law. 

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In In re Robert H. Draves Trust, the Michigan Court of Appeals clarified the limitations on probate-court intervention into settlement agreements involving trusts under MCL 700.7111.  That statute governs non-judicial settlement agreements that resolve issues relating to trusts.  The court of appeals determined that a settlement agreement involving trusts made in response to litigation and presented to the court for approval was a judicial settlement.  Therefore, MCL 700.7111 did not apply, and the probate court erred when it set aside the earlier settlement agreement. Read more »

On Friday, May 25, 2012 the Michigan Supreme Court dismissed one case on stipulation of the parties, denied one motion for bypass, and denied two applications for leave to appeal.  The Court also remanded People v. Cortez, Case No. 144302, to the Court of Appeals after vacating the portion of the lower court’s opinion which held that defendant’s Fifth Amendment rights were not violated when police questioned him without providing Miranda warnings.  The Court remanded the matter to the Court of Appeals for reconsideration of this issue in light of the United States Supreme Court’s recent holding in Howe v. Fields, __ U.S. __; 132 S.Ct. 1181 (2012).

Finally, the Court vacated its October 26, 2011 order which had granted application for leave to appeal in In re Mortimore Estate, Case No. 143307. After reviewing the briefing and hearing oral argument from the parties, the Court determined that the questions presented no longer needed to be reviewed.  Mortimore concerns the burden of proof needed to rebut a presumption of undue influence in a will contest proceeding.  The Court of Appeals opinion concluded that the proponent of the will bears the burden of overcoming the presumption of undue influence.  Justice Young, joined by Justices Markman and Mary Beth Kelly, dissented from this May 25, 2012 order.  In the dissent, Justice Young notes that he would have granted the application for leave to appeal and vacated the Court of Appeals opinion clarifying that the burden of proof in an undue influence should rest with the contestant of the will.  Justice Young also wrote that the proponent of the will should only need to introduce “substantial evidence” sufficient to create a question of fact concerning undue influence.  The trier of fact would then consider all of the evidence, and all reasonable inferences flowing from that evidence, to determine if undue influence occurred.

In In re Conservatorship for Kathryn M. Townsend, No. 296358, the Court of Appeals reversed the probate court’s appointment of a conservator over appellant Townsend’s estate, concluding that while it may be appropriate to appoint a conservator for the estate of a “vulnerable adult,” the evidence did not show that Townsend was a “vulnerable adult.”

Townsend’s son petitioned the probate court for appointment of a conservator for the estate, claiming that Townsend had a diminished mental capacity and that the “gratuitous spending” of Townsend’s money by her relatives would leave Townsend destitute.  Townsend admitted to providing her relatives with financial aid and to accumulating large amounts of debt, but her physician testified that she did not suffer dementia and that her mental capacities were above average.  The probate court concluded that appointment of a conservator was appropriate for a “vulnerable adult,” and held that Townsend classified as such.

The Court of Appeals agreed that, under MCL 700.5401, a court may appoint a conservator for a “vulnerable adult.”  Though the statute enumerates eight conditions that would affect an individual’s ability to manage his affairs, those enumerated conditions are preceded by the language “for reasons such as.”  The court concluded that this is a phrase of enlargement, and therefore appointment of a conservator is justified for any circumstance that is “of a similar nature and quality to the eight conditions listed in the statute.”  The definition of “vulnerable adult” found in the Social Welfare Act (SWA) requires mental, physical, or advanced age-related impairment.  Thus, under this definition, the condition is sufficiently similar to the conditions listed in MC 700.5401.  The court determined that appointment of a conservator was proper upon a finding that an individual met the SWA’s definition of “vulnerable adult.”  However, the Court of Appeals reversed the probate court’s appointment of a conservator for Townsend, holding that there was no evidence of mental, physical, or age-related impairment to find that Townsend was a “vulnerable adult.”

In the case of In re Estate of David Gary Lundy, the Court of Appeals held that a security interest perfected under Article 9 of the Uniform Commercial Code, MCL 440.9101 et seq., has priority over all other estate claims made under the Estate and Protected Individuals Code (EPIC). Read more »

On November 23, 2010, the Michigan Court of Appeals published its opinion in In re Nale, No. 293082, the holding that a person convicted of voluntary manslaughter forfeits all benefits from the decedent’s estate under Michigan’s “Slayer Statute”, MCL 700.2803. Read more »

Carlton and his wife Viola had a son and a daughter.  The daughter is the deceased mother of Carlton and Viola’s two granddaughters, Melady and Melinda.  Carlton and Viola executed identical wills, a revocable trust agreement, and an agreement to execute mutual wills, all of which reflected an estate plan to establish a trust for the benefit of Melady for life, with the remainder to the issue of Carlton and Viola.  Viola died first.  Subsequently, Carlton transferred title from assets that had been jointly owned by Carlton and Viola to be titled jointly in his and Melady’s name or to name Melady as beneficiary.  Carlton and Viola’s son and other granddaughter brought this action requesting that the probate court impose a constructive trust on certain assets in Melady and her husband’s control, alleging that Carlton transferred the assets in violation of the agreement to execute mutual wills.  After a hearing, the probate court found that the agreement to execute mutual wills was valid and binding, that nothing in the agreement restricted what the surviving party could do with the the joint assets, and that Carlton’s transfer of assets did not constitute a breach of the agreement.  The probate court granted summary disposition in favor of Melady and her husband, and in a per curiam opinion, In re Estate of Carlton J Leix, No. 291406, the Court of Appeals affirmed.  The Court of Appeals held that there was no implied limitation in an agreement to execute mutual wills that limits the surviving spouse’s ability to transfer assets as he or she pleases.