Washtenaw Probate Court. The dispute in this case involves the meaning of the term "then beneficiary" in the Trust. This term defines the party or parties who are entitled to vote on the removal of a trustee and the appointment of a successor trustee. The court held that because the respondent (the decedent's sister) was not currently eligible to receive trust distributions, she was not a "then beneficiary" and thus, was not currently eligible to vote for the removal and appointment of a trustee. She essentially argued that, because she is currently a beneficiary of the trust and was a beneficiary at the time of the decedent's death, she is a "then beneficiary" entitled to vote on the removal and appointment of trustees.
The court found that if 'then beneficiary' is understood to mean 'all beneficiaries,' whether their interests are possessory or not and whether their interests are vested or contingent, then the word 'then' would have no meaning. There would never be a time after the decedent's death when all of the beneficiaries were not 'then beneficiaries.' The word 'then' would be unnecessary.
Because the word "then" deals with time, the Trust's distinction must also be based on time. By the terms of the Trust, beneficiaries are essentially treated one of two ways at any given time. So, plainly construed, the word 'then' distinguishes between two, and only two, classes of beneficiaries-those who are currently receiving trust distributions and those who are not. Because respondent is not currently eligible to receive such distributions, she is not a "then beneficiary" and is therefore not currently eligible to vote for the removal and appointment of a trustee.
MCL 700.8201(2)(c) provides that one of the underlying purposes and policies of the MICHIGAN TRUST CODE is to foster certainty in the law so that settlors of trusts will have confidence that their instructions will be carried out as expressed in the terms of the trust.
In resolving a dispute concerning the meaning of a trust, a court's sole objective is to ascertain and give effect to the intent of the settlor. The intent of the settlor is to be carried out as nearly as possible.
If a trust document is ambiguous, a court may consider the circumstances surrounding the creation of the document and the general rules of construction. The fact that litigants disagree regarding the meaning of a trust, however, does not mean that it is ambiguous.
Probate litigation is complex and requires the attention of experienced and knowledgeable counsel. Given the emotional nature of these disputes and their financial impact on all involved, it is critical that anyone involved in such a dispute retain highly qualified legal counsel.