At the time of decedent’s death in December 2018, she and respondent had been married for 25 years. Apparently unbeknownst to respondent, decedent created a will and trust in 2007. Decedent named her sister, petitioner, as trustee.
The trust agreement provided that if respondent survived decedent, decedent’s personal effects would be allocated to the respondent’s Trust. Decedent intended for respondent to have the ability to use decedent’s assets, including her home, travel trailer, and other land, and that the assets be protected from respondent’s creditors. Following respondent’s death, the assets would be distributed to decedent’s nieces and nephews, including petitioner’s children. The trust agreement also included an Incontestability Provision, which provided that any person who challenged decedent’s estate or trust agreement would be disinherited.
After decedent’s death, respondent filed an objection to inventory and explained that decedent owned their marital home before they were married, but that they lived there together for their 25-year marriage and he and decedent doubled the size of the home during their marriage, using both of their money. Respondent asserted that he did not know that decedent deeded the home and vacant land to her trust in 2007.
In response, petitioner filed a petition to register the trust and disinherit respondent in accordance with the Incontestability Provision. Petitioner later moved for summary disposition pursuant to MCR 2.116(C)(9) and (10).
A settlor’s intent is to be carried out as nearly as possible. Generally, in terrorem clauses are valid and enforceable. However, a provision in a trust that purports to penalize an interested person for contesting the trust or instituting another proceeding relating to the trust shall not be given effect if probable cause exists for instituting a proceeding contesting the trust or another proceeding relating to the trust.
Probable cause exists when, at the time of instituting the proceeding, there was evidence that would lead a reasonable person, properly informed and advised, to conclude that there was a substantial likelihood that the challenge would be successful.
The probate court cannot grant petitioner’s motion for summary disposition under MCR 2.116(C)(10) because respondent established a genuine issue of material fact about that claim.
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