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PROBATE 54: The probate court removed the current bank as trustee because the Trust could not afford the fees.

The Special Needs Trust was established for the benefit of LBG. The Trust was funded with the proceeds of a settlement obtained for LBG’s benefit as a result of injuries he sustained at the hospital in the days after his birth. The sole purpose of the Trust is to provide for LBG’s lifelong care. The bank was selected by LBG’s family to serve as the trustee.

Annual Accounting of Trust

The probate court approved the 6th through 10th annual accounts without issue. However, at the hearing on the petition to approve the 11th annual account, the probate court raised questions concerning the attorney fees and fiduciary fees that the bank charged to the Trust. The accounting indicated that the trust had gained $29,892.78 in income, had incurred $41,313.19 in expenses, and had a remaining balance of $810,995.85. The court was concerned that the attorney fees of $1,117 and the fiduciary fees of $15,511.53 seemed high in relation to the size of the Trust.

The court stated that it would approve the accounting but cautioned that it would be keeping a close eye on the matter. The court added that it had experience with cases where large institutions abused trust funds.

On April 13, 2020, the bank filed its 12th annual petition to allow accounts. The accounting indicated that the Trust had gained $55,507.94, had incurred $97,933.80 in expenses, and had a remaining balance of $768,569.99. This time the attorney fees and costs were $6,3554.63 and the fiduciary fees and expenses were $14,955.50. At the hearing on the petition, the court asked what the bank did for Fifteen Thousand Dollars. The bank’s lawyer stated that the bank provided a myriad of services.

Guardian Ad Litem (GAL)

The court suggested that Bank was using the Trust’s money to invest in its own products. The court appointed a guardian ad litem (GAL) to offer an opinion on the reasonableness of the fees charged by the banks, by the lawyers, and the distribution of money. On October 19, 2020, the GAL submitted a report to the court. The court questioned whether the fees, which were standard for the bank, were reasonable for the Trust. The Court reiterated its concern that this particular Trust cannot afford the bank as a trustee.

Removal of Trustee

On March 19, 2021, the court entered an order allowing the 12th annual account, removing the bank from its role as trustee, and appointing a new fiduciary to serve as successor trustee.

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MICHIGAN WILLS/TRUSTS 33: Trustees required to provide notice informing recipients that they may challenge the validity of a trust and the period allowed for bringing such a challenge.

The notice sent clearly advised her that if she wanted to contest the validity of the Trust in a judicial proceeding, the law required her to do so within six months from the date of the letter. Nothing in the statute requires a trustee to inform the recipients of the specific legal consequences of not acting during the time allowed.

MICHIGAN REAL ESTATE 97: The court imposed a constructive trust on defendant’s one-half interest in the property in favor of plaintiff.

The trial court found that plaintiff sustained her burden of establishing that a constructive trust was necessary to prevent defendant from being unjustly enriched. Accordingly, the court imposed a constructive trust on defendant’s one-half interest in the property in favor of plaintiff and ordered defendant to convey his interest in the property to plaintiff.

MICHIGAN REAL ESTATE 95: Property owners did not place a condition upon the delivery of the deed; rather, they delivered the deed to themselves.

When the delivery of a deed is contingent upon the happening of some future event, title to the subject property will not transfer to the grantee until the event has occurred. However, in this case A and J did not place a condition upon the delivery of the deed; rather, they delivered the deed to themselves, then deposited the deed with their attorney with the instruction to record the deed only upon the happening of a future event, thereby placing a condition only upon the recording of the deed.

MICHIGAN PROBATE 57: Brother granted permanent guardianship of siblings.

At a multiday hearing to address the extension of the guardianship, the eldest children, the mother’s relatives and friends, and school personnel testified regarding the mother’s care of the children, appellant’s treatment of and interaction with the children, and the eldest siblings’ role in aiding the mother to raise the children.

FAMILY LAW 88: The trial court found that the children did not have an established custodial environment with defendant because, before the separation, he did not have a large role in the children’s lives.

The trial court credited plaintiff’s testimony that, before the parties’ separation, defendant spent minimal time helping to care for the children, so its finding that the children would not have looked to defendant for guidance, discipline, the necessities of life, and parental comfort during that time was not against the great weight of the evidence.

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