Now Accepting New Clients!

Property owned as tenants by entireties does not become an asset of the estate when spouse dies

The court held that the value of the marital home was not to be deducted from the Marital Trust at issue because it did not "pass" from decedent to the respondent given that they owned the property as tenants by the entireties. Further, the trial court did not err by ruling that respondent was entitled to her exempt property allowance. Thus, the court affirmed the trial court's rulings in this case involving the construction of a trust. Upon the decedent's death, his living, revocable trust became irrevocable and was divided into two separate trusts, the Marital Trust and the Family Trust. Article 8 of the trust instrument governed the manner in which funds were to be allocated between these trusts. Petitioner was the decedent's daughter. Respondent was the decedent's surviving spouse. At the time of decedent's death, he and respondent owned the home as tenants by the entireties. When he died, "respondent became the sole owner of the home by right of survivorship. Nearly one year later, the acting trustee filed a petition for clarification, asserting that '[b]y not changing the title and funding of the Trust with the Residence, the value of the Residence becomes an issue.'" Thus, petitioner asked the trial court for clarification as to whether the value of the home should be included in the creation of the Marital Trust and whether the value of the home reduced the value of the Marital Trust. The court noted that because respondent and the decedent "owned their home as tenants by the entireties, respondent was a full owner of the property before and after her husband's death. When decedent died, respondent became the sole owner automatically, not because the property 'passed' as part of the estate. The property never was part of the estate." Further, because the trust instrument language "was clear and unambiguous," the trial court did not err by denying petitioner's request for an evidentiary hearing. Petitioner also argued that "respondent was not entitled to her exempt property allowance because she failed to file a claim with the estate within four months of decedent's death." While petitioner cited MCL 700.7605(1) and MCL 700.7606(1), neither provision applied to the trust here. Further, the trial court correctly construed the trust instrument language, which clearly provided that exempt property, such as a property allowance, was not subject to Article 8, § 1.

Don't let a bad decision, unfair contract, or a messy divorce get in the way of a promising future!
Contact the experienced team at Aldrich Legal Services today to schedule your free initial
and secure reliable and trustworthy representation today!
Get the Help You Need From a Team You Can Truly Count On: (734) 404-3000