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WILLS AND TRUST 12: The court was not left with a definite and firm conviction that the probate court erred when it found that Appellant did not establish a persistent failure of Appellee to effectively administer the Trust.

Appellant’s father created the Trust in May 2008. The Trust was amended several times, including in May 2012, when it was declared that the Trust would become irrevocable upon decedent’s death. Decedent died in May 2015, and Appellant was the successor trustee.  In an April 2018 e-mail, Appellant indicated that she was “fine” with having Appellee act as successor trustee. As a result, Appellee executed an acceptance of trust, the probate court terminated Appellant as successor trustee, and Appellee was formally appointed trustee. In April 2019, Appellant petitioned the probate court to vacate Appellee’s appointment as successor trustee. Appellant contended that Appellee had violated his fiduciary duties by being unresponsive to Appellant’s various requests, failing to provide an accounting, failing to act as the contact person for the Trust’s accounts, making a distribution from the wrong account, and by failing to file tax returns. Following the evidentiary hearing, the probate court determined that Appellant had failed to prove that Appellee persistently mismanaged the Trust. The court noted that while Appellee had failed to file a tax return, the Trust’s accountant testified that the failure had not harmed the Trust because it likely did not have any taxable income.

SUCCESSOR TRUSTEE

Appellant argues, for a variety of reasons, that the probate court erred by appointing Appellee as successor trustee and by declining to remove him as trustee. This Court reviews de novo the interpretation and application of a statutory provision. We review a probate court’s findings of fact for clear error and its dispositional rulings for an abuse of discretion. The court abuses its discretion when its decision falls outside the range of reasonable and principled outcomes.  Appellant’s arguments that the probate court applied the wrong statute and legal standards are premised on her position that the court should not have appointed Appellee successor trustee because doing so was inconsistent with the material purposes of the Trust. The probate court ruled that Appellant had not established or even identified the Trust’s material purposes, much less show that appointing Appellee as successor trustee had violated the purposes   Each party has the burden to prove its own cause of action. When a party makes an allegation, the party has the burden to establish that allegation. When deciding Appellant’s petition to remove Appellee as trustee, the probate court stated that “it does not appear, and has not been argued[,] . . . that the material purpose of the trust had been violated nor was it argued that there was a termination or modification of the trust.” Appellant petitioned to vacate Appellee’s appointment as trustee on the basis that the appointment violated the material purposes of the Trust.  Appellant did not provide any evidence or arguments at the evidentiary hearing regarding the material purposes of the Trust. Appellant’s evidence and arguments at the hearing instead related solely to Appellee’s management of the Trust. We conclude that the probate court did not err when it ruled that Appellant had not established the basis of her claims.

Appellant also contends that the probate court should have removed Appellee as trustee because he violated his fiduciary duties by failing to file taxes, failing to respond to Appellant, and undertaking other actions contrary to his duties as trustee. Appellant’s arguments are without merit. At the evidentiary hearing, Appellant only proved that Appellee had failed to file taxes for the Trust. Because the Trust’s accountant testified that the Trust likely did not owe taxes in light of its significant expenses, the probate court’s rulings that the tax-filing failure had not harmed the Trust and that Appellant had not proven persistent failures were not clearly erroneous. Among other reasons, a probate court may remove a trustee when, “[b]ecause of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the purposes of the trust.” MCL 700.7706(2)(c). In this case, the probate court found that Appellant had not provided evidence that Appellee violated the duties of a trustee and that she had failed to present evidence that the Trust had been harmed or that Appellee failed to administer the Trust effectively. The probate court’s findings were not clearly erroneous. The Trust’s accountant testified that he had not received tax documents from Appellee for 2018, but it was fairly common for a trustee not to provide documents in a timely fashion.   We are not left with a definite and firm conviction that the probate court erred when it found that Appellant had not established a persistent failure of Appellee to effectively administer the Trust.

ASSISTANCE WITH WILL AND TRUST ISSUES

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Aldrich Legal Services offers comprehensive guidance throughout the probate process. We offer probate services for clients whose loved ones died with or without a will and trust.

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