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WILLS/TRUSTS 10: Dispute over the distribution of trust assets.

In this case, the Revocable Living Trust was established in 1997. The Trust Agreement lists the Settlor as the initial trustee, appellant as the first successor trustee, and Settlor’s children as the beneficiaries.

According to the Trust’s General Assignment and Declaration, Settlor transferred, conveyed, and assigned to the Trust all of her right, title and interest in and to all of her personal property, however owned, whether tangible or intangible, now owned or later acquired. That property is to be distributed in accordance with the Trust Agreement, which differentiates between Settlor’s farm assets and non-farm assets.

Any Farm Assets which the Trust owns (if any) shall be distributed, in equal shares, to Settlor’s sons. The Nonfarm Assets shall be distributed to Settlor’s daughters in approximately equal shares, but only in amounts sufficient to assure that each daughter receives a share equal to the shares received by Settlor’s sons. All remaining property shall be shared approximately equally, by all children.

However, it is my desire that each of my daughters receive an amount equal to at least $100,000. To that end, if I have retained any mineral rights on land previously conveyed, including any ongoing oil and gas leases, the income from such leases and any other mineral rights, shall be paid to my daughters until the total amount of such payments, together with the net amounts they receive from this trust, shall be equal to $100,000 for each of my daughters. Thereafter, the income from any ongoing leases is to be shared equally by all my children, and the Trustee shall convey the mineral rights to the property owners.

On the same day Settlor established the Trust she both leased and deeded to her sons the exact farmland described above.  The Farm Real Estate Lease has Settlor, trustee of the Trust, as landlord of the property, and son as joint tenants.  In contrast, the deed makes no mention of the Trust, stating instead that Settlor quit claimed and conveyed the farmland to her sons, excluding all mineral rights, but retained a life estate in the property which included the right of possession and rents.

Settlor subsequently passed away in 2014.  The daughters filed an initial petition for construction, supervision, and addition of assets to the Trust, alleging that the successor trustee of the Trust, excluded the above farmland from the Trust inventory, which drastically reduced the shares they would receive upon distribution.

The Trust and deed as estate planning documents are wholly inconsistent because the removal of $700,000 from the trust gives the boys an enormous windfall and is totally incongruent with the trust addendum which includes the real estate in the trust because it treats each child equally. The language of the trust was written to include the farm property in the dispositive intentions of the Settlor, but the farmland could not be considered a Trust asset at the time of distribution because the property had been deeded to the sons.

The trial court found that both the lease and the legal description of farmland attached to the Trust Agreement are defective because the Trust never owned the property, as evidenced by the quitclaim deed and its recording in April 1998.

A carefully drafted and properly executed estate plan can pass your property to your loved ones in the manner of your choosing and helps ensure that your children and other family members understand your wishes, thus minimizing the risk of disputes and litigation.  Trusts are one of the most commonly used estate planning documents and can serve a variety of purposes.

Aldrich Legal Services has earned its reputation for integrity and trusted service, we are committed to helping individuals and families plan for the future and obtain peace of mind.

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REAL ESTATE 38: Plaintiff fails to make land contract payments.

The land contract stated that T Company sold real property to plaintiff. The land contract further stated that if plaintiff failed to make a monthly payment, T Company could execute the quitclaim deed, thereby terminating plaintiff’s rights to the real property under the land contract.

CONTRACTS 6: Do you understand the clauses in your Purchase Agreement?

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DIVORCE 29: Spousal support in gross is non-modifiable, whereas periodic is subject to modification.

As the name implies, periodic spousal support payments are made on a periodic basis. Periodic spousal support payments are subject to any contingency, such as death or remarriage of a spouse, whereas spousal support in gross is paid as a lump sum or a definite sum to be paid in installments. In addition, one major difference between the two types of spousal support is modifiability. Spousal support in gross is non-modifiable, whereas periodic spousal support is subject to modification pursuant to MCL 555.28.1.

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PROBATE 28: Probate court enters a protective order providing support for a community spouse.

A probate court’s consideration of the couple’s circumstances cannot involve an assumption that the institutionalized spouse should receive 100% free medical care under Medicaid or an assumption that a community spouse is entitled to maintain his or her standard of living. Medicaid is a need-based program, and a Medicaid recipient is obligated to contribute to his or her care.

REAL ESTATE 36: Plaintiff argued that her claim was not time-barred because it did not accrue until the grandmother’s death.

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LITIGATION 6: The terms of the agreement prevails over the course of performance.

The trial court determined that under the UCC, the express terms of the parties’ agreements prevailed over the course of their performance and course of dealing. Although a course of performance may show that parties have waived a specific contractual term under MCL 440.1303(6), the statute does not similarly provide that a course of dealing may demonstrate waiver.

PROBATE 27: Petitioner filed a petition for mental-health treatment.

In support of the allegations, petitioner attached clinical certificates from a physician and a psychiatrist who observed respondent at the hospital. Both doctors diagnosed respondent with bipolar disorder, determined that she displayed a likelihood of injuring herself and that she did not understand the need for treatment, and recommended a course of treatment that consisted of 60 days of hospitalization and 90 days of outpatient care.

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FAMILY LAW 32: Trial court committed error in failing to address whether there was an established custodial environment.

On appeal, plaintiff argues that the trial court failed to make any findings regarding (1) the child’s established custodial environment, (2) the child’s best interests regarding the grant of primary physical custody to defendant, (3) the child’s best interests with respect to parenting time, and (4) the child’s best interests pertaining to the parties’ dispute over daycare.

PROBATE 25: Daughter removed as personal representative of the estate.

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REAL ESTATE 32: Plaintiffs and defendants executed a second easement.

Plaintiffs requested that the trial court, either through reformation of the First Easement or interpretation of the Second Easement, quiet title in favor of plaintiffs and declare them to be the owners of an easement to access Lake Superior through the ravine on defendants’ property, enjoin defendants from interfering with their use of the easement, and order compensation for damages to the stairs.

LITIGATION 4: Plaintiff claimed installation of hardwood flooring breached the condo bylaws.

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FAMILY LAW 30: Discretionary trust assets cannot be reached to satisfy claims for child support and alimony.

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FAMILY LAW 29: Quitclaim deed signed after prenuptial agreement prevails.

The court ruled that title to the land prevails and that once the deed was signed, the property became the undivided whole interest for both the decedent and appellee and became appellee’s property upon the decedent’s death. Consequently, the court concluded that the prenuptial agreement did not have any impact on the property rights of appellee in this case.

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