Now Accepting New Clients!

WILLS/TRUSTS 18: Probate court erred in concluding that a statute of limitations barred plaintiffs’ claims challenging the Trust.

In this case, Plaintiffs contend that the probate court erred in concluding that a statute of limitations contained in the Michigan Trust Code (MTC), MCL 700.7604, barred plaintiffs’ claims challenging the validity of the Trust.

Plaintiffs are the daughters and defendant is the son of the settlor. Following the death of her husband, in 1995, the settlor settled the Trust. The assets contained in the Trust primarily consisted of real property and a closely held business. The Trust generally provided that the assets would be equally distributed to her children upon her death.

During her lifetime, Settlor was to be the sole trustee of the Trust, and reserved in herself a number of rights and powers as the settlor, including the right to amend, modify, or revoke the Trust, and to designate different trustees or co-trustees at any time to act on Settlor’s behalf. The Trust also provided that, if Settlor was ever incapacitated and her incapacity certified by two doctors, any further actions taken by Settlor with respect to the Trust would be void.

In 2007, a doctor performed a geriatric assessment of Settlor, and in a letter dated April 18, 2007, informed Settlor’s primary care physician that Settlor was experiencing memory loss and needed help with her finances and medications.

One year after the doctor performed his geriatric assessment, on May 6, 2008, he noted on a prescription pad that Settlor was not capable of participating in business affairs.

In 2012, Settlor executed the fifth and final amendment to the Trust. The amendment revoked all previous amendments and reaffirmed that son would receive the voting shares of the business.

Settlor died on May 14, 2014, and her personal representative sent a letter to plaintiffs indicating that Settlor appointed him trustee of the Trust Established on May 12, 2014. Notably, enclosed with the letter were copies of Settlor’s will and the Irrevocable Trust established in 2012, but not a copy of the original trust or any of its amendments.

Plaintiffs requested a declaration that all amendments to the Trust executed after April 2007 were void because Settlor did not have capacity to execute them, and because Settlor was unduly influenced by her son.

The son moved for partial summary disposition pursuant to MCR 2.116(C)(7) and (C)(8), contending that (1) plaintiffs were barred by the statute of limitations, MCL 700.7604, from challenging the validity of the Trust, and (2) plaintiffs lacked standing to bring a conversion claim on behalf of the Trust.

The probate court agreed with the son that plaintiffs’ claim for declaratory relief against the Trust was barred by the statute of limitations, holding that the statute applied to the trust because it was revocable within the meaning of MCL 700.7103(h).

Plaintiffs first contend that their claims against the Trust did not exceed the statutory limitation period because the statute of limitations applies only if a trust is revocable at the time of the settlor’s death, and in this case, the Trust became irrevocable when Esther was incapacitated in 2008.

The statute of limitations at issue, MCL 700.7604, provides as follows:

(1) A person may commence a judicial proceeding to contest the validity of a trust that was revocable at the settlor’s death within the earlier of the following:

(a) Two years after the settlor’s death.

(b) Six months after the trustee sent the person a notice informing the person of the following:

(i) The trust’s existence.

(ii) The date of the trust instrument.

(iii) The date of any amendments known to the trustee.

(iv) A copy of relevant portions of the terms of the trust that describe or affect the person’s interest in the trust, if any.

(v) The settlor’s name.

(vi) The trustee’s name and address.

(vii) The time allowed for commencing a proceeding.

Because the language of the Trust prevails over the statutory definition of revocable, a certified inability on the part of Settlor to manage her own affairs would have rendered the Trust irrevocable. The probate court therefore erred in applying MCL 700.7604 to bar plaintiffs’ challenges to the Trust.

Aldrich Legal Services is pleased to assist you with your estate planning needs.

We draft and review wills, trusts and other estate planning documents to help our clients with their estate objectives. Located in Plymouth, Michigan, we assist clients throughout southeast Michigan.

Contact Aldrich Legal Services

Basic responsibilities of an executor

Originally posted on 01/11/2017 The emotional toils of dealing with the death of a loved one can be considerably difficult. Nevertheless, perseverance is paramount; especially if you are appointed to be an executor to one’s...

What you need to compliment your will

Originally posted on 02/08/2017 Making end-of-life plans usually end with a will, but they shouldn't. Some believe that simply having a will is enough. However, this post will briefly explain how having other estate planning...

The benefits of home health care providers

Originally posted on 03/22/2017 As we get older or suffer an injury, we need a little extra help. Home health care providers or caregivers can provide the assistance needed to handle your or your loved one's health and safety...

What to know about bail conditions

Originally posted on 03/06/2017 If you have been arrested and are being held on the suspicion that you have committed a particular crime, chances are that the only thing you are thinking about is getting out of jail as soon as possible and...

College students and estate planning

Originally posted on 12/16/2016 With college semesters starting up in Michigan, it may not be so easy to get college students to think responsibly. This time can be especially tough with the need of moving back to school and getting...

Three reasons to put a power of attorney in place

Originally posted on 11/08/2016 While no one wants to think of the unfortunate possibility of being incapacitated or of a time when we can't handle our own affairs, this circumstance is a real possibility. If something happens and this...

How to approach parents about estate planning

Originally posted on 12/09/2016 Family forms a strong foundation for many people's first and most intimate community. It is important to strengthen these first relationships so even uncommon questions become natural. For those...

PROBATE 44: Petition for Mental Health Treatment

Michigan’s Mental Health Code governs the civil admission and discharge procedures for a person with a mental illness. Specifically, MCL 330.1434 sets forth the procedure and content requirements for a petition for mental health treatment.

Should you get your criminal record expunged?

Originally posted on 04/12/2017 If you have been convicted of a crime, have served your sentence, and have followed all court recommendations, you should be able to put your past behind you and move on with life. Moving forward is critical...

Choosing the right executor for an estate

Originally posted on 05/28/2017 When people are thinking about planning their estate, they often think about trying to minimize the estate tax, keeping their will updated, and keeping items out of probate court; however, there is another...

Understanding how the Miranda warning works

Originally posted on 11/25/2016 Michigan residents who have seen television police shows or movies involving law enforcement have no doubt watched many dramatic scenes with officers quoting something to the effect of, "You have the...

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