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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.

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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.

REAL ESTATE 89: RM had not included any language in the deed providing that the property was a joint tenancy with full rights of survivorship, the property instead became a tenancy in common.

RM drafted the deed without seeking counsel and mistakenly believed that, if either she or FK died, the property would fully pass to the surviving tenant. FK’s will provided that if his wife predeceased him—which she did—the personal representative of his estate should sell any residual property that he owned and divide the cash proceeds equally among his surviving children.

FAMILY LAW 83: A trial court can terminate a parent’s rights and permit a stepparent to adopt a child.

A trial court has discretion to terminate a parent’s rights and permit a stepparent to adopt a child when the conditions of MCL 710.51(6) are met. MCL 710.51(6)(b) requires the petitioner to establish that the other parent had the ability to visit, contact, or communicate with the children, and substantially failed or neglected to do so for a period of two years.

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