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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FAMILY LAW 37: Referee recommended against changing legal custody or parenting time.

Plaintiff requested sole legal custody, arguing that she and defendant had difficulty co-parenting and that defendant would not agree to medical treatment for the diagnosis and treatment of ADHD, need for orthodontic work, and need for vision testing and glasses. Plaintiff also requested an alternating weekly or biweekly schedule during the summer, which would increase her overall parenting time.

REAL ESTATE 40: Tax Tribunal denied petitioner’s claim of a principal residence exemption (PRE).

MCL 211.7cc(2) provides that an owner of property can claim the PRE by filing an affidavit that must state that the property is owned and occupied as a principal residence by that owner of the property on the date that the affidavit is signed and shall state that the owner has not claimed a substantially similar exemption, deduction, or credit on property in another state.

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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?

The trial court granted defendants’ motion for summary disposition, concluding that the claims against the realty companies were barred by the valid release contained in the purchase agreement and that the claims against sellers were required to be resolved in arbitration because they fell within the scope of the arbitration clause in the purchase agreement.

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

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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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