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WILLS/TRUSTS 31: Petitioner disputes transfers to trust and filed petitions to have the funds and property returned to her.

Decedent created a noncharitable, irrevocable trust (the Trust) to provide for the benefit and welfare of himself and his wife, appellant EC. The trust named respondent as trustee and provided that he would have the sole discretion to distribute any trust income or principal to the beneficiaries. EC was the primary beneficiary, and upon her death, her son, appellant DLC, would become the sole beneficiary. On DLC’s death, if the trust had not been completely distributed, the remainder would be distributed to respondent. Decedent died and the probate court removed respondent from his position as trustee to avoid a conflict of interest.

Bank/Real Estate Transfers

During the decedent’s life and after the Trust’s creation, funds from two jointly held PNC bank accounts were transferred into the Trust. Additionally, EC met with the decedent’s lawyer and signed deeds transferring real property into the Trust. EC disputes these transfers and filed petitions to have the funds and property returned to her, arguing that she did not understand what she was doing when she transferred the real property and that respondent improperly transferred the PNC accounts for his own benefit.

Probate Court

The probate court found that there was a genuine issue of material fact regarding whether the decedent desired that the funds to pass to EC upon his death or whether he desired for those funds to be placed within the Trust and paid out to EC to care for her after his death. Additionally, after an evidentiary hearing held on the same day, the trial court found that EC had failed to show that the transfers—of real property and the funds in the PNC accounts—should be voided, so it denied the petition to return real property and the petition to return the funds from the PNC accounts.

Undue Influence or Interference

The court found no basis to void the transfers based on EC’s evidence. Based on her testimony, the probate court had evidence to support the finding that EC did know what she had signed and the effects of it but simply did not remember. There was no evidence of undue influence or interference from others, and there is no indication that respondent was present or involved to exert undue influence. Furthermore, petitioner’s poor memory and testimony supported the finding that petitioner did not meet her burden to show why the transfers should be voided.

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Trusts are one of the most used estate planning documents and can serve a variety of purposes. Different types of trusts may be used to protect assets, minimize probate costs, minimize exposure to estate taxes and achieve other significant benefits. We draft a variety of trusts to help our clients with their estate objectives.

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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.

PROBATE 53: The trust agreement included an Incontestability Provision.

A settlor’s intent is to be carried out as nearly as possible. Generally, in terrorem clauses are valid and enforceable. However, a provision in a trust that purports to penalize an interested person for contesting the trust or instituting another proceeding relating to the trust shall not be given effect if probable cause exists for instituting a proceeding contesting the trust or another proceeding relating to the trust.

FAMILY LAW 82: Court stated it would terminate the personal protection order (PPO) after the parties present documentation of the initiation of the divorce proceedings.

However, the trial court concluded that these matters should, in fact, be in the province and the jurisdiction of the Family Division and in that respect, having issued a personal protection order, the Court stated it would terminate the personal protection order after the parties present documentation of the initiation of the divorce proceedings.

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