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Wills and Trusts

Originally posted on: 02/14/2014

A will and trust document is front and center with legal notes beside it.Aldrich Legal Service provides legal advice and representation for residents in Plymouth, Ann Arbor, and Southeast Michigan. We also review recent legal cases to examine what took place and what we can learn from them.

Keep reading to review a case with us on wills and trusts

The Will and Trust Case in General

The Michigan Court of Appeals held, among other things, that the respondent-Trustee breached his fiduciary duties by failing to administer the RS Trust and the DS Trust in accordance with their terms when he conditioned distribution to some beneficiaries on the signing of a release and indemnification in his favor "because neither trust provided for such conditions on distributions." It also held that the probate court clearly erred in finding that some of the breaches of fiduciary duties alleged by the petitioners-beneficiaries did not cause them harm.

Exploring the Opinions of the Case

Thus, the court reversed part B of the probate court's opinion and directed the probate court on remand to determine the appropriate remedy for these breaches pursuant to MCL 700.7901 and MCL 700.7902.

The case involved three trusts. Petitioners filed a petition to remove the trustee, for surcharge of the trustee, trust supervision, and appointment of a successor trustee, alleging that respondent breached various fiduciary duties owed to petitioners that resulted in damages.

On appeal, petitioners argued that respondent breached various fiduciary duties, and the probate court clearly erred in concluding that the only breach of a fiduciary duty that occurred was when respondent attempted to sell a parcel of property known as the River Property. "Nowhere in the probate court's opinion and order did the court find that only one breach of fiduciary duties occurred."

The Probate Court's Findings

The probate court found that respondent breached his fiduciary duties when he listed the River Property for sale, and it discussed other alleged breaches - "respondent moving $60,000 out of and back into the trusts' bank account and a mistaken deposit of $9,000 into the trusts' account - and concluded that petitioners and the trusts were not harmed by these incidences."

The probate court took into consideration other alleged breaches of fiduciary duties, and nothing from the language of the order suggested that it concluded there were no other breaches. Rather, it found, "both explicitly and implicitly, that there were no other breaches of fiduciary duties that harmed petitioners and warranted a remedy from the court." However, the court concluded that the respondent breached his fiduciary duty to keep petitioners reasonably informed about the administration of the trust in regard to his intent to begin collecting trustee compensation, and given that the probate court awarded him trustee fees, petitioners were harmed by this breach.

Further, because additional breaches of fiduciary duties existed that were not found by the probate court, the court held that the probate court clearly erred in finding that petitioners' action, aside from the River Property issue, was frivolous. Thus, the court vacated the $59,398 sanction against one of the petitioners. Affirmed in part, reversed in part, vacated in part, and remanded.

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This is just one of the many cases we have reviewed for you. If you need legal representation for criminal defense, divorce, or many other legal needs, consider Aldrich Legal Services. Give us a call today to chat through your situation.

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