Let’s say you are the beneficiary of a trust. That trust was established by a relative with whom you were once estranged, but with whom your relationship warmed over the years. In his trust, the relative left you $1,000,000.00. However, your diligent and hardworking lawyers obtained affidavits, testimony and other evidence that this relative fully intended and planned to do much more for you but couldn’t do so before he died. What their investigation uncovered is that this relative intended to amend his trust to leave you over $7,000,000.00.
All hope is not lost, your attorney tells you. The Michigan Trust Code, under certain circumstances, allows a trust to be modified to further the trust maker’s stated purpose or probable intention. The only problem is that the trust has a “no-contest clause.” That clause states that if you challenge or otherwise contest the trust, you lose your inheritance. While you are not challenging or contesting the trust, you want to make sure that what you do will not violate the no-contest clause. So what do you do? Do you gamble with the $1,000,000.00 you are guaranteed, or do you play it safe, knowing that in doing so, you are turning your back not only on millions of dollars, but also on the final wishes of someone who became close to you in his final years?
In these situations, the Trust Code expressly allows a trust beneficiary to file “a request for instructions” and a “declaration of rights that involve a … trust beneficiary.” The Michigan Court Rules have a similar provision. So that’s exactly what you do, and that is just what was done in the case of our client. Unfortunately, the probate court – wrongly, in our opinion – said that seeking to modify the trust would violate the no-contest clause. That decision was appealed to the Court of Appeals which never reached that issue. Instead, they mystifyingly ruled that despite the statute and the court rule, one could not go to the probate court seeking a declaration of rights under a trust. In other words, the Court of Appeals channeled it’s best Clint Eastwood and snarled “Do ya feel lucky? Well do ya?”
Fortunately, the Michigan Supreme Court has taken notice and ordered Kemp Klein and the opposing parties to file briefs addressing whether the Probate Court had jurisdiction to entertain the request for declaratory relief. The ramifications of this decision will be far-reaching and go well beyond our client. This decision will impact anyone who seeks the court’s assistance, pursuant to statute and court rule, in determining their rights under a trust. Depending on what the high court decides, we will either be able to make informed decisions on issues that will meaningfully impact our lives, or we will be left on our own to take our chances.
For further information regarding these matters, please contact Mr. Zawideh at 248.619.2599 or via email.