Contest a Trust
When a loved one passes, family disputes over the decedent’s estate can emerge unexpectedly.
Although it generally is preferable to resolve such conflicts outside of the courtroom, litigation is sometimes necessary.The experienced Oakland County, Michigan, probate and trusts attorneys at Collens Estate Law, can work toward conflict resolution for your family outside of litigation but can also provide skilled representation in probate court if the matter advances to trial.
At Collens Estate Law, we know that trust litigation not only is difficult for clients but can be expensive. As a result, our skilled trial lawyers are dedicated to achieving clients’ desired outcomes in an efficient and effective fashion. We provide assertive, timely representation to protect the rights and interests of our clients and the value of the trust assets.
Call an Oakland County trust litigation lawyer at our firm at (248) 545-2500 to learn how we can help you. We serve the entire Detroit metro area.
Trusts have become increasingly popular estate planning tools in Michigan. These legal vehicles are preferred for their privacy benefits and avoidance of probate processes. A Trust, like a will, can be contested in certain situations. It is important for you to know the specific requirements and procedures and rights provided to beneficiaries who suspect problems with a trust’s validity as well as for trustees defending against such challenges.
The determination of what is the best estate planning document for you is a really is a personal decision.
Let me say that again, the decision about what kind of estate planning documents you need for your personal situation is just that it’s a personal tailoring of tools to need so it’s not one size fits all figuring out what kind of assets you’re the state consists of your family structure, your end goals about management and distribution of those assets, that all factors, into what kind of estate, planning tools we should employ to meet those current and future needs.
If a person has a revocable trust that they’ve set up during their lifetime, then one of the primary benefits of having that trust is, if the person grows incapacitated during their lifetime, then there’s a process to manage and administer those assets without having to go to court generally and then also, at the person’s death, to be able to administer without having to go to the Probate Court. It’s 1 of the main features of why people set up revocable trusts.
Unlike will contests, which occur during probate court proceedings, trust contests typically originate when beneficiaries or heirs believe the trust document does not accurately reflect the grantor’s true intentions due to improper influence, lack of capacity, or other legal issues.
The Michigan Trust Code (MTC), enacted as part of the Michigan Estates and Protected Individuals Code (EPIC) governs these disputes.
In Michigan, trust contests can target: The entire trust document Specific amendments and changes to the trust Particular provisions within the trust The transfer of assets into or out of the trust
These challenges are different from claims against trustees for breach of fiduciary duty. (A trustee’s legal responsibility to act in beneficiaries’ best interests.) Such claims acknowledge the trust’s validity but question the trustee’s administration.
A trust is a 3rd party entity. It’s not you individually, it’s not your spouse, it’s not you together. It’s this 3rd party entity, it’s a contract, a legal document, right? That says certain things in it that give certain outcomes a trust will describe. Who’s to manage it? Who the trustee is going to be? It describes what’s to happen with the assets while the person is alive and alive and incapacitated, and then, after death, what’s supposed to happen? What the distribution is going to look like after death?
Michigan law establishes specific standing requirements for trust contests.
These requirements are often more restrictive than requirements for will contests. An “interested person” must have a property right in or claim against the trust that may be affected by the proceeding.
Beneficiaries who are – or were – directly named in the current or previous versions of the trust generally have standing to bring challenges in Michigan courts. Their standing derives from their direct financial interest in the trust’s assets – even if that interest is contingent or subject to trustee discretion.
Persons who would otherwise inherit under Michigan’s intestacy laws provided the trust were deemed invalid—may have standing to challenge the entire trust instrument. Their standing depends on demonstrating that they would receive more through intestate succession than under the terms of the trust.
Prior beneficiaries whose interests were reduced or eliminated by trust amendments have standing to contest those specific changes. Michigan courts have recognized that beneficiaries whose interests were diminished by amendments have standing. This standing is limited to contesting those specific amendments.
Trustees may have standing in some circumstances under Michigan law. However, their standing is limited to challenging provisions that directly impact their ability to fulfill their fiduciary obligations. This is particularly true when contesting amendments that dramatically alter their powers or create undue administrative burdens.
Michigan may recognize a creditor’s standing if transfers to the trust are suspected of being transacted fraudulently. The Michigan Uniform Voidable Transactions Act provides remedies for creditors when assets were placed in trust to hinder, delay, or defraud legitimate creditors.
Courts require a contestant to show a direct financial interest that would be advanced on their behalf if the trust contest should succeed. An expectation of inheritance, disappointment with the grantor’s choices, or moral objections to the distribution are insufficient to establish standing regardless of how compelling and substantive the grounds might be.
The Michigan law firm of Collens Estate Law, has extensive experience representing beneficiaries and executors in a wide range of trust litigation matters, including the following:
When a loved one dies, it is important to seek legal advice from a lawyer you can trust. Collens Estate Law, provides compassionate assistance to resolve your case to your satisfaction. We can help you deal with matters concerning trust administration, or a contested trust. Whether you are administering a trust or seeking to challenge a trust, we can help you be efficient and effective and preserve the trust.
To learn more about Contested Trust and how we can assist you, call Collens Estate Law, at (248) 927-2199 or contact us online.
Michigan courts generally presume trusts were created with validity and truly represent the grantor’s intentions.
To overcome this presumption, contestants must provide clear and convincing evidence to the court so support one or more recognized legal grounds:
For a trust to be valid in Michigan, the grantor must have possessed sufficient mental capacity when creating or amending it. Michigan courts have established in cases like In re Mardigian Estate that capacity to create a trust requires the grantor to: Understand the value, nature, and extent of their property Identify their natural beneficiaries (legitimate heirs) Clearly understand the distribution plan they are making Understand the cohesiveness of the trust’s plan as a whole
Michigan courts apply a standard similar to contractual capacity for trust creation, which is higher than the testamentary capacity required for wills. Proving incapacity for trust creation often requires much stronger evidence than for will contests.
Evidence in Michigan trust capacity cases will include the review of medical records documenting cognitive impairment, physician testimony, observations from family members and advisors, and sometimes neuropsychological evaluations if available.
Michigan courts have developed numerous measures and standards specifically to address undue influence that apply to both wills and trusts. Michigan law presumes undue influence when evidence establishes: A fiduciary or confidential relationship existed between the grantor and another person That person or another closely associated with them benefited from the trust That person had an opportunity to influence the grantor’s decisions
Once this presumption is established, the burden shifts to the trust’s defenders to demonstrate the absence of undue influence. (A significant procedural advantage for contestants in Michigan courts.)
Michigan courts look for several indicators of undue influence, including isolation of the grantor from family and advisors, involvement of the influencing person in arranging for trust preparations, dramatic changes to long-standing estate plans, and signs that the grantor was dependent on the alleged influencing person.
Michigan recognizes fraud as a basis for invalidating trusts. Under Michigan law, fraud can involve: Fraudulent inducement: The grantor was intentionally misled about facts that influenced their trust decisions Fraud in the execution: The grantor was deceived about the nature or content of the documents they were signing
In Michigan, proving fraud requires clear and convincing evidence of intentional misrepresentation of material facts, reliance on those misrepresentations by the grantor, and resultant harm to the claimant’s interests.
Legal formation of a trust must meet very specific requirements in order to be deemed valid. A trust is created only if: The settlor has capacity and indicates an intention to create a trust The trust has a definite beneficiary (with some exceptions) The trustee has duties to perform The same person is not the sole trustee and sole beneficiary
Additional technical requirements apply to written trusts under Michigan law, creating potential avenues to disputes if these components are missing or defective.
Michigan recognizes the doctrine of substantial compliance for trusts as well as wills, allowing courts to disregard minor procedural and technical flaws if the grantor’s intent is clear. This does not however extend to the fundamental requirements of a trust’s formation.
When clients approach our law firm after the death of their loved one and their loved one has set up a trust during their lifetime, the administration is going to feel similar to what it would be like through the probate process.
But it is distinct in that, generally speaking, trust administration doesn’t require probate court involvement. That’s one of the primary features of having trust.
If a person has set up a trust and has properly funded the trust, then the administration is going to require the trustee who’s nominated in the trust to gather those assets together, prepare an inventory, and provide that information out to those qualified trust beneficiaries who are entitled to it, give notice to creditors that the estate exists, deal with taxes, and then make distribution. That process, generally speaking, doesn’t require any court involvement at all.
While technically not a trust contest, Michigan law creates comprehensive remedies for trustee misconduct that often accompany validity challenges. These Michigan-specific provisions address: Self-dealing or conflicts of interest Mismanagement of trust assets Failure to provide required accountings or information to beneficiaries Improper distributions or favoritism Excessive compensation or fees
These claims seek remedies like trustee removal, surcharge (financial responsibility), or specific performance rather than invalidation of the trust itself.
You Must Act Quickly If you believe that the trust of your family member has been administered incorrectly or that a family member’s trust was drafted improperly, your timely action could protect the at-risk assets of the trust.
Michigan imposes strict deadlines for trust contests.
Challenges to the validity of a trust must be brought within the earlier of two years after the settlor’s death or six months after the trustee sent the potential contestant a copy of the trust instrument and a notice informing them of the trust’s existence, the trustee’s name and address, and the time allowed for commencing a proceeding.
For revocable trusts that become irrevocable due to the settlor’s incapacity rather than death, the two-year period begins when the trust becomes irrevocable.
These Michigan-specific deadlines create a mechanism for trustees to limit their exposure by providing notice to potential contestants. Once proper notice is given, the six-month window begins running regardless of other factors.
Limited exceptions exist under Michigan law for fraud or concealment. If someone concealed the existence of a trust or potential grounds for contest, Michigan courts may extend deadlines, but the contestant must still act within a reasonable time after discovering the relevant facts.
Collens Estate Law, is experienced in all aspects of trust litigation. We give sound advice regarding the integrity of the trust administration. If clients have a valid complaint, we will provide assertive and timely representation to secure their rights and interests, and protect the value of the trust assets.
A good trust litigation lawyer will understand the sensitivity of the situation, yet will employ an assertive approach to litigation pursuant to each client’s unique circumstances. Collens Estate Law, represents individuals in trust contests and breach of fiduciary duty cases.
Questions? Contact Collens Estate Law, to schedule a consultation with our estate litigation lawyer.
Our lawyers can act quickly to protect your rights and ensure the integrity of the estate. Contact us today to discuss your case by calling (248) 545-2500.