Blog Viewer

Latest EPIC Q & A

By Phillip E. Harter posted 10-03-2014 16:00

  

The Probate and Estate Planning Section has created an archive of questions and answers (reviewed by a panel of judges, registers, and attorneys) on EPIC and MTC.  If you belong to the Section and want to see the other 800 questions and answers, go to ICLE’s Probate Resource Section Area. If you aren’t a section member, think about signing up through the State Bar.


 

When may a hand-written note constitute an amendment to a trust? (sections 7602(3), 7604 and 7808) 0762

 Question:

 Prior to his death, decedent hand wrote an amendment to his revocable living trust, changing some of the beneficiaries. The note was signed, but undated. Successor trustee followed the directive of the signed, hand written note, which was contrary to the terms of the trust, without seeking court approval in advance. 

 My potential clients, the out of luck beneficiaries, want to challenge the successor trustee's actions. I'd like to help them, but assuming the validity of the note, I see a problem overcoming with MCL 700.7808 (While a trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust). 

 Answer:

 MCL 700.7808 provides: "While the trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust."  This statutory provision applies only to an inconsistent action taken by the trustee while the trust is revocable.  Your potential clients are concerned with actions taken by the trustee after the trust became irrevocable, more specifically, distributions from the trust after the settlor's death in accordance with a hand-written note by the settlor.  Therefore, MCL 700.7808 does not appear to be an issue.

 

The real issue appears to be whether the hand-written note by the settlor may constitute an effective amendment to the trust.  This issue will be governed by the terms of the trust permitting amendments to the trust, MCL 700.7602(3), and the facts as they are determined to exist.

 

The panel notes that MCL 700.7604 may impose a limitation on the potential clients pursuing an action contesting the validity of the trustee's distribution of trust assets in accordance with the hand-written note by the settlor.

 

0 comments
161 views

Permalink