Blog Viewer

Latest EPIC Q & A

By Phillip E. Harter posted 05-15-2015 09:10

  

Can a beneficiary attack the trust’s validity while serving as successor trustee?
(REF. SECTIONS 7801)

Answer

MCL 700.7801 requires a trustee to administer the trust in good faith, expeditiously, in accordance with its terms and purposes, for the benefit of the trust beneficiaries and in accordance with the Michigan Trust Code. It is generally accepted that a corollary of these obligations is a duty on the part of a trustee to defend the terms of the trust. See Restatement (Third) of Trusts §76 comment d and cited authorities. It is fundamentally inconsistent with this obligation for a person to accept the office of trustee and then seek to challenge the validity of the instrument.

Note, however, that the panel distinguishes a challenge to the validity of a trust from a situation in which an ambiguity exists and a trustee commences a proceeding to construe or interpret the governing instrument. The panel does not view a construction proceeding as a violation of the trustee’s duty to administer the trust in accordance with its terms and to defend the trust.

If the person who has accepted the office of trustee wishes to contest the trust’s validity, the panel believes the individual has no choice but to resign and pursue his or her claim.


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.

0 comments
86 views

Permalink