A recent Michigan Court of Appeals decision has served as a reminder that when it comes to interpreting a trust, clear language regarding your intentions can go a long way in resolving potential disputes and making sure your wishes are fulfilled.
In the appealed case, Elizabeth Vogt created a trust in 2000 that she subsequently amended to add “acting” trustees. When Vogt passed away in 2019, a successor trustee investigated the financial management of the trust.
The successor trustee alleged that the amendment at issue made a certain individual a co-trustee. Further, the successor trustee alleged that the individual in question, as a co-trustee, violated duties to the trust and wrongfully embezzled or converted trust property.
The legal battle hinged on whether the alleged co-trustee was indeed a co-trustee as opposed to a successor trustee. If she was a successor trustee and not a co-trustee, as the trial court found, then the trust explicitly exempted her from liability before she became a successor trustee.
In reversing the trial court, the Court of Appeals referenced case law stating, “[i]n resolving a dispute concerning the meaning of a trust, a court’s sole objective is to ascertain and give effect to the intent of a settlor.”
The Court of Appeals looked to Vogt’s amended trust and determined that the individual in question was, in fact, a co-trustee. As a result, the case was sent back to the trial court for further review regarding the allegations of violation of duty, embezzlement, and conversion.
When it comes to your trust, a clear, comprehensive instrument in plain language is the best way to safeguard your intentions and avoid expensive court battles.
The attorneys at Wright Beamer are ready to assist you with all your trust needs. You can reach us at 248.477.6300.