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Court Rules Memo Complies with Trust Amendment Process
The Trust contains the following provisions pertinent to this case:
The Settlor may desire to prepare a written statement or list, either entirely in his handwriting or just signed by him, to dispose of tangible personal property to a specific person or person[s] in the future. If the list does not qualify as an amendment, I hope those entitled to my estate will respect it.
The Trust Fund’s real and personal residue shall be distributed as follows: 1) The Settlor’s sister shall receive fifty percent (50%) of the total trust residue. 2) Each of the following grandchildren of the Settlor shall receive ten percent (10%) of the total residue.
I reserve the right to amend or revoke this Agreement, wholly or partly, in writing, signed by me or on my behalf, and delivered to the Trustee during my lifetime.
Understanding Trust Amendments
A trust amendment is a legal document that modifies the terms of an existing trust. Specifically, it is used to make changes to a revocable living trust, which is a type of trust that can be altered or terminated during the grantor’s lifetime. Trust amendments are a crucial component of estate planning, as they allow individuals to update their trusts to reflect changes in their circumstances, wishes, or applicable laws. Grantors can use a trust amendment to ensure their living trust remains current and accurately represents their estate planning objectives.
Trust Amendment
A document (Memo) purported to be a subsequent amendment form is central to this issue. After the Settler’s death, the petitioner provided the respondent with a binder containing the Trust and other documents. The petitioner also brought the respondent either an original or a copy of the Memo along with documentation regarding a vacation timeshare referenced in the Memo.
The respondent testified that she photocopied the Memo and returned it to the petitioner. The petitioner disputed the respondent’s version of events, attesting in an affidavit that the original signed Memo was located in the binder.
The Memo begins in typewriting: Certain personal effects have special meaning; I desire that these items be given to those indicated upon my death. Below this preface are spaces for listings of Description of personal property and desired recipient and relationship. Filled in, in handwriting, on the Memo are my vehicle, home, 4880 Westland, and $50,000 – cash minimum, as personal property to be distributed to the petitioner. The Memo reflects that Settlor signed it. Beneath that signature is another handwritten entry, vacation timeshare, and personal property to be distributed to the petitioner, beneath which another signature of Settlor appears. While the parties agree that the signatures and handwriting on the Memo are Settlor’s, the respondent claims that neither she nor anyone else she knew had any discussion with Settlor regarding the Memo or the property’s disposition.
Petition for Summary Disposition
The petitioner filed a petition with the probate court to determine the validity of a trust amendment form, claiming that the respondent had refused to honor the Memo as a valid amendment to the Trust. Petitioner moved for summary disposition under MCR 2.116(C)(10), arguing that no genuine issue of material fact existed regarding whether the Memo was a valid trust amendment that required the respondent to distribute a minimum of $50,000 from the Trust to the petitioner.
Court Hearing
The probate court rejected the respondent’s argument that it could be inferred that Settlor had destroyed the original Memo. The probate court determined that the petitioner had carried her burden to present evidence that the original Memo existed at the time of Settlor’s death in the form of the petitioner’s affidavit stating that she had given the original Memo to the respondent within a binder of Settlor’s estate planning documents. Further, the probate court found that the respondent had failed to provide evidence refuting the petitioner’s claim because the respondent’s testimony that she had received either an original or a copy of the Memo separate from the binder and copied and returned it did not contradict the petitioner’s evidence regarding the trust documents.
The probate court also found that the Memorandum substantially complied with the Trust’s method for amendment, as required by statute, and that it was not merely an attempt to distribute personal property. The court granted the petitioner’s motion for summary disposition, confirming the validity of the Memorandum as a trust amendment.
Benefits and Considerations
There are several benefits to using a trust amendment. One primary advantage is that it allows individuals to make changes to their trusts without creating an entirely new trust document. This can save time and money and reduce the complexity of the estate planning process. Additionally, trust amendments help ensure that the trust remains valid and effective, even if the grantor’s circumstances change.
However, there are essential considerations to consider when using a trust amendment. The amendment must comply with the requirements outlined in the original trust document and be properly executed and notarized. Depending on the jurisdiction, the amendment may need to be filed with the court or other relevant authorities. Ensuring compliance with these requirements is essential to maintaining the integrity and enforceability of the trust.
Costs and Eligibility
The cost of a trust amendment can vary depending on the complexity of the changes and the jurisdiction. Generally, it is lower than the cost of creating a new trust document. However, the expense can still be significant, especially if the changes are complex or require the assistance of an estate planning attorney.
To be eligible to make a trust amendment, the grantor must have legal capacity, and the original trust document must permit amendments. The grantor must also comply with the requirements outlined in the original trust document and adhere to state laws. Consulting with an estate planning attorney can help ensure all legal requirements are met, and the amendment is executed correctly.
Assistance with Estate Planning
Aldrich Legal Services is pleased to assist you with your estate planning needs. We draft and review wills, trusts, and other estate-planning documents to help our clients achieve their estate objectives. Located in Plymouth, Michigan, we serve clients throughout southeast Michigan.
Conclusion
In conclusion, trust amendments are essential to estate planning, allowing individuals to update their trusts to reflect changes in their circumstances, wishes, or laws. While there are numerous benefits to using a trust amendment, such as cost and time savings, there are also important considerations to keep in mind. The process can be complex, and the price can be substantial. Therefore, it is recommended that individuals seek the assistance of an estate planning attorney to ensure that their trust amendments are properly executed and comply with all relevant laws and regulations.
