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A Better Partnership
February 21, 2013

COA Opinion: Petition for declaration of probable cause did not trigger a trust's terror clause

In In Re Miller Osborne Perry Trust, a Trust featured a 'terror clause' which forfeited the benefits of any beneficiary who challenged the admission of the Trust to probate or any of the Trust's provisions. Upon the death of the settlor, a beneficiary petitioned the probate court for declaratory relief, seeking to determine whether he had 'probable cause' to challenge amendments to the Trust, which would render the terror clause unenforceable under MCL 700.7113. The beneficiary explicitly stated that he was not actually challenging the Trust, but merely seeking a determination on the existence of probable cause if he were to take such an action. The Trustee asked the probate court to find that the petitioner-beneficiary's request for declaratory relief itself triggered the terror clause. The probate court found no probable cause for challenging the trust, but also found that the petition did not implicate the terror clause.

The Michigan Court of Appeals noted in dicta that Mark Perry probably failed to allege a justiciable controversy by explicitly not challenging the trust. However, the lower court's authority to make a probable cause determination was not at issue on appeal. The Court affirmed that the beneficiary's petition did not trigger the terror clause, as by its own terms it did not actually challenge the Trust.

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