Prior to his death, and while involved in an out-of-state divorce proceeding with his wife, a man amended a trust agreement to eliminate his wife as a beneficiary. After his death, the divorce action was dismissed. The wife filed suit against the man's child, who was the trustee of the trust that had been modified, claiming that she was entitled to one-half of the $2 million plus in assets in the trust, as that is what she expected to receive under a judgment of divorce.
She brought claims for breach of contract, promissory estoppel, unjust enrichment, constructive trust, reformation of trust, and equitable and declaratory relief. The wife claimed that the husband's amendment of his trust violated both Michigan public policy and a preliminary injunction entered in the out-of-state divorce action.
Warner attorneys, on behalf of the husband's trust, moved for dismissal of all of the wife's claims, based on controlling Michigan statute and common law, contending that:
• She lacked any written proof of an alleged agreement between her and the husband regarding his trust, as required by statute.
• The out-of-state preliminary injunction did not prohibit the parties from amending their estate-planning documents.
• Michigan case law permits one spouse to disinherit another spouse using a revocable, inter vivos trust.
• The husband's beneficiary designations for his ERISA accounts (naming the trust as beneficiary with the wife's consent) were valid and enforceable under ERISA.
The Probate Court granted summary disposition to the Trust on all claims and dismissed the wife's lawsuit. We represented the decedent’s surviving child and Successor Trustee of the Trust. On behalf of the Successor Trustee, we prepared motions for summary disposition on all of the wife’s claims.
The complex issues included: the construction of a stay order entered in the out-of-state divorce proceeding; the enforceability of an interim, since-dismissed out-of-state order in the Michigan litigation; the validity of the wife’s prior consents to the husband designating his Trust as the beneficiary of his retirement accounts subject to ERISA; and the ability of a spouse under Michigan law to disinherit the other spouse via a revocable trust.