I. INTRODUCTION
In Michigan Probate Court appellate decisions, one recurring issue is whether extrinsic evidence (i.e., evidence from outside the estate-planning instrument) was properly admitted or excluded. While the parol evidence rule does impose an absolute bar to the admission of extrinsic evidence in some will or trust cases, relevant extrinsic evidence is readily admissible in other cases. This article will consider the admissibility of extrinsic evidence in will and trust proceedings before the Probate Court.
II. MEANING OF EXTRINSIC EVIDENCE
In a will or trust proceeding, “extrinsic evidence” signifies any evidence derived from a source other than the will or trust agreement itself. Such evidence is extrinsic, or external, or extraneous to the instrument, because it is not contained within the will or trust agreement. “With reference to a contract, deed, will, or any writing, extraneous evidence is such as is not furnished by the document itself, but is derived from outside sources[.]”1 In this context, “extrinsic evidence” is synonymous with “parol evidence”, “extraneous evidence”, and “evidence aliunde.”2 A common example of extrinsic evidence is testimony from the drafting attorney.
III. CONSTRUCTION OF WILLS AND TRUST AGREEMENTS
The question of the admissibility of extrinsic evidence may arise in a proceeding to construe the meaning of a will or trust agreement. A will or trust construction proceeding seeks to determine the meaning of the instrument as written by the testator or settlor, without making any changes to the instrument.
As an initial matter, Michigan recognizes the parol evidence rule, “which prohibits the use of extrinsic evidence to interpret unambiguous language within a document,” but which permits the admission of extrinsic evidence as to the parties’ intent to resolve an ambiguity within the document.3
The parol evidence rule applies to the construction of a will. “[P]arol testimony cannot be resorted to to add to, vary or contradict the language of a will unambiguous on its face. Nor may parol testimony of a testator's intention in making a will be given or properly received.”4 The parol evidence rule also applies to the construction of a trust. “Under the parol evidence rule, if the manifestation of intention of the settlor is integrated in a writing, that is, if a written instrument is adopted by him as the complete expression of his intention, extrinsic evidence, in the absence of fraud, duress, mistake, or other ground for reformation or rescission, is not admissible to contradict or vary it.”5
Michigan common law, including the parol evidence rule, governs the circumstances under which a Probate Court may consider extrinsic evidence in construing a will and/or trust agreement. The same rules of construction apply to both types of instruments. “The rules of construction applicable to wills also apply to the interpretation of trust documents.”6
Confronted with a question as to the meaning of a will or trust agreement, the Court’s primary objective is to carry out the intention of the testator or settlor. “In resolving a dispute concerning the meaning of a will or trust, the court's sole objective is to ascertain and give effect to the intent of the testator or settlor.”7 “A fundamental precept which governs the judicial review of wills is that the intent of the testator is to be carried out as nearly as possible.”8 “The primary goal of the court in construing a will is to effectuate, to the extent consistent with the law, the intent of the testator.”9
Barring any ambiguity, the Court is to determine the testator or settlor’s intent solely from the language of the instrument itself. “[P]arol testimony cannot be resorted to to add to, vary or contradict the language of a will unambiguous on its face.”10 “In determining the intent of the settlor, it is necessary that this Court first look to the expression of the intent in the instrument in question and construe the instrument so that each word contained therein has meaning, if it is possible so to do.”11 “[A] court gives effect to the drafter's intent as indicated in the plain language of the will. The will must be read as a whole and harmonized, if possible, with the intent expressed in the document.”12 “Unless an ambiguity exists, a court should glean the testator's intent from the document itself.”13 “A court may not construe a clear and unambiguous will in such a way as to rewrite it.”14
The Court must construe an unambiguous will or trust agreement solely by reference to its language and without reference to extrinsic evidence. “The law is loath to supplement the language of such documents with extrinsic information. This is especially so in the case of testamentary documents because the maker is not available to provide additional facts or insight.”15 This rule even precludes consideration of the testimony of the drafting attorney. “Testimony of the scrivener of a mistake in drafting a will or of an intention of testator different from that expressed in the will is not admissible, in the absence of ambiguity or mistake appearing upon the face of the will.”16
Only where the will or trust agreement contains an ambiguity may the Court consider evidence from outside the four corners of the document. “[I]f the intent of the testator cannot be gleaned solely by reference to the will because there is an ambiguity, the court may discern the intent of the testator through extrinsic sources.”17 “[W]here there is any obscurity or ambiguity in the language[,] so that the intent of the testator becomes doubtful, it is proper to permit extrinsic evidence to discover the testator's intent.”18 “If ambiguity exists, the court must look outside the document in order to carry out the settlor's intent, and may consider the circumstances surrounding the creation of the document and the general rules of construction.”19
The existence of an ambiguity in an instrument is a question of law. “The determination of whether ambiguity exists in a will is essentially a judicial function.”20 The fact that litigants disagree as to the construction of a will or trust agreement does not prove the existence of an ambiguity. “The mere filing of a bill for construction of a will does not thereby make the will or any of its terms ambiguous any more than does the fact that competing litigants differ in their views as to the proper construction of the language or provisions in a will.”21 The resolution of an ambiguity in an instrument is a question of fact. “[T]he actual interpretation of the ambiguity is a question of fact.”22
The purpose of admitting extrinsic evidence is to ascertain the testator or settlor’s intent. “[W]here [t]he estate plan documents contain internal inconsistencies, extrinsic evidence may be introduced to determine the testator's intent[.]”23 “In resolving an ambiguity in a trust document, the primary goal is to determine and enforce the settlors’ intent as nearly as possible.”24
Admission of extrinsic evidence should be limited to evidence that is relevant to the testator or settlor’s intent. “When admitting extrinsic evidence, it is imperative that courts remember they may not venture beyond construing language in the will in order to discover intent. The use of extrinsic evidence of facts and circumstances is limited to interpreting the words and phrases in the will.”25
There are two types of ambiguities: patent and latent. “An ambiguity is ‘patent’ if the uncertainty as to meaning appears on the face of the instrument, and arises from the defective, obscure, or insensible language used. An ambiguity is ‘latent’ where the language employed is clear and intelligible and suggests but a single meaning, but some extrinsic fact or extraneous evidence creates the possibility of more than one meaning.”26
“Extrinsic evidence is also admissible to prove the existence of a latent ambiguity.”27 “[N]ot only may extrinsic evidence be used to clarify the meaning of a latent ambiguity, but it may be used to demonstrate that an ambiguity exists in the first place and to establish intent.”28 “A latent ambiguity may be proved by facts extrinsic to the testamentary instrument.”29
IV. MODIFICATION OF TRUST AGREEMENTS
The question of the admissibility of extrinsic evidence may arise in a proceeding to modify the terms of a trust agreement. (Michigan law does not apparently recognize a proceeding to modify the terms of a will, except to the extent that the will directs the creation of a trust.)30 A trust modification proceeding seeks to change, or rewrite, the original terms of the trust to address circumstances arising post-execution (e.g., to change the trust terms to take advantage of a change in tax law after the settlor’s death). “‘[M]odification’ involves a change in – a departure from – the true, original terms of the trust.”31 (In contrast, reformation – addressed below – seeks to change the original terms of the trust in order to give effect to the settlor’s intentions as of execution (e.g., to change the trust terms to correct a mistake made in the preparation of the document).)
Until recently, modification of a trust was governed by Michigan common law. As of April 1, 2010, the Michigan Trust Code32 (the “Code”) took effect, and it now governs modification of a trust. The Code sets forth several circumstances under which a Probate Court may modify a trust. Extrinsic evidence may be considered to the extent relevant to the statutory grounds for modification.
Under Section 7411 of the Code, the Probate Court may consider extrinsic evidence, in the form of the consent of the trustee and the qualified trust beneficiaries to a proposed modification. “[A] noncharitable irrevocable trust may be modified … in any of the following ways: (a) By the court upon the consent of the trustee and the qualified trust beneficiaries, if the court concludes that the modification or termination of the trust is consistent with the material purposes of the trust or that continuance of the trust is not necessary to achieve any material purpose of the trust.”33
Also under Section 7411, the Probate Court may consider extrinsic evidence, in the form of evidence as to the protection of the interests of a qualified trust beneficiary who does not consent to a proposed modification. “If the trustee fails or refuses to consent, or fewer than all of the qualified trust beneficiaries consent, to a proposed modification [o]f the trust under subsection (1), the modification [m]ay be approved by the court if the court is satisfied that both of the following apply: (a) If the trustee and all of the qualified trust beneficiaries had consented, the trust could have been modified or terminated under this section. (b) The interests of a qualified trust beneficiary who does not consent will be adequately protected.”34
Under Section 7412 of the Code, the Probate Court may consider extrinsic evidence as to the consequences of continuing a trust on its existing terms. “The court may modify the administrative terms of a trust if continuation of the trust on its existing terms would be impracticable or wasteful or impair the trust’s administration.”35
Also under Section 7412, the Probate Court may consider extrinsic evidence of circumstances not anticipated by the settlor, as well as extrinsic evidence of the settlor’s probable intention vis-à-vis such circumstances. “The court may modify the administrative or dispositive terms of a trust [i]f, because of circumstances not anticipated by the settlor, modification [w]ill further the settlor’s stated purpose or, if there is no stated purpose, the settlor’s probable intention.”36
Under Section 7413 of the Code, the Probate Court may consider extrinsic evidence as to the unlawfulness, impracticability and/or impossibility of a particular charitable purpose, as well as extrinsic evidence of the nature of the settlor’s charitable intent. “[I]f a particular charitable purpose becomes unlawful, impracticable, or impossible to achieve, no alternative taker is named or provided for, and the court finds the settlor had a general, rather than a specific, charitable intent, all of the following apply[:] (c) The court may apply cy pres to modify [t]he trust by directing that the trust property be applied or distributed, in whole or in part, in a manner consistent with the settlor’s general charitable intent.”37
Under Section 7414 of the Code, the Probate Court may consider extrinsic evidence as to the value of the trust property and the cost of trust administration. “The court may modify [a] trust [i]f it determines that the value of the trust property is insufficient to justify the cost of administration.”38
Under Section 7416 of the Code, the Probate Court may consider extrinsic evidence as to the settlor’s tax objectives and the settlor’s probable intention relative to a proposed modification. “To achieve the settlor’s tax objectives, the court may modify the terms of a trust in a manner that is not contrary to the settlor’s probable intention.”39 “This section permits the court to modify (i.e., affirmatively change) the terms of the trust to achieve the settlor’s objective.”40
V. REFORMATION OF WILLS AND TRUST AGREEMENTS
The question of the admissibility of extrinsic evidence may arise in a proceeding to reform the terms of a will or trust agreement. A will or trust reformation proceeding seeks to restate the terms of the instrument in order to effectively express the true intentions of the testator or settlor at the time the instrument was executed. “‘[R]eformation’ involves the use of interpretation (including evidence of mistake, etc.) in order to ascertain – and properly restate – the true, legally effective intent of settlors with respect to the original terms of trusts they have created[.]”41 “Reformation [m]ay involve the addition of language not originally in the instrument, or the deletion of language originally included by mistake, if necessary to conform the instrument to the settlor’s intent.”42
A. Reformation of Wills:
The Estates and Protected Individuals Code43 (“EPIC”) does not address the reformation of wills. Michigan common law concerning the reformation of wills, including the admissibility of extrinsic evidence, is not well developed, and it is suggested here that the Michigan Probate Council consider whether it would be appropriate to amend EPIC to clarify the law governing reformation of wills.
The law of reformation applies to legal instruments. “Michigan courts sitting in equity have long had the power to reform an instrument that does not express the true intent of the parties as a result of fraud, mistake, accident or surprise.”44 A will is a type of legal instrument.45 Logically, the law concerning reformation of instruments would seem to naturally encompass wills.
However, wills do not fit smoothly into the legal framework surrounding reformation. The law of reformation generally assumes two-party instruments and requires the presence of mistake or fraud on both sides. “Absent a mutual mistake or a unilateral mistake coupled with fraud, shown by clear and convincing evidence, this Court has declined to reform written instruments.”46 A testator’s mistake in a will would by definition be unilateral, which is not typically a sufficient basis to invoke reformation. “A unilateral mistake is not sufficient to warrant reformation.”47 A will represents a type of voluntary conveyance, and such a conveyance is generally not eligible for reformation. “[A] voluntary conveyance will not be reformed.”48
The Michigan Supreme Court’s only statement on the reformation of wills (in 1932) seemed to be prohibitive. “Testimony of the scrivener of a mistake in drafting a will or of an intention of testator different from that expressed in the will is not admissible, in the absence of ambiguity or mistake appearing upon the face of the will. … Nor may the court reform a will.”49 However, the Court of Appeals has relatively recently interpreted this decision to mean that reformation of a will is contingent on the existence of an ambiguity or mistake appearing in the will. “The Supreme Court has held that, in the absence of ambiguity or mistake appearing on the face of the document, even the testimony of the scrivener regarding a mistake or an intention of the testator different from that expressed in the will is not admissible and the court may not reform the document.”50 Taken together, these decisions indicate that extrinsic evidence is only admissible if an “ambiguity or mistake” appears on the face of the will.
West v McLoughlin51 seems to be the only example of a Michigan court ordering reformation of a will. There, the trial court found that the testator had transposed the terms “east” and “west” in describing real property devised by the will. Although the decision is not perfectly clear, the trial court apparently ordered the reformation of the will to correct the mistake, and its decision was affirmed on appeal.
In West, the transposition of “east” and “west” was not apparent from the face of the will. Instead, the trial court considered several types of evidence in order to conclude that the words had been transposed:
Had there not been a transposition of the terms above mentioned the result of his will would have been to have an overlap of approximately 17 acres of his extensive real property holdings that could not otherwise be accounted for. Additionally, absent the finding of the transposition, the will would have resulted in a devise of some eight acres he did not own[.]
Further, under the literal wording of the will there would have been disparity between the land received by certain of the involved children of nearly 25 acres. Under the interpretation of the trial judge the late Mr. Sturgis would have devised the acreage with almost computerized equality. There is no indication in the rest of the instrument that he intended to treat the children other than equally.52
Hence, the trial court considered several types of extrinsic evidence: whether the will as written effectively devised all of the estate’s property (requiring consideration of the estate’s inventory); whether the will as written devised property not owned by the estate (again, requiring consideration of the inventory); and whether there was any evidence of decedent’s intent to treat children unequally (requiring consideration of decedent’s expressions of his intentions). This extrinsic evidence obviously helped the trial court conclude that there was a non-apparent, or latent, mistake appearing on the face of the will. The West decision suggests that extrinsic evidence may be considered in order to prove the existence of a latent mistake in the will.
In 2010, the Michigan Court of Appeals quoted with approval a restatement recognizing the judicial ability to reform both wills and trusts: “According to one authority, wills and trusts ‘can be reformed if it is established by clear and convincing evidence: (1) that a mistake of fact or law, whether in expression or inducement, affected specific terms of the document; and (2) what the donor's intention was.’”53
In a proceeding to reform a will, it should be noted that the petitioner’s burden of proof would be subject to a heightened evidentiary standard: “clear and convincing” or “clear and satisfactory” evidence. “To obtain reformation, a plaintiff must prove a mutual mistake of fact, or mistake on one side and fraud on the other, by clear and convincing evidence.”54 “[T]he party seeking reformation must prove the mutual mistake by clear and satisfactory evidence, so as to establish the fact beyond cavil.”55
B. Reformation of Trust Agreements:
Unlike in the will reformation context, EPIC expressly allows reformation of a trust agreement under certain circumstances. Section 7415 of the Code governs reformation of a trust. “The court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor’s intention if it is proved by clear and convincing evidence that both the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.”56
In an action to reform a trust, the Probate Court may consider extrinsic evidence of mistake. “A mistake of expression occurs when the terms of the trust misstate the settlor’s intention, fail to include a term that was intended to be included, or include a term that was not intended to be included. [M]istakes of expression are frequently caused by scriveners’ errors[.]”57 “A mistake in the inducement occurs when the terms of the trust accurately reflect what the settlor intended to be included or excluded but this intention was based on a mistake of fact or law. [M]istakes of inducement often trace to errors of the settlor.”58 The trust need not contain an ambiguity in order for extrinsic evidence of mistake to be admissible. Again, the heightened burden of proof – “clear and convincing evidence” – should be noted.
VI. WILL CONTESTS
The question of the admissibility of extrinsic evidence may arise in a will contest. A will contest is a proceeding concerning the validity of the instrument proffered as the decedent’s will. Under EPIC, the Probate Court has exclusive jurisdiction over will contests.59
A. Proving Testamentary Intent:
Section 2502 of EPIC sets forth the execution formalities required for a traditional will in subsection (1): “Except as provided in subsection (2) and in sections 2503, 2506, and 2513, a will is valid only if it is all of the following: (a) In writing[;] (b) Signed by the testator or in the testator’s name by some other individual in the testator’s conscious presence and by the testator’s direction[; and] (c) Signed by at least 2 individuals, each of whom signed within a reasonable time after he or she witnessed either the signing of the will as described in subdivision (b) or the testator’s acknowledgment of that signature or acknowledgment of the will.”60
Section 2502 sets forth the execution formalities required for a holographic will in subsection (2): “A will that does not comply with subsection (1) is valid as a holographic will, whether or not witnessed, if it is dated, and if the testator’s signature and the document’s material portions are in the testator’s handwriting.”61
In determining whether the decedent intended a document to constitute his or her traditional or holographic will, the Probate Court may consider extrinsic evidence. In considering extrinsic evidence whether the decedent intended a document to constitute his or her holographic will, the Probate Court may consider portions of the document that are not in the decedent’s handwriting. “Intent that the document constitutes a testator’s will can be established by extrinsic evidence, including, for a holographic will, portions of the document that are not in the testator’s handwriting.”62
B. Signatory Acting for Testator:
As noted, a traditional will may be signed for the decedent by another person “in the testator’s conscious presence and by the testator’s direction.”[lxiii] If there is a dispute as to the applicability of this provision to the alleged will, then the finder of fact may consider extrinsic evidence of both (a) whether the testator directed the other person to sign, and (b) whether the other person signed in the testator’s “conscious presence”.64
C. Requirements for Witnessing Will:
A traditional will must be “[s]igned by at least 2 individuals, each of whom signed within a reasonable time after he or she witnessed either the signing of the will as described in subdivision (b) or the testator’s acknowledgment of that signature or acknowledgment of the will.”65 If there is a dispute as to whether the witnessing requirement has been satisfied, then the finder of fact may consider extrinsic evidence as to whether the witnesses signed the will within a reasonable time after he or she “saw the decedent sign the document, or [h]eard the decedent say or otherwise acknowledge that the signature on the document was [his/her] signature, or [h]eard the decedent say or otherwise acknowledge that the document was [his/her] will.”66
D. Proving Execution of Self-Proved Wills:
Section 2504 of EPIC recognizes, and provides the means for creating, self-proved wills.67 The execution of a self-proved will may be proved by filing the will and the acknowledgment and sworn statements with the Probate Court. “If a will is self-proved, compliance with signature requirements for execution is conclusively presumed and other requirements of execution are presumed subject to rebuttal without the testimony of any witness upon filing the will and the acknowledgment and sworn statements annexed or attached to the will, unless there is proof of fraud or forgery affecting the acknowledgment or a sworn statement.”68
For a self-proved will that contains the statutory acknowledgment clause, the finder of fact “may conclude that the will was witnessed in the manner required by law”, despite the fact that one or more witnesses may have testified (a) that the will was not properly witnessed; (b) that the witness does not remember what he or she signed; or (c) that the witness denies what he or she signed. 69
E. Proving Execution of Non-Self-Proved Wills:
The finder of fact may consider extrinsic evidence regarding the execution of a will that is not self-proved. “If evidence concerning execution of an attested will that is not self-proved is necessary in a contested case, the testimony of at least 1 of the attesting witnesses, if within the state and if competent and able to testify, is required. Due execution of an attested or unattested will may be proved by other evidence.”70 The finder of fact “may find that the will was executed in the manner required by law based upon any of the following: [a] the testimony of one of the witnesses who signed the will; or [b] the testimony of any person who did not actually sign the will as a witness but has personal knowledge of the signing of the will by the decedent and by the witnesses; or [c] any other evidence.”71
For a non-self-proved will that contains a witness attestation clause, the finder of fact “may conclude that the will was witnessed in the manner required by law,” despite the fact that one or more witnesses may have testified (a) that the will was not properly witnessed; (b) that the witness does not remember what he or she signed; or (c) that the witness denies what he or she signed.
F. Properly Executed Wills with Unusual Formats:
A decedent may execute a document with the formalities required of a will, but with an unusual format (e.g., letter, deed, bill of sale, contract).73 If the decedent’s testamentary intent is unclear, then the finder of fact may consider extrinsic evidence as to intent. “If the language is unclear as to testamentary disposition, there is a jury question, and extrinsic evidence showing the facts and circumstances of the making of the instrument may be introduced.”74
G. Writings Intended as Wills:
A decedent may execute a document or writing intended as a will, will revocation, will codicil, or will revival, but fail to comply with the requisite execution formalities. In that case, Section 2503 of EPIC authorizes the document or writing to be given effect, provided that “the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute” a will, will revocation, will codicil, or will revival.75 The finder of fact may consider extrinsic evidence as to the decedent’s intent. “In determining the decedent’s intent, [the finder of fact] must consider the contents of the [document/writing] and the surrounding facts and circumstances.”76
H. Lost, Destroyed or Otherwise Unavailable Wills:
The Probate Court may consider extrinsic evidence as to the existence and contents of a will that is alleged to be lost, destroyed or otherwise unavailable.77 “The proponent of a [lost/destroyed/otherwise unavailable] will has the burden of proving: [a] that the will was in existence; [b] that it was executed in the manner required by law; [or c] all or part of the contents of the will[.]”78 If a prior will is presented for probate, then the proponent of the lost, destroyed or otherwise unavailable will must also prove that the lost/destroyed/unavailable will revoked the prior will.79
I. Revocation of Will by Physical Means:
If it is alleged that the testator revoked a will by physical means, then the Probate Court may consider extrinsic evidence as to the revocatory act and the testator’s intent. “A will or a part of a will is revoked by [p]erformance of a revocatory act on the will, if the testator performed the act with the intent and for the purpose of revoking the will or part of the will or if another individual performed the act in the testator’s conscious presence and by the testator’s direction.”80 Section 2507 of EPIC defines “revocatory act” to include “burning, tearing, canceling, obliterating, or destroying the will or a part of the will.”81 Section 2507 further provides that “[a] burning, tearing, or canceling is a revocatory act on the will, whether or not the burn, tear, or cancellation touches any of the words on the will.”82
J. Presumptions as to Revocation:
When it is alleged that the testator revoked his or her will, the Probate Court may consider extrinsic evidence that the will existed in the past, that it was in the testator’s custody, and that it cannot be found after the testator’s death. Such extrinsic evidence gives rise to a presumption that the testator revoked the will. “A will that is known to have existed and to have been in the decedent’s custody during [his/her] lifetime and which cannot be found at [his/her] death raises a presumption that such will was destroyed by the decedent with the intention of revoking it.”83 The Probate Court may also consider extrinsic evidence that the decedent did not intend to revoke his or her will. “In determining whether this presumption has been overcome, [the finder of fact] may take into consideration all the surrounding circumstances which would tend to show that there was no intent to revoke, including what the decedent said.”84
Similarly, when it is alleged that the testator revoked his or her will, the Probate Court may consider extrinsic evidence that the testator executed two originals of the will, that one of the originals was in the testator’s custody, and that such original cannot be found after the testator’s death. Such extrinsic evidence gives rise to a presumption that the testator revoked the will. “If there have been executed duplicate wills made by the decedent but only one copy had been retained by [him/her], the failure to find the will in the custody of the decedent at the time of [his/her] death, even though a duplicate executed copy is found elsewhere, raises a presumption that decedent destroyed the will with the intention of revoking it.”85 The Probate Court may also consider extrinsic evidence that the decedent did not intend to revoke his or her will. “In determining whether this presumption has been overcome, [the finder of fact] may take into consideration all the surrounding circumstances which would tend to show that there was no intent to revoke, including what the decedent said.”86
K. Dependent Relative Revocation:
Where a testator revoked a will with the intention of making a replacement will, and the replacement will either is not made or is not valid for any reason, the Probate Court may consider extrinsic evidence as to whether the testator would have intended to revive the revoked will, as well as what the contents of the revoked will were. “The doctrine of dependent relative revocation provides that if a testator cancels a will with the intent of making a new will as a substitute, and the new will is ineffective for any reason, then there is a presumption that the testator would have preferred the old will to intestacy, and the old will may be admitted to probate in the absence of evidence overcoming the presumption.”87
“If it is clear that the cancellation [of the old will] and the making of the new will were parts of one scheme, and the revocation of the old will was so related to the making of the new [will] as to be dependent upon it, then, if the new will be not made, or, if made, is invalid, the old will, though canceled, should be given effect, if its contents can be ascertained in any legal way.”88 Alternately, “[i]f the destroyed will is materially different from the later will, the court will not hold the testator would not have destroyed it had he known his later will would not become effective.”89
L. Testamentary Capacity:
In a will contest based on alleged lack of testamentary capacity, the Probate Court may consider extrinsic evidence as to the statutory elements of testamentary capacity. Under Section 2501 of EPIC, “[a]n individual has sufficient mental capacity to make a will if all of the following requirements are met: (a) The individual has the ability to understand that he or she is providing for the disposition of his or her property after death[;] (b) The individual has the ability to know the nature and extent of his or her property[;] (c) The individual knows the natural objects of his or her bounty[; and] (d) The individual has the ability to understand in a reasonable manner the general nature and effect of his or her act in signing the will.”90 “The contestant has the burden of proving that at the time the decedent made the document [he/she] did not have sufficient mental capacity to make a will.”91
Evidence that the testator was adjudged mentally ill or mentally incompetent, adjudged a legally incapacitated person, committed to a mental hospital, or placed under a conservatorship or guardianship “does not of itself imply lack of mental capacity at the time the will was made.”92 “However, such fact may be considered together with all the other evidence in determining whether the decedent had sufficient mental capacity to make a will.”93
M. Insane Delusion:
The Probate Court may consider extrinsic evidence that the will is the product of the testator’s insane delusion, in which case the will is invalid. “[I]f the decedent was suffering from an insane delusion at the time [he/she] made the will, and if that insane delusion influenced the decedent in disposing of the property in the manner [he/she] did, then the will is not valid.”94 For purposes of this rule, “[a]n insane delusion exists when a person persistently believes supposed facts which had no real existence and so believes such supposed facts against all evidence and probabilities and without any foundation or reason for the belief, and conducts [himself/herself] as if such facts actually existed.”95
N. Wills Procured Through Undue Influence:
The Probate Court may consider extrinsic evidence that the will is the product of undue influence, in which case the will is invalid. “To establish undue influence it must be shown that the grantor was subjected to threats, misrepresentation, undue flattery, fraud, or physical or moral coercion sufficient to overpower volition, destroy free agency and impel the grantor to act against his inclination and free will.”96 “A will which results from undue influence is a will which the decedent would not otherwise have made. It disposes of the decedent’s property in a manner different from the disposition the decedent would have made had [he/she] been free of such influence.”97
The Probate Court may consider extrinsic evidence as to the three factors that establish a presumption of undue influence. “The presumption of undue influence is brought to life upon the introduction of evidence which would establish (1) the existence of a confidential or fiduciary relationship between the grantor and a fiduciary, (2) the fiduciary or an interest which he represents benefits from a transaction, and (3) the fiduciary had an opportunity to influence the grantor's decision in that transaction.”98 The Probate Court may also consider extrinsic evidence offered to rebut the presumption of undue influence – i.e., evidence tending to show that the will was not the product of undue influence.99
O. Wills Procured Through Fraud:
The Probate Court may consider extrinsic evidence that the will is the product of fraud, in which case the will is invalid. “A will is not valid if it was made as a result of fraud.”100 “To establish [the] allegation that [the respondent] fraudulently induced the [testator] to make the will in question, it was incumbent on contestants to prove that [the respondent] had misrepresented material facts and that the [testator] relied upon and was influenced by these misrepresentations in disposing of her property.”101
VII. TRUST CONTESTS
A. Proving Creation of Trust:
In a contest over the creation of a trust, extrinsic evidence is admissible as to the statutory elements required for trust creation. Section 7402 of the Code sets forth the requirements for creation of a trust. “A trust is created only if all of the following apply: (a) The settlor has capacity to create a trust[;] (b) The settlor indicates an intention to create the trust[;] (c) The trust has a definite beneficiary or is either of the following: (i) A charitable trust[; or] (ii) A trust for a noncharitable purpose or for the care of an animal, as provided in section 2722[;] (d) The trustee has duties to perform[; and] (e) The same person is not the sole trustee and sole beneficiary.”102
Extrinsic evidence is also admissible as to whether the trust was created by a proper method under Section 7401 of the Code. “A trust may be created by any of the following: (a) Transfer of property to another person as trustee during the settlor's lifetime or by will or other disposition taking effect upon the settlor's death[;] (b) Declaration by the owner of property that the owner holds identifiable property as trustee[;] (c) Exercise of a power of appointment in favor of a trustee[; or] (d) A promise by 1 person to another person, whose rights under the promise are to be held in trust for a third person[.]”103
B. Mental Capacity of Trust Settlor:
In a trust contest based on the settlor’s alleged lack of mental capacity to create a trust, the Probate Court may consider extrinsic evidence as to the settlor’s mental capacity. Section 7601 of the Code provides that “[t]he capacity required to create, amend, revoke, or add property to a revocable trust, or to direct the actions of the trustee of a revocable trust, is the same as that required to make a will.”104 Again, Section 2501 of EPIC governs mental capacity to make a will.105 “The contestant has the burden of proving by a preponderance of the evidence that at the time the settlor [created/amended/revoked] the trust [he/she] did not have sufficient mental capacity to do so.”106
C. Amendment or Revocation of Trust:
The Probate Court may consider extrinsic evidence showing that the settlor exercised the power to amend or revoke a revocable trust. Section 7602 of the Code provides as follows: “The settlor may revoke or amend a revocable trust in any of the following ways: (a) By substantially complying with a method provided in the terms of the trust[;] (b) If the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, in either of the following ways: (i) If the trust is created pursuant to a writing, by another writing manifesting clear and convincing evidence of the settlor's intent to revoke or amend the trust[; or] (ii) If the trust is an oral trust, by any method manifesting clear and convincing evidence of the settlor's intent.”107
D. Existence of Oral Trust:
Michigan case law has long recognized oral trusts.108 However, an oral trust in real property would violate both the statute of uses and trusts, and the statute of frauds.109 Under Section 7407 of the Code, extrinsic evidence is admissible to show the existence and terms of an oral trust, subject to a heightened burden of proof: “Except as required by a statute other than this article, a trust need not be evidenced by a trust instrument, but the creation of an oral trust and its terms may be established only by clear and convincing evidence.”110
E. Trusts Procured Through Undue Influence:
The Probate Court may consider extrinsic evidence that the trust is the product of undue influence, in which case it is invalid. “To establish undue influence it must be shown that the [settlor] was subjected to threats, misrepresentation, undue flattery, fraud, or physical or moral coercion sufficient to overpower volition, destroy free agency and impel the [settlor] to act against his inclination and free will.”111 “Action that results from undue influence is action that the settlor would not otherwise have taken. It disposes of the trust property in a manner different from the disposition the settlor would have made had [he/she] been free of such influence.”112
As with wills, the Probate Court may consider extrinsic evidence as to the factors that establish the presumption of undue influence.113 The Probate Court may also consider extrinsic evidence offered to rebut the presumption of undue influence.114
F. Trusts Procured Through Fraud:
The Probate Court may consider extrinsic evidence that the trust is the product of fraud, in which case the trust is invalid. “A trust is not valid to the extent it was [created/amended] as a result of fraud.”115 “Where fraud or violation of a trust is involved, [the parol evidence] rule does not obtain[.]”116
VIII. OTHER WILL AND TRUST PROCEEDINGS
A. Contracts Concerning Succession:
Under Section 2514 of EPIC, the Probate Court may consider only consider limited types of extrinsic evidence of the existence and terms of a contract concerning succession, meaning “a contract to make a will or devise, not to revoke a will or devise, or to die intestate”.117 Extrinsic evidence of the terms of a contract concerning succession is admissible, provided that the contract is expressly referenced in a will.118 Extrinsic evidence, in the form of “[a] writing signed by the decedent evidencing the contract”, is also admissible.119 Extrinsic evidence is otherwise inadmissible to prove the existence or terms of a contract concerning succession.
B. Trusts for Pets:
Section 2722 of EPIC recognizes the existence of trusts for pets. “[A] trust for the care of a designated domestic or pet animal is valid. The trust terminates when no living animal is covered by the trust.”120 “A governing instrument shall be liberally construed to bring the transfer within this subsection, to presume against the merely precatory or honorary nature of the disposition, and to carry out the general intent of the transferor.”121 Section 2722 expressly provides that the Probate Court may consider extrinsic evidence of the transferor’s intent with regard to such a trust.122
C. Constructive Trusts:
“Constructive trusts are creatures of equity and their imposition makes the holder of the legal title the trustee for the benefit of another who in good conscience is entitled to the beneficial interest.”123 The Probate Court may consider extrinsic evidence in ruling on a request for imposition of a constructive trust; the parol evidence rule does not apply to a petition to impose a constructive trust.124
IX. CONCLUSION
In order to apply the proper rules concerning the admissibility of extrinsic evidence in will and trust proceedings, Probate Courts (as well as appellate courts) should be careful to determine the true nature of each proceeding, regardless of how the parties have labeled their pleadings and claims. Distinguishing among construction, modification and reformation proceedings presents a particular possibility for confusion. If no changes are sought to be made to the instrument, but there is an issue as to the interpretation of the instrument, including the need to resolve an ambiguity, then the rules governing construction govern. If changes are sought to be made to the instrument, then the proceeding involves either reformation or modification. Reformation seeks to make a change in order to express the true intentions of the testator or settlor, considered as of the execution of the instrument. Modification seeks to make a change in order to address a circumstance arising subsequent to the execution of the instrument, but in a way that is consistent with the settlor’s intentions. Probate Courts are certain to continue to confront interesting and challenging questions concerning the admissibility of extrinsic evidence in will and trust proceedings.
Endnotes:
1 Black’s Law Dictionary (5th ed 1979).
2Id.
3Shay v Aldrich, 487 Mich 648, 667; 790 NW2d 629 (2010).
4Detroit Wabeek Bank & Trust Co v City of Adrian, 349 Mich 136, 143; 84 NW2d 441 (1957).
5Miller v Dep’t of Mental Health, 432 Mich 426, 433 n 17; 442 NW2d 617 (1989), quoting 1 Scott, Trusts, §38, pp 403-404.
6In re Reisman Estate, 266 Mich App 522, 527; 702 NW2d 658 (2005).
7In re Nowels Estate, 128 Mich App 174, 177; 339 NW2d 861 (1983).
8In re Kremlick Estate, 417 Mich 237, 240; 331 NW2d 228 (1983).
9In re Raymond Estate, 483 Mich 48, 52; 764 NW2d 1 (2009) (citations and quotations omitted).
10Detroit Wabeek Bank & Trust Co, 349 Mich at 143.
11Detroit Bank & Trust Co v Grout, 95 Mich App 253, 268-269; 289 NW2d 898 (1980).
12Raymond Estate, 483 Mich at 52 (citations and quotations omitted).
13In re Dudley Trust, No 287918, 2010 WL 935643, at *2 (Mich Ct App Mar 16, 2010).
14In re Allen Estate, 150 Mich App 413, 417; 388 NW2d 705 (1986).
15Allen Estate, 150 Mich App at 417.
16Burke v Central Trust Co, 258 Mich 588, 592; 242 NW 760 (1932).
17Raymond Estate, 483 Mich at 52 (citations and quotations omitted).
18In re Warmbier Estate, 262 Mich 160, 161; 247 NW 140 (1933).]
19In re Kostin Estate, 278 Mich App 47, 53; 748 NW2d 583 (2008).
20Detroit Wabeek Bank & Trust Co, 349 Mich at 143.
21Detroit Wabeek Bank & Trust Co, 349 Mich at 143.
22Sarow v Wawrzynski, No 207600, 1999 WL 33453924, at *1 (Mich Ct App Mar 5 1999).
23Karam v Law Offices of Ralph J. Kliber, 253 Mich App 410, 424; 655 NW2d 614 (2002).
24Dudley Trust, 2010 WL 935643, at *3.
25Hund v Holmes, 395 Mich 188, 196-197; 235 NW2d 331 (1975).
26In re Butterfield Estate, 405 Mich 702, 711 n 6; 275 NW2d 262 (1979 (citations and quotations omitted).
27In re Hope Trust No. 1, No 288685, 2010 WL 1573794, at *1 n 2 (Mich Ct App Apr 20, 2010).
28Kremlick Estate, 417 Mich at 241.
29In re McPeak Estate, 210 Mich App 410, 412; 534 NW2d 140 (1995).
30Burke, 258 Mich at 594 (invalidating provisions in testamentary trust and remanding for modification); In re Crawford's Estate, 34 Mich App 334, 343; 191 NW2d 146 (1971) (holding that the answer to the question of whether the court could modify a testamentary trust was “incontestably affirmative”).
31 J. Martin & M. Harder, Estates and Protected Individuals Code with Reporters’ Commentary Section 700.7111, Reporter’s Comment (ICLE 2011), quoting Restatement Trusts, 2d, §62, Reporter’s Comment (2007).
32 MCL 700.7101 et seq.
33 MCL 700.7411(1)(a).
34 MCL 700.7411(5).
35 MCL 700.7412(1).
36 MCL 700.7412(2).
37 MCL 700.7413(1)(c).
38 MCL 700.7414(2).
39 MCL 700.7416.
40 J. Martin and M. Harder, Estates and Protected Individuals Code with Reporters’ Commentary Section 700.7416, Reporter’s Comment (ICLE 2011).
41 J. Martin and M. Harder, Estates and Protected Individuals Code with Reporters’ Commentary Section 700.7111, Reporter’s Comment (ICLE 2011), quoting Restatement Trusts, 3d, § 62 Reporter’s Comment (2007).
42 J. Martin and M. Harder, Estates and Protected Individuals Code with Reporters’ Commentary Section 700.7415, Reporter’s Comment (ICLE 2011), quoting Uniform Trust Code §415, Reporter’s Comment.
43 MCL 700.1101 et seq.
44Johnson Family Ltd P’ship v White Pine Wireless, LLC, 281 Mich App 364, 371-372; 761 NW2d 353 (2008).
45See, e.g., In re Fowle’s Estate, 292 Mich 500, 503; 290 NW 883 (1940) (“The form of any instrument is of little consequence in determining whether it is a will or not. If it be executed with the formalities required by the statute, and if it is to operate only after the death of the maker, it is a will.”); In re Raymond’s Estate, 276 Mich App 22, 27; 739 N.W.2d 889 (2007) (defining a will as an “instrument”); Cooper v Edgewater Bank, No 296189, 2011 WL 2848782, at *2 (referring to a “written instrument, such as a contract or will”).
46Theophelis v Lansing Gen Hosp, 430 Mich 473, 487; 424 NW2d 478 (1988).
47Casey v Auto Owners Ins Co, 273 Mich App 388, 398; 729 NW2d 277 (2006).
48Scott v Grow, 301 Mich 226, 235; 3 NW2d 254 (1942).
49Burke, 258 Mich at 592.
50In re Trust of Pursell, No 195602, 1997 WL 33352851, at *2 (Mich Ct App May 2, 1997), citing Burke, 258 Mich at 592.
51 42 Mich App 180; 201 NW2d 336 (1972).
52West, 42 Mich App at 183.
53Hope Trust No 1, 2010 WL 1573794, at *1 n 3 (Mich Ct App Apr 20, 2010), quoting 2 Restatement Property, 3d, § 12.1, Comment c, p 354.
54Casey v Auto Owners Ins Co, 273 Mich App 388, 398; 729 NW2d 277 (2006).
55Johnson Family Ltd P’ship, 281 Mich App at 379.
56 MCL 700.7415.
57 J. Martin and M. Harder, Estates and Protected Individuals Code with Reporters’ Commentary Section 700.7415, Reporter’s Comment (ICLE 2011), quoting Uniform Trust Code §415, Reporter’s Comment.
58Id.
59 MCL 700.1302(a).
60 MCL 700.2502(1).
61 MCL 700.2502(2).
62 MCL 700.2502(3).
63 MCL 700.2502(1).
64 For pre-EPIC Michigan case law on this subject, see In re Lane’s Estate, 265 Mich 539; 251 NW 590 (1933); Bradford v Vinton, 59 Mich 139; 26 NW 401 (1886).]
65 MCL 700.2502(1)(c).
66 M Civ JI 170.13.
67 MCL 700.2504.
68 MCL 700.3406(2).
69 M Civ JI 170.17A.
70 MCL 700.3406(1).
71 M Civ JI 170.15B.
72 M Civ JI 170.17B.
73 See, e.g., In re Merritt’s Estate, 286 Mich 83; 281 NW 546 (1938).
74 M Civ JI 170.05, Comment, citing In re Lloyd’s Estate, 256 Mich 305; 239 NW 390 (1931).
75 MCL 700.2503. See In re Estate of Smith, 252 Mich App 120; 651 NW2d 153 (2002).
76 M Civ JI 170.08.
77 See MCL 700.3402(1)(c).
78 M Civ JI 170.21.
79Id.
80 MCL 700.2507(1)(b).
81Id.
82Id.
83 M Civ JI 170.32.
84Id.
85 M Civ JI 170.33.
86Id.
87 34 Michigan Law & Practice Encyclopedia (2d ed), Wills, §63.
88In re Houghten’s Estate, 310 Mich 613, 619-620; 17 NW2d 774 (1945), quoting McIntyre v McIntyre, 47 SE 501, 503 (Ga 1904).
89In re Bonkowski’s Estate, 266 Mich 112, 114; 253 NW 235 (1934).
90 MCL 700.2501(2).
91 M Civ JI 170.41.
92 M Civ JI 170.42.
93Id.
94 M Civ JI 170.43.
95Id.
96Kar v Hogan, 399 Mich 529, 537; 251 NW2d 77 (1976).
97 M Civ JI 170.44.
98Kar v Hogan, 399 Mich at 537.
99 See MRE 301; Widmayer v Leonard, 422 Mich 280; 373 NW2d 538 (1985).
100 M Civ JI 170.46.
101In re Hannan’s Estate, 315 Mich 102, 126; 23 NW2d 222 (1946).
102 MCL 700.7402(1).
103 MCL 700.7401.
104 MCL 700.7601.
105 MCL 700.2501(2).
106 M Civ JI 179.04.
107 MCL 700.7602(3).
108 See Osius v Dingell, 375 Mich 605; 134 NW2d 657 (1965); Harmon v Harmon, 303 Mich 513; 6 NW2d 762 (1942); Economy v Roberts, 274 Mich 484; 265 NW 441 (1936).
109 See MCL 555.11; MCL 566.106. See also Children of Chippewa, Ottawa & Potawatomy Tribes v Regents of the Univ of Mich, 104 Mich App 482, 491; 305 NW2d 522 (1981).
110 MCL 700.7407.
111Kar v Hogan, 399 Mich at 537.
112 M Civ JI 179.10.
113Kar v Hogan, 399 Mich at 537.
114 See MRE 301; Widmayer 422 Mich at 280.
115 M Civ JI 179.12.
116Still v Caldwell, 341 Mich 360, 370; 67 NW2d 63 (1954).
117 MCL 700.2514(1).
118 MCL 700.2514(1)(b).
119 MCL 700.2514(1)(c).
120 MCL 700.2722(2).
121Id.
122Id.
123Arndt v Vost, 83 Mich App 484, 487;l 268 NW2d 693 (1978).
124Kren v Rubin, 338 Mich 288, 295; 61 NW2d 9 (1953); Nichols v Martin, 277 Mich 305, 314-15; 269 NW 183 (1936); Arndt, 83 Mich App at 487-88; Robair v Dahl, 80 Mich App 458, 464; 264 NW2d 27 (1978).
Source:
Michigan Probate & Estate Planning Journal (Vol. 32, No. 1)
