In In re Michael Eyde Trust, Docket No 355947, 2022 Westlaw 258293 (Mich Ct App Jan 27 2022) (unpublished), the Michigan Court of Appeals considered the validity of a trustee’s transfer of the principal place of trust administration from Michigan to Illinois. The trust in question authorized the trustee to “[c]hange the situs and principal place of administration of any trust under this Agreement by notice to each current beneficiary[.]” The trustee elected to change the principal place of administration from Michigan to Illinois and gave notice of such election to the beneficiaries.
A trust beneficiary petitioned a Michigan probate court to invalidate the transfer to Illinois, alleging that the notice was defective because it was not served 63 days before the transfer, as required by MCL 700.7108(4). The trustee moved to dismiss the objection, arguing that the Michigan probate court lacked subject-matter jurisdiction to hear the objection because the principal place of trust administration had already been transferred to Illinois. The probate court denied the trustee’s motion, and the trustee appealed.
The Michigan Court of Appeals reversed the probate court’s ruling, finding that the probate court lacked subject-matter jurisdiction because the trust had already been transferred to Illinois. The 63-day notice requirement did not apply, because the statutory requirement was overridden by the terms of the trust itself, which did not require 63-day notice but rather simply “notice.” Simple notice of the transfer had been provided.
What is to be learned from this case? When a party to a trust dispute needs help from the probate court, the lawsuit cannot be filed with just any probate court. Instead, the dispute must be raised before a probate court which has subject-matter jurisdiction over the particular trust in question. This case indicates that a Michigan probate court may lack subject-matter jurisdiction over the lawsuit if the trustee has previously and successfully transferred the principal place of administration to another state. However, the Court of Appeals indicated that its ruling was limited to the probate court’s jurisdiction over the beneficiary’s objection to the transfer, and it was not expressing an opinion as to whether the probate court might have jurisdiction over other matters related to this trust.
If you need assistance with a dispute involving a trust, estate, probate, guardianship or conservatorship matter, please contact David Skidmore at dskidmore@wnj.com or 616.752.2491.
