Timeliness of a petition to reform a trust; MCL 600.5813; The Powers of Appointment Act; MCL 556.112(c); Frank v Linkner; Discovery; Dismissal of petition for a declaration that the limited power of appointment (LPA) had been exercised in a way that violated the terms of the Vivian Stolaruk Living Trust (VSLT); In re Estate of Reisman

In Docket No. 361518, the court affirmed the probate court’s order granting summary disposition to appellee-Giarmarco (Trustee for one of the trusts at issue) as to a petition to reform a trust and its earlier order granting Giarmarco’s discovery motion. In Docket No. 365004, it also affirmed the probate court’s order denying petitioners’ (the adult children of the grantors of the trusts, the now-deceased Steve and Vivian Stolaruk) separate petition for a declaration that Steve exercised the LPA granted to him by the VSLT in a manner not permitted by the VSLT. These consolidated appeals arose from Steve’s exercise in 2017 of the LPA, “the effect of which deprived petitioners of their distributive shares under the VSLT.” In Docket No. 361518, petitioners argued that the probate court erred by holding that their 2019 petition to reform the VSLT was not timely filed under MCL 600.5813. But the court held that the “alleged wrong was the wrongful inclusion of the LPA in the VSLT, which allegedly conflicted with Vivian’s intentions, and the injury occurred in 2003, when Vivian died and the VSLT and accompanying LPA became irrevocable. It was at that point that petitioners were harmed because Steve then had the power to use the LPA to [their] detriment. Although Steve did not actually use this LPA until 2017, petitioners lost the certainty of any distribution under the VSLT in 2003, before” he exercised this power. Thus, the circumstances here were analogous to those in Frank. “As such, the probate court did not err by ruling that petitioners’ claim accrued in 2003, and as a result, their petition challenging the validity of the LPA, which was not filed until 2019, was untimely under MCL 600.5813.” As to petitioners’ arguments about discovery, the court noted “the probate court did not completely foreclose the possibility that petitioners could pursue their requested discovery in the future because it granted Giarmarco’s motions without prejudice, thereby permitting petitioners to again seek relevant discovery if future events justified it. Under these circumstances, [its] decision did not fall outside the range of reasonable and principled outcomes.” In Docket No. 365004, involving Steve’s exercise of the LPA, petitioners argued “that Article Nine, Section 4 and Article 10, Section 3 unambiguously limit Steve to using the LPA only to appoint assets to Vivian’s descendants.” The court disagreed, concluding the probate court did not err in its interpretation. It also found the probate court did not err by determining “that Steve’s exercise of the LPA did not improperly expose the VSLT marital and family trust assets to Steve’s creditors.”