Alleged violation of the trustee’s duties by failing to distribute $40,000 to a beneficiary & purchase her a condominium; Trust interpretation; In re Estate of Stan; In re Kostin; In re Raymond Estate; Fiduciary duty; MCL 700.1212(1); Hertz v. Miklowski; “Shall”; Smitter v. Thornapple Twp.; “Any”; People v. Hesch; A discretionary trust provision; MCL 700.7103(d)(1); Sanctions; Kitchen v. Kitchen; MCL 600.2591(3)

The court rejected appellant-Mary Basso’s claim that appellee-Fraser violated his duties as trustee by not distributing $40,000 to her and purchasing a condo for her pursuant to the terms of the trust, and upheld the probate court’s imposition of sanctions upon her under MCL 600.2591(3). Mary appealed the order of the probate court allowing the second annual accounting filed by Fraser, successor trustee of the trust, “denying Basso’s objections to the accounting, and awarding sanctions to Fraser and the trust to be paid by Basso personally.” The trust contained a provision for the distribution of the proceeds of the sale of a home, “a separate provision for the distribution of $40,000 directly to Mary, and a third residuary clause governing the distribution of any remaining trust assets.” Reading the provisions together, it was clear that Mary was “to receive $40,000 in cash from the remainder of the estate, separate from the proceeds of the sale of the Alderly Way home. Regarding the $40,000 distribution, it was clear from the first accounting filed by Fraser that, due primarily to Mary’s ceaseless litigation, there simply were insufficient trust assets to pay her that distribution.” The court concluded that “the distribution of the proceeds of the sale of the home was the subject of a separate, detailed provision; apart from those proceeds, the cupboard was bare and Mary’s distribution could not be made.” As to the failure to cause the trust to purchase her a one-bedroom condo, Fraser argued that the trust language “permitted him to spend ‘any’ amount of the proceeds ‘in his sole discretion’ toward this end, and that, in light of the depletion of a large portion of the trust assets, the possibility of further litigation, and his fiduciary duty towards all beneficiaries, not just Mary, he” opted to exercise this discretion not to spend trust assets on the condo. The court agreed. It also held that the probate court correctly imposed sanctions upon her for filing frivolous objections to the petition for a second accounting. Affirmed.