Trust dispute; Approval of a settlement agreement & addendum; MCL 700.7111; Whether the agreement violated the material purpose of the revocable trust; Trustee breach of fiduciary duty claims; Reliance on counsel’s recommendations; MCL 700.7817(w)

The court held that the probate court did not abuse its discretion in approving the settlement agreement in this trust dispute, and that the cotrustees did not breach their duties by entering into the agreement. Appellants filed a petition requesting “an accounting, return of property, and turn-over of real estate as well as to remove the cotrustees.” The probate court denied the petition. The now deceased Walter Sparling established a revocable trust. He was married to appellee-Mary for 66 years and had eight children, including the four appellants and the other two appellees (the cotrustees). As a result of negotiations in prior litigation, Mary and the cotrustees entered into the settlement agreement, which provided a payment of $746,000 to her from the trust. They also entered into an addendum to the agreement that provided she would receive a Florida condo “in lieu of some of the monthly payments under the agreement.” Appellants argued the probate court erred in approving the “agreement and addendum under MCL 700.7111 because the cotrustees’ representation was inadequate, and the agreements violated the revocable trust’s material purpose.” The court found that the “trust, the trustees, and the probate court were all clear that the purpose of the trust was to give Mary the income from the trust during her lifetime. This purpose was thwarted when income-producing assets were removed from the revocable trust and placed in the irrevocable trust that was later found to be invalid due to Walter’s diminished mental capacity. The settlement attempted to restore Mary to the position that she would have been in had the trust’s purpose been respected throughout the years.” The court concluded the probate “court did not abuse its discretion in finding that the settlement was in furtherance of the material purpose of the trust, given that the settlement returned to Mary income that she would have received but for the invalid irrevocable trust.” As to appellants’ breach of fiduciary duty claim, “not only did the cotrustees rely on counsel’s advice, but they also did their own investigation into the amount Mary should have been receiving. Moreover, the settlement was favorable to the trust, in that Mary accepted less than what she was likely entitled. Therefore, the cotrustees did not breach their duties by entering into the” agreement. Affirmed.