Plan To Be 100

In this recently released unpublished decision, the Michigan Court of Appeals identifies four types of persons who are entitled to information about trust administration under the Michigan Trust Code.

The case is called: In Re Henry Hawkins Memorial Family Educational Trust (click on the name to read the case). 

Hawkins Trust is about a testamentary trust that continues for 20 years, during which period the Trustees have unfettered discretion to distribute trust property among certain individuals for defined educational purposes.  When the 20 years is up, the Trustees proceed to distribute the remaining trust property, but some of those to whom distributions were or could have been made want an accounting of the Trustees’ activities during their tenure.

The trial court says these people are not trust beneficiaries and are not entitled to accountings.  The COA reverses, and in doing so dissects the statutory scheme set forth in the MTC with respect to types of persons entitled to information, as well as when and what type of information each type is entitled to receive.

The COA finds that the MTC creates four classes of persons entitled to some information: (1) distributees, (2) permissible distributees, (3) qualified trust beneficiaries, and (4) nonqualified trust beneficiaries.  The COA finds also that appellants in this case fall into one or more classes such that they are entitled to accountings.

Hawkins Trust is the kind of case you may not want to read right away – but rather squirrel away until the until the issue comes up in practice – and it does.

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