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High court upholds probate court decision to cut out heir

A person's death may be felt by a wide range of people, but it is usually up to surviving family members to deal with the difficult task of finalizing the estate of the deceased. This can become complicated if some of the heirs do not agree with the terms of a trust or will. Trust litigation can be drawn out and emotionally taxing when family members fight against one another. A state Supreme Court recently ruled against one daughter of a late millionaire who had challenged the terms of her father's trust in this way.

Macomb County residents may be interested in the case because the stipulation that led to the woman's removal as a trustee is sometimes included in trusts formed in Michigan. The daughter challenged the trust's legality, which violated a clause that forbade such action. This type of clause is known as a no contest or in terrorem clause.

The father of the woman who challenged the trust had been a developer and died in 1995. The family estate was worth around $70 million at the time of his death, but it also owed around $50 million. The trust fund called for 12 equal trusts to be created, one for each of the late developer's six children and the other six for the next generation. The daughter filed a suit to challenge the terms of this fund in 2007.

Probate court dismissed the daughter's complaint. The state Supreme Court agreed with the probate court's ruling and remanded the case back to that court to decide who should pay attorney's fees.

Navigating the terms of a trust or will is difficult without a firm understanding of all applicable laws. Those who disagree with a trust, will or other estate instrument should be careful when challenging terms in case there is a provision that prohibits taking such action. A wrong move can be costly, so people need to be sure they know what they are doing to avoid losing out on their fair share of their inheritance in any probate dispute.

Source: The Telegraph, "Supreme court rules against former Tamposi heir cut out of late developer's trust," Patrick Meighan, Feb. 1, 2013

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