A years-long probate litigation case was settled in Kalamazoo recently, resulting in a $23 million award for the Kalamazoo Community Foundation.

In his will, the founder of The Upjohn Co. requested that 2,000 shares of stock from the company be placed in a fund. Five years after his death, the funds were to be awarded to two or more outstanding employees. If the company no longer existed, then the fund was to be awarded to the Kalamazoo Community Foundation.

Things got complicated, however, when the business merged with another and then was acquired by a large corporation. In 2003, a probate court ruled that the company no longer existed. In 2010, however, the Michigan Court of Appeals ruled that it did. Finally, in June of this year, a probate judge ordered a resolution on a settlement of the $44 million trust in which the foundation would receive $23 million and the remaining funds would be used to continue the annual employee prizes.

The foundation, the corporation, the bank that serves as the trustee, and the Michigan attorney general agreed upon the settlement. Alternative dispute resolution, including mediation, is a common way for settlements to be reached in trust disputes. An alternative dispute resolution requires the lawyers from both sides to work together on behalf of the parties of the case, including trustees, outside of court to reach a compromise that all sides can agree to.

It is important when bequeathing money to charitable organizations in a will that the provisions of implementing that bequest are written as clearly as possible. No one can predict what the future holds, but careful consideration of various scenarios can prevent some probate issues from occurring.

Source: mLive, “$23 million gift is collected by the Kalamazoo Community Foundation as court settles history-laden Upjohn prize case,” Al Jones, June 21, 2013

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