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Michigan Court Of Appeals Holds Spouse’s Relative Was No Longer Beneficiary To Will Or Trust After Divorce

by | Jan 3, 2022 | Wills, Trusts And Estates |

 

On December 16, 2021, the Michigan Court of Appeals released their decision in Joseph & Sally Grablick Trust, ___ Mich App ___; ___ NW2d ___ (2021)(Docket No. 353951) holding that the biological daughter of decedent’s ex-wife (but not decedent) was no longer a beneficiary of the decedent’s will or the family trust because the dispositions to her were revoked under MCL 700.2807(1)(a)(i) when the decedent and his wife divorced.

In this case, the daughter (“appellant”) was eight years old at the time her mother and the decedent married in October 1993 and was treated by the decedent like his own daughter both during and after the marriage.  The decedent executed his will on September 28, 2005 that identified his spouse and identified if his living children as the appellant who is his “step-child”.  Also, on September 28, 2005, the decedent and his spouse executed a joint revocable trust that stated the grantors were married to each other and the appellant was their only living child.  Under the terms of the trust, upon the death of either spouse, the surviving spouse was entitled to receive all principal and income, and upon the death of the surviving spouse, appellant would receive all principal and income.  In the event the appellant did not survive them, the principal and income would be distributed by default to identified relatives of the decedent and identified relatives of his wife (50% to each).

However, the decedent and his wife divorced on April 3, 2019.  The decedent then died on July 2, 2019.  The appellant was appointed personal representative of the decedent’s estate and filed a petition for probate and a petition in the trust case requesting an order determining heirs.  The appellees, who were two blood relatives of the decedent that would receive the principal and income of the estate/trust if the appellant did not, filed a petition asking the court to exclude appellant as a beneficiary due to the statutory provision of MCL 700.2807(1)(a)(i).  The probate court found, after appellees’ motion for summary disposition, that the appellant was not a beneficiary of the decedent’s will or the trust because the dispositions to her were revoked under MCL 700.2807(1)(a)(i) when the decedent and his wife divorced.  This appeal followed.

MCL 700.2807(1)(a)(i) states the following:

  • “Except as provided by the express terms of a governing instrument, court order, or contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce, or annulment, the divorce or annulment of a marriage… [r]evokes all of the following that are revocable: [a] disposition or appointment of property made by a divorced individual to his or her former spouse in a governing instrument and a disposition or appointment created by law or in a governing instrument to a relative of the divorced individual’s former spouse.”

MCL 700.2806 defines certain terms used in MCL 700.2807(1)(a)(i) as follows:

  • “Disposition or appointment of property” includes, but is not limited to, a transfer of an item of property or another benefit to a beneficiary in a governing instrument. MCL 700.2806(a).
  • “Governing instrument” means a governing instrument executed by a divorced individual before the divorce from, or annulment of his or her marriage to, his or her former spouse. MCL 700.2806(d).
  • “Relative of the divorced individual’s former spouse” means an individual who is related to the divorced individual’s former spouse by blood, adoption, or affinity and who, after the divorce or annulment, is not related to the divorced individual by blood, adoption, or affinity. MCL 700.2806(e).

Consequently, in the absence of express terms to the contrary in the governing instrument, when a testator who has executed a will subsequently divorces his spouse, the divorce revokes any disposition or appointment of property to either the former spouse or the former spouse’s relatives.

The appellant asks the court to consider that, although it is clear she is not related by blood or adoption to the decedent, she was still related by affinity.  “Specifically, appellant asserts that by using the word ‘affinity’ in MCL 700.2806(e), the Legislature contemplated that a relative of the divorced individual’s former spouse may continue to be ‘related’ to the divorced individual after the divorce. She argues because she maintained a close, loving, father-daughter relationship with the decedent she is outside of the category of persons labeled ‘relatives’ of the divorced individual’s former spouse whose putative bequests are revoked pursuant to MCL 700.2806(e).”  Slip op at 9.

The Michigan Court of Appeals disagreed.  They adopted the definition of “affinity” first established in Bliss v Tyler, 149 Mich 601, 608; 113 NW 317 (1907) defined as:

  • “[T]he relation existing in consequence of marriage between each of the married persons and the blood relatives of the other, and the degrees of affinity are computed in the same way as those of consanguinity or kindred. A husband is related, by affinity, to all the blood relatives of his wife, and the wife is related, by affinity, to all blood relatives of the husband.”

In other words, when a couple marries, each spouse becomes related by affinity to the other spouse’s blood relatives by the same degree.  Does a relation by affinity survive the death of the spouse?  In Shippee v Shippee’s Estate, 255 Mich 35, 37; 237 NW 37 (1931), the Michigan Supreme Court explored the relationship between a mother-in-law and daughter-in-law as to whether their relationship by affinity survived the death of the daughter-in-law’s husband:

  • “[If] here was living issue of the marriage, then the relation by affinity survived the death of plaintiff’s husband, for in such event the mother-in-law was the grandmother of such issue. If there was no issue, then the affinity ended at the death of the connecting spouse… [D]eath of the spouse terminates the relationship by affinity; if, however the marriage has resulted in issue who are still living, the relationship by affinity continues.”

In this case, appellant and the decedent were not related by marriage after the decedent and his spouse divorced.  Appellant is a blood relative of the divorced individual’s former spouse and, after the divorce, is not related to the divorced individual because the affinal relationship no longer existed.  Accordingly, appellant’s disposition was revoked by the divorce and the probate court properly determined she was not a beneficiary to the estate or the trust.  Therefore, the assets and income of both the estate and the trust passed 100% to the decedent’s named blood relatives (the blood relatives of the former spouse who would have gotten 50% of the estate after the appellant would also have their dispositions revoked by operation of MCL 700.2807(1)(a)(i)).

This case contemplates that the operation of divorce not only terminates any possible inheritance rights of the former spouse but also those of the relatives of the former spouse that are not also related to the decedent.  Thus, even if the decedent had treated and wished for a stepchild to be treated in the same way as a biological child no matter what, the stepchild may still lose the right to inherit due to his parent’s divorce.  However, MCL 700.2807(1)(a)(i) provides an exception if there are “express terms” to the contrary in the governing instrument.  If the will or trust expressly provides that a stepchild will be a beneficiary of the estate or trust even in the event that the stepchild’s parents divorce, then this provision of the will or trust will likely survive scrutiny under MCL 700.2807(1)(a)(i).  To ensure that your final wishes are satisfied, you should always consider drafting your estate planning documents with the assistance of a skilled probate lawyer.

If you or a loved one have any further questions or need legal representation, then do not hesitate to contact the experienced attorneys at Kershaw, Vititoe & Jedinak PLC for assistance today.

 

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