MCL 700.7821(3)(a) and (b) give two examples of when a release given to a trustee will not be valid. First, if its improperly induced by the trustee. Second, if the beneficiary didn’t know a material fact relating to a trustee’s breach of duty.

A 2014 unpublished opinion of the Court of Appeals provides a third example of an invalid release; In re Robert Stout Revocable Trust where the trustee told beneficiaries they’d get money coming to them, but only if they’d sign a release first. The trial court didn’t find this a problem, but the Court of Appeals reasoned MCL 700.7821 (referenced earlier) already required the trustee to expeditiously distribute trust property. Therefore, conditioning payment on release was a breach of fiduciary duty itself.

 What if there was an allegation of error related to the proposed distribution? Would this justify a mandatory release? What if the trustee offered a release for payment but, if not, then the trustee would seek instruction from the court (which could tie up funds for years and come at great expense to the trust and its beneficiaries)? These questions don’t appear to be answered, yet. Going forward, trustees would be well advised to seek experienced counsel before seeking a release.

Obviously, you can’t be replaced–but your income can.

If you have young children, there’s a good chance you also have things like student loans, a mortgage, maybe a car payment, and even a credit card. On top of that, I know it’s hard to plan for your own demise. The good news is that about $20 per month can get a healthy 30-year-old female $500,000 in life insurance. (Men, at any age, have to pay a little more.)

Applying this life insurance to a trust you create in your will can make sure your children are taken care of, even if they lose you.

I can feel your skepticism already: ‘Ryan, getting life insurance is easy, I don’t need a lawyer.’

That’s true. However, dumping a bunch of money on someone and hoping your children are cared for is a bad plan (even if you give it to your parents…I’ll go into this in another post).

There are more benefits of a trust by will than I need to get into here. But you should have the key points: 1) you get to set the terms for the use of the money; 2) nobody else owns the money–it can only be used for your children; 3) there’s no probate court involvement in your trust; and 4) the cost is so low it can fit into any budget.

Your needs could be different. Call me at (517) 796-3907 and we’ll set up a time to talk about what estate planning needs you have.