In Re Gene L Leithauser Trust ( 2022 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
In re GENE L. LEITHAUSER TRUST.
JANIS M. BRENNEN, Trustee of UNPUBLISHED
GENE L. LEITHAUSER TRUST, May 26, 2022
Petitioner,
v No. 357738
Oakland Probate Court
JOYCE LEITHAUSER, LC No. 2021-399313-TV
Appellant,
and
ALEXANDER LEITHAUSER,
Appellee,
and
GAIL LEITHAUSER,
Other Party.
Before: SWARTZLE, P.J., and CAMERON and PATEL, JJ.
PER CURIAM.
In this probate action, appellant Joyce Leithauser appeals the probate court’s June 2021
order, which awarded Kurt Leithauser’s remaining share from Gene L. Leithauser’s Trust to
appellee Alexander Leithauser. We affirm.
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I. BACKGROUND
In 1997, Gene L. Leithauser (the settlor) executed the trust at issue in this case. The trust
was created for the benefit of the settlor’s wife, Emilie Leithauser (Emilie), during her lifetime.
The settlor died in 2018. The settlor was survived by Emilie and their three children: Janis M.
Brennen (the trustee), Gail Leithauser, and Kurt Leithauser (Kurt). When Emilie died in February
2020, she was survived by the same three children. In May 2020, the trustee made a partial
distribution of the trust assets to the three children. Kurt died before he received his entire share
of the trust assets. Kurt was survived by appellant, who is Kurt’s wife and the personal
representative of Kurt’s estate, and appellee, who is Kurt’s son. Appellant and appellee disputed
who was entitled to Kurt’s remaining share.
In March 2021, the trustee filed a petition, requesting that the probate court determine the
proper beneficiary of Kurt’s remaining share of the trust assets.. To determine the proper
distribution of the assets in question, the trustee requested that the probate court interpret Article
VII(E)(4)(b) of the trust, which provides: “If any of the Settlor’s children shall die before
termination of the trust and its distribution thereof, the share herein provided for the deceased child
shall be held in a ‘Grandchildren’s Trust.’ ” The probate court interpreted this Article to mean
that, because Kurt did not survive the termination and distribution of the trust assets, the remainder
of Kurt’s share must be distributed to appellee through a grandchildren’s trust. This appeal
followed.
II. STANDARD OF REVIEW
“We review de novo a probate court’s construction and interpretation of the language used
in a will or a trust. When construing a trust, a court’s sole objective is to ascertain and give effect
to the intent of the settlor.” In re Stillwell Trust, 299 Mich App 289, 294; 829 NW2d 353 (2012).
(quotation marks and citations omitted). “This intent is gauged from the trust document itself,
unless there is ambiguity.” In re Kostin, 278 Mich App 47, 53; 748 NW2d 583 (2008). “A court
may not construe a clear and unambiguous [document] in such a way as to rewrite it, and, where
possible, each word should be given meaning. . . .” In re Estate of Reisman, 266 Mich App 522,
527; 702 NW2d 658 (2005) (quotation marks, citations, and alteration omitted).1 “The word ‘shall’
is generally used to designate a mandatory provision. . . .” American Federation of State, Co &
Muni Employees v Highland Park Bd of Edu, 214 Mich App 182, 186; 542 NW2d 333 (1995).
The word “and” is a conjunction that means “with,” “as well as,” and “in addition to. . . .”
Amerisure Ins Co v Plumb, 282 Mich App 417, 428; 766 NW2d 878 (2009). “When given its
plain and ordinary meaning, the word ‘and’ between two phrases requires that both conditions be
met.” Id.1
“The rules in interpreting contracts are equally applicable to interpreting wills,” Czapp v Cox,
179 Mich App 216, 219; 445 NW2d 218 (1989), and “[t]he rules of construction applicable to
wills also apply to the interpretation of trust documents,” In re Estate of Reisman, 266 Mich App
at 527. Thus, when interpreting the trust instrument, we will at times refer to authority that
interprets contracts and wills.
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III. ANALYSIS
Appellant argues that the probate court erred because the unambiguous trust language
requires Kurt’s remaining share to be distributed to his estate. We disagree.
Article VII(E) of the trust provides:
4. TERMINATION OF TRUST: After the death of the Settlor’s spouse, the
trust shall terminate and shall be distributed as follows:
(a) DIVISION OF TRUST ESTATE: The trust estate shall be divided into
three shares; 50% of the trust estate shall be paid to the Settlor’s daughter, JANIS
M. BRENNEN[;] 25%[ ] to the Settlor’s daughter GAIL ANN LEITHAUSER; and
25% to the Settlor’s son, KURT J. LEITHAUSER.
(b) DEATH OF A CHILD: If any of the Settlor’s children shall die before
termination of the trust and its distribution thereof, than [sic] the share herein
provided for the deceased child shall be held in a “Grandchildren’s Trust” as
provided hereafter in subparagraph (c).
Thus, the settlor intended for the trust to terminate after Emilie’s death2 and for the trustee
to distribute the remainder of the trust estate to the settlor’s children, as outlined in the trust
instrument. However, in order to be entitled to their shares, the settlor’s children had to survive
the termination of the trust and the distribution of the trust estate.
The trust instrument does not define “distribution.” Therefore, it is proper to consult
dictionary definitions. Citizens Ins Co v Pro-Seal Serv Group, Inc, 477 Mich 75, 84; 730 NW2d
682 (2007). “Distribute” is defined as “to divide and give out in shares; allot,” Random House
Webster’s College Dictionary (2005), “to give out or deliver esp. to members of a group,”
Merriam-Webster’s Collegiate Dictionary (11th ed), and “[t]o . . . disperse,” Black’s Law
Dictionary (7th ed).
In this case, it is undisputed that Kurt died before his remaining share was given to him.
Because Kurt died before the distribution of the trust estate was complete, the trust instrument
requires Kurt’s remaining share to “be held in a ‘Grandchildren’s Trust’. . . .” Although appellant
argues that Kurt had a vested interest in his entire share at the time of Emilie’s death, appellant
disregards the fact that the trust instrument required Kurt to survive both the termination of the
trust and “its distribution. . . .” To conclude that Kurt only had to survive Emilie’s death would
require us to disregard the plain language of the trust instrument, which we are not permitted to
do. Northline Excavating, Inc v Livingston Co, 302 Mich App 621, 627-628; 839 NW2d 693
(2013) (“We must give effect to every word, phrase, and clause in [an instrument] and avoid an
2
Under MCL 700.7410(1), “a trust terminates to the extent the trust . . . expires pursuant to its
terms. . . .”
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interpretation that would render any part of the [instrument] surplusage or nugatory.”) (Quotation
marks and citation omitted).
Additionally, as noted by the probate court, the trust instrument clearly reflects that the
settlor’s intent was to provide for living relatives. For example, Article VII(E)(4)(c)(4) provides:
PRIOR DEATH: In the event that a grandchild being the child of the
Settlor’s deceased child shall die before attaining age twenty-five (25) years then
such grandchild’s separate share shall be distributed and allocated equally to the
separate share Trusts so set up for the Settlor’s living grandchildren being the
children of the Settlor’s deceased child, if such separate share Trusts are still in
existence, otherwise outright to those living grandchildren whose Trusts have
terminated. [Emphasis added.]
There is no indication anywhere in the trust instrument that the settlor intended to provide
for the spouse of a deceased child through a devise to the deceased child’s estate. In fact, the
settlor only intended to provide for someone other than a child or a grandchild if “no
beneficiary . . . [was] living” “at the time of the termination of [the] trust. . . .” Article
VII(E)(4)(c)(5). In such a case, the settlor directed that “all of the remaining principal and accrued
and undistributed income of [the] trust . . . be distributed to those persons who would be entitled
to the distribution of the property of the Settlor, and in such shares, had the Settlor died at that time
intestate and a resident of the State of Michigan.” Article VII(E)(4)(c)(5). Thus, the probate court
did not err by concluding that the trust instrument was unambiguous and that Kurt’s remaining
share must be held in a “Grandchildren’s Trust.” Given this holding, we need not address the
parties’ remaining arguments.
Affirmed.
/s/ Brock A. Swartzle
/s/ Thomas C. Cameron
/s/ Sima G. Patel
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