If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports.

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### S T A T E O F M I C H I G A N

C O U R T O F A P P E A L S

In re RAYMOND J. RECH LIVING TRUST.

JENNIFER LANGREET and MICHAEL ROCHELEAU,

Appellees, UNPUBLISHED July 14, 2022

v No. 358754

Macomb Probate Court HEIDI AULL, Successor Trustee

, LC No. 2021

- 236162

- TV

Appellant.

Before: S HAPIRO

, P .J., and R ICK and G ARRETT , JJ.

P ER C URIAM

.

Raymond Rech created a trust with conflicting provisions as to the distribution of proceeds upon the death of Alma Rocheleau , one of four beneficiaries

. In resolving the ambiguity, t he probate court ordered distribution of the proceeds to Alma’s heirs. T he probate court improperly

discounted an affidavit from the attorney who draft ed Rech’s estate plan , whic h stated that Rech

intended Alma’s remaining proceeds to be distributed upon her death to the other beneficiaries

— three charities. The court also misapplied the rules of construction to the language of the trust. Accordingly, w e reverse and remand for entry of an order distributing the proceeds to the charities.

I. FACTUAL AND PROC EDURAL BACKGROUND

This case concerns the Raymond J. Rech Living Trust (the Trust)

, created i n October 2003

and amended and restated in July 2016 b y Rech . Article Seven, Section 1 of the T rust lists four

beneficiaries: Rech ’ s sister, Alma Rocheleau; San Franc e sco Church of Clinton Township, Michigan; Pi m e Missionaries of Detroit, Michigan; and St. Jude Children ’s Research Hospital of Memphis, Tennes see. This section also states that upon Rech’s death

, “all trust property not previously distributed under the terms of the trust shall be divided into separate trusts,” with trust shares equally divided among the four beneficiaries. Article Seven, Secti on 1 further provides that “[e]ach trust share established under this Section 1 shall be named for the beneficiary for whom- 2

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established and shall be held, administered, and distributed in accordance with the relevant provisions of Section 2 of this Article

. ”

Section 2 of Article Seven states, in relevant part: “ Upon the death of Alma O. Rocheleau, any part of the trust property still held in trust shall be distributed to the other beneficiaries named in Section 1 above as the Grantor has provided for the m. ” However, Section 3 of Article Seven

states :

Each trust established for a deceased beneficiary shall be held, administered, and

distributed as follows : . . .

[T] he Trustee shall distribute the trust established for a deceased beneficiary to the then living descendants, per stirpes, [ 1 ] of such deceased beneficiary. ” [ 2 ]

Rech passed away on March 23, 2019, and Alma passed away on September 17, 2020. In
December 2020, appellees

, Alma’s grandchildren and heirs, petitioned the probate court for

“ instruction on their possible beneficiary status, ” arguing that they stood to inherit Alma’s share

of the Trust under Section 3. Appellant responded to the petition and req uest ed that the probate
court instead divide Alma’s sub

- trust into three equal shares for the named beneficiaries under the language of Section 2. At a hearing on September 14, 2021, the probate court concluded in part:

Okay, I ’ m holding that because . .

. the death of a beneficiary could only apply to Alma [Rocheleau] that the provisions of Article 7, Section 3 must apply. . . .

Obviously there is a conflict. It ’ s almost impossible to resolve, but I believe that a better practice is always to go when there is a conflict to the plain words of the document and the Rule of Construction here is that, I ’ m going to the last stated position of the Settl[o]r.

Consequently , the court entered an order “ directing that the trust held for the benefit of Alma

Roche leau shall be distributed to her heirs at law . . . . ” This appeal followed.

II. STANDARD OF REV IEW AND INTERPRETIVE PRINCIPLES

We review “ de novo the proper interpretation of a trust. ” In re Stan Estate , 301 Mich App 435, 442; 839 NW2d 498 (2013). We also review de novo the decision whether a trust is ambiguous. In re Bem Estate , 247 Mich App 427, 433; 637 NW2d 506 (2001). “De novo review means that we review the legal issue independently” and without deference to the trial court.
W right v Genesee Co , 504 Mich 410, 417; 934 NW2d 805 (2019). In addition:

1 “If a governing instrument calls for property to be distributed ‘per stirpes’, the property is divided into as many equal shares as there are surviving children of the designated ancestor and deceased children who left surviving descendants.” MCL 700.271 8(2).

2 Any forthcoming references to Sections 1, 2, and 3 refer only to those sections in Article Seven

of the Trust.- 3

- This Court reviews the probate court ’ s findings of fact for clear error. A factual finding is clearly erroneous when this Court is left with a defin ite and firm

conviction that a mistake has been made. The probate court ’ s decisions are generally reviewed for an abuse of discretion. An abuse of discretion occurs when the decision resulted in an outcome falling outside the range of principled

outcomes . An error of law necessarily constitutes an abuse of discretion. [ In re Huntington Estate , ___ Mich App ___, ___; ___ NW2d ___ (2021) (Docket No. 354006); slip op at 4

- 5 (quotation marks and citations omitted) .]

The purpose of interpreting a trust is “ to ascertain and give effect to the intent of the

settlor. ” Stan Estate , 301 Mich at 442. “ Interpretation begins with an examination of the trust language, and if there is no ambiguity, the trust terms are interpreted according to the plain and ordinary meaning. ” Le Gassick v Univ of Mich Regents , 330 Mich App 487, 496; 948 NW2d 452 (2019) (citations omitted). However, if “ the trust ’ s terms are ambiguous, a court must look outside

the document to determine the settlor ’ s intent, and it may consider the c ircumstances surrounding the creation of the trust and the general rules of construction. ” Bill & Dena Brown Trust v Garcia

, 312 Mich App 684, 693; 880 NW2d 269 (2015).

I II . ANALYSIS

Appellant argues the probate court erred in determining Alma ’s trust s hare was to be distributed to appellees rather than to the three named charities in the T rust

. 3

This case involves a dispute over two conflicting trust provisions. On one hand, Article Seven, Section 2 states: “ Upon the death of Alma O. Rocheleau, any pa rt of the trust property still

held in trust shall be distributed to the other beneficiaries named in Section 1 above as the Grantor has provided for them. ” The other beneficiaries named in Section 1 are the three charities. On the other hand, Article Se ven, Section 3 states: “ [T]he Trustee shall distribute the trust established for a deceased beneficiary to the then living descendants, per stirpes, of such deceased beneficiary. ” Appellant argues that Article Seven, Section 2 is unambiguous because the Trust specifically provides that Alma’s sub

- trust will be distributed to the other named beneficiaries upon her death. But when considered alongside Article Seven, Section 3, an ambiguity arises. Section 2 provides that the proceeds of Alma’s sub

- trust pass to the charities, but Section 3

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3 Appellees argue that appellant lacks standing to pursue this appeal because, as the t rustee rather than a beneficiary, appellant is n ot an “interested person aggrieved” by the probate court’s order under MCR 5.801. Not only did appellees fail to challenge appellant’s standing in the probate court, but they affirmatively waived this argument by listing appellant in their petition for

in struction on beneficiary status as an “interested person[] to this petition.” See Hodge v Parks

, 303 Mich App 552, 556; 844 NW2d 189 (2014). In any event, appellant has standing as trustee to appeal what she believes to be an erroneous interpretation of the Trust. See MCR 5.125(C)(33)(c) (listing the “current trustee” as an interested person in a proceeding affecting the trust other than proceedings covered by other subrules ). See also In re Perry Tr ust

, 299 Mich App 525, 529; 831

NW2d 251 (2013) (holdi ng that trustee had standing to appeal because of the trustee’s “ duty to ensure that the Trust is properly administered according to its terms and for the benefit of all its

beneficiaries ”).- 4

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which could only apply to Alma as the sole deceased beneficiary

— designates her remaining trust property be distributed to her heirs. Therefore, the probate court did not err by concluding that the conflicting provision s created an ambiguity.

W hen a trust contains an ambiguity, a reviewing court “ must look outside the document to

determine the settlor ’ s intent, ” and in doing so, “ may consider the circumstances surrounding the

creation of the trust .” Brown Trust , 312 Mi ch App at 693. See also Zurich Ins Co v CCR & Co (On Rehearing)

, 226 Mich App 599, 607; 576 NW2d 392 (1997) (providing that a reviewing court “must inquire” into the “circumstances or relations of the parties underlying the contract” if those

circumstance s or relations “resolve th[e] ambiguity” at issue). B ecause there was an ambiguity in

the T rust that could not be resolved by looking within the four corners of the document, the probate

court needed to consider the circumstances surrounding the creation of the trust.

In her response to appellees’ petition for instruction on beneficiary status, appellant
submitted an affidavit from Julius H. Giarmarco. Giarmarco was Rech’s attorney

, drafted Rech’s estate plan , and met with Rech before the execution of th e Trust

. Giarmarco stated that Rech had
“clear intentions as it related to the distribution of his estate.” Specifically, Giarmarco averred that

“ Rech’s intent was that any portion of Alma ’s trust that was not distributed to her outright during her life[ ] was to be redistributed to the . . . charities upon her death . . . .” In addition, Giarmarco stated: “[I]t was not Raymond Rech’s intent that any portion of his trust be distributed to the
descendants of Alma Rocheleau.” Giarmarco averred that Article Seven, Section 3 was not included in the Trust “to refer to Alma Rocheleau’s distributive share,” but rather to “govern[] the administration of a trust for a deceased beneficiary if such trust is created by another section” of

the Trust

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T he probate co urt largely discounted consideration of the affidavit , an error that led to an erroneous interpretation of the Trust . The probate court first stated that the law disfavors extrinsic

evidence

. T o the extent this is accurate

, this principle does not apply when interpreting ambiguous provisions of a trust. See Brown Trust , 312 Mich App at 693. In such a case, extrinsic evidence is not disfavored, but can be integral to determining the settlor’s intent. Later, the probate court
stated that although the aff idavit did “shed some light” on the issue, it did not matter what Giarmarco thought because Rech “is the person whose intent is really at issue here.” We agree that Rech’s intent is what matters. Yet there is no evidence that the contents of the affidavi t reflect only Giarmarco’s impression of Rech’s intent. After all, Giarmarco met with Rech and worked

with him to create his estate plan. In addition, Giarmarco’s statements align with the plain text of Article Seven, Sections 1 and 2, which state that Alma ’s share was to be distributed to the three

charities on her death. And since these Trust provisions conflicted with Article Seven, Section 3,

the affidavit fro m Giarmarco provided some of the best

— if not only

— available evidence of what

Rech actually intended for the distribution of Alma’s trust property upon her death. Therefore, the

trial court erroneously discounted the relevance of the affidavit in determini ng the proper interpretation of the Trust.

Further, in concluding that Alma’s trust proceeds should pass to appellees, the probate

court looked to rules of construction. See Brown Trust , 312 Mich App at 693. The probate court

relied on a rule from Fos ter v Stevens , 146 Mich 131, 139; 109 NW 265 (1906), which states: “It

is a well

- established rule of construction that, if two clauses in a will are absolutely irreconcilable,- 5

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the last prevails, as being the latest expression of the testator’s wishes.” 4 B ecause Article Seven, Section 3 came after Article Seven, Sections 1 and 2 in the Trust , the probate court determined that Rech’s “last stated position” should control.

Appellants make two arguments that the probate court erred in its application of the rules of construction. First, appellants contend that the “last statement” rule from Foster did not apply here. Appellants point to Foster ’s discussion of a “superior rule ”:

[W] here one estate is given in one part of an instrument in clear and decisive t erms, such estate cannot be taken away or cut down by raising a doubt upon the extent or meaning or application of a subsequent clause, nor by inference therefrom, nor by any subsequent words that are not as clear and decisive as the words of the clause gi ving that estate . [ Foster , 146 Mich at 140 (emphasis added).]

Thus, subsequent language should not override earlier clear language where the later language is not “clear, decisive, and unequivocal.” Id . The Foster Court did not apply this “superior rule ”

because it found the later language of the will at issue to be “clear, decisive, and unequivocal.” Id

. H ere, on the other hand, the language of Article Seven, Section 3

— the later provision

— is not “clear, decisive, and unequivocal,” particularly as comp ared to the earlier, more specific provisions

on the distribution of Alma’s trust proceeds. Accordingly , the probate court erred when it relied

on the rule of construction from Foster to conclude that Section 3 controlled and that Alma’s sub

trust proceed s should pass to her grandchildren.

Second, appellants argue that the probate court should have employed the rule that specific provisions control over general provisions related to the same subject matter. Since Article Seven, Section 2 specifically a pplies to Alma’s sub

- trust, while Article Seven, Section 3

, speaks in general

terms about any deceased beneficiary , appellants contend that Section 2 should control. We decline to apply this rule here because our review of caselaw ha s found the rule only applied to cases involving contracts or statutes, not wills or trusts. See, e.g., TOMRA of North America , Inc, v Dep’t of Treasury

, 505 Mich 333, 350 ; 952 NW2d 384 (2020) (quotation marks and citations omitted) (“ [W]here a statute contains a general provision and a specific provision, the specific provision controls.” ); Village of Edmore v Crystal Automation Sys

, Inc , 322 Mich App 244, 263; 911 NW2d 241, 252 (2017 ) (“[W]here a contract contains specific and general terms, the specific terms normally c ontrol over the general terms.”)

. In any event, this canon of construction is

unnecessary to our disposition of the case.

Ultimately, we must read the T rust as a whole, “ harmonizing its terms with the intent expressed ” by the settlor. Brown Trust , 312 Mich App at 694. Here , the probate court’s interpretation of the Trust fails to harmonize the instrument with the evidence presented of Rech’s

intent. The affidavit from Rech’s attorney provided the only evidence reconciling the ambiguity

in the Trust a nd explaining Rech’s intent , and t he probate court did not suggest any basis for doubting the credibility of the affidavit’s assertions. Nor did any rule of construction mandate the

4 “ The rules of construction applicable to wills also apply to th e interpretation of trust documents.”

In re Reisman Estate , 266 Mich App 522, 527; 702 NW2d 658 (2005).- 6

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probate court’s result. Therefore, interpreting the Trust to require distribution of Alma’s sub

- trust
to the three charities is the appropriate way to resolve the ambiguity.

Accordingly, we reverse and remand for an order distributing the proceeds of Alma’s sub

trust to the other named beneficiaries. We do not retain ju risdiction.

/s/ Douglas B. Shapiro

/s/ Michelle M. Rick

/s/ Kristina Robinson Garrett