                           STATE OF MICHIGAN

                            COURT OF APPEALS



In re ESTATE AND TRUST OF ROBERT E.
WHITTON.


MOLLY MICHALUK,                                                      UNPUBLISHED
                                                                     August 9, 2018
               Petitioner-Appellant,

v                                                                    No. 341737
                                                                     Oakland Probate Court
EDDIE WHITTON and RICHARD WHITTON,                                   LC Nos. 2015-365021-DE;
Personal Representatives of the ESTATE OF                                    2016-372116-TV
ROBERT E. WHITTON, and Successor Trustees
of the ROBERT E. WHITTON REVOCABLE
TRUST,
              Respondents-Appellees.


Before: RIORDAN, P.J., and K. F. KELLY and BOONSTRA, JJ.

PER CURIAM.

        Petitioner appeals by right the probate court’s order (1) denying her petition for
immediate distribution under the Robert E. Whitton Trust (the trust), and (2) denying her petition
for a determination that her distribution should not be reduced by any taxes. We affirm.

                   I. PERTINENT FACTS AND PROCEDURAL HISTORY

       Petitioner’s father, Robert E. Whitton, created the trust in 1992, which was then restated
in 2003. Article VII of the trust governs how certain assets of the trust are to be distributed after
Whitton’s death, and provides that petitioner is to receive 33% of certain investment accounts.
Whitton died in 2015. In 2017, petitioner filed a petition for the immediate distribution of her
share of the trust assets. She also filed a petition asking that the probate court order that she had




                                                -1-
no obligation to pay any portion of the taxes due on the estate, and that she be immediately be
given her entire distributive share without any reduction for taxes.1

       The probate court denied both of petitioner’s petitions, stating:

               The language of the Trust is clear and unambiguous. Article VII, 1, A
       states that the Comerica Securities Accounts are to be distributed as directed by
       the Trust “after reducing such account by the federal and state estate or
       inheritance taxes on Grantor’s estate attributable to such assets.” This provision
       does not direct that the estate taxes are to be paid from these shares. It states that
       the amount of the bequest is the value of the shares after first being reduced by the
       amount of the federal and state estate or inheritance taxes attributable to those
       accounts. This provision does not conflict with the Will’s direction that the estate
       taxes are to be paid from any residuary estate.

               Petitioner is requesting an immediate distribution of her bequest, however
       she has not provided the Court with the amount of the federal and state estate or
       inheritance tax to determine the amount of her bequest. Accordingly, the Court
       cannot grant the relief she is requesting.

       This appeal followed.

                                 II. STANDARD OF REVIEW

        “[A]t any time after an action has commenced, if the pleadings show that a party is
entitled to judgment as a matter of law, the court must render judgment without delay.
MCR 2.116(I)(1). In that regard, if no factual dispute exists, a trial court is required to dismiss
an action when a party is entitled to judgment as a matter of law, and a motion for summary
disposition is unnecessary.” In re Baldwin Trust, 274 Mich App 387, 398-399; 733 NW2d 419
(2007), aff’d 480 Mich 915 (2007). In this case, neither party moved for summary disposition.
However, both parties briefed the relevant questions, and the probate court, concluding that no
relevant factual questions existed, interpreted the trust and rendered judgment. We thus treat the
issue as having been decided under MCR 2.116(I)(1).

        This Court “review[s] de novo a trial court’s conclusion that a [party] is entitled to
judgment as a matter of law under MCR 2.116(I)(1).” Kenefick v Battle Creek, 284 Mich App
653, 654; 774 NW2d 925 (2009). This Court reviews de novo questions regarding the proper
interpretation of statutes and court rules, Bint v Doe, 274 Mich App 232, 234; 732 NW2d 156
(2007), as well as the proper interpretation of a will, Estate of Stan, 301 Mich App 435, 442; 839
NW2d 498 (2013).


1
  In Docket No. 337828, petitioner has filed a second appeal that addresses whether the probate
court properly denied her petition for “instructions” regarding whether petitioner would violate
an in terrorem clause in the trust were she to file a petition seeking to modify the distributive
terms of the trust. That issue is not before us in this appeal.


                                                -2-
                                          III. ANALYSIS

       Petitioner argues on appeal that the probate court erred by determining that the language
of the trust required that the amount of relevant taxes be deducted from her bequest, and
therefore by not immediately ordering the distribution of her share. We disagree.

        “In resolving a dispute concerning the meaning of a trust, a court’s sole objective is to
ascertain and give effect to the intent of the settlor.” In re Kostin Estate, 278 Mich App 47, 53;
748 NW2d 583 (2008). “This intent is gauged from the trust document itself, unless there in
ambiguity.” Id. Thus, the specific words of a trust are the primary, and often only, source used
by courts of this state to ascertain the settlor’s intent. In re Perry Trust, 299 Mich App 525, 530;
831 NW2d 251 (2013); Kostin Estate, 278 Mich App at 53. “The rules of construction
applicable to wills also apply to the interpretation of trust documents.” In re Reisman Estate,
266 Mich App 522, 527; 702 NW2d 658 (2005). When interpreting a will, and thus a trust,
courts may not rewrite clear and unambiguous language. Id. “[W]here possible, each word
should be given meaning.” Id. The language of a will, and thus a trust, “must be read as a
whole . . . .” Townsend v Gordon, 308 Mich 438, 444; 14 NW2d 57 (1944).

         The issue before us in this appeal boils down to whether petitioner is entitled to a
distribution from the trust with or without reduction for taxes. This requires our review of the
pertinent governing instruments, i.e., Whitton’s trust and will. Relevant here is the following
trust language:

                                           ARTICLE VII

         A. Comerica Account [XXXXXXXXX].2 If, at the time of Grantor’s death
         there are assets in Grantor’s Comerica Securities accounts no. [XXXXXXX] and
         ORA-[XXXXX] (herein the “Comerica Securities Accounts”) then the Successor
         Trustees shall, after reducing such account by the federal and state estate or
         inheritance taxes on Grantor’s estate attributable to such assets, take the actions
         specified below in paragraph (1) through (4). Provided, however, if there is no
         such brokerage account at the time of Grantor’s death then this bequest shall lapse
         and have no further force or effect on the remainder of Grantor’s estate or the
         division of the remainder of the trust.

                                               * * *

                 (2) Trust for Molly Michaluk. After Grantor’s death, if Grantor’s
         daughter, Molly Kay Michaluk, is then living, the Successor Trustees shall place
         into a separate trust for her benefit (the “Molly Michaluk Trust”) an amount equal
         to Thirty Three percent (33%) of the value of the stock and other securities in the
         Comerica Securities Accounts as of the date of Grantor’s death.



2
    This Court has redacted the account numbers contained in the trust.


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                                             * * *

               (4) Remainder of Comerica Trust Account. The remainder of the
       Comerica Securities Account including accrued but undistributed income shall be
       transferred and held and administered with the rest, residue and remainder of the
       trust under the following Paragraph B of this Article VII.

       B. Residuary Assets. After Grantor’s death and completion of the allocation to
       separate trusts of the amounts determined under paragraph A, subparagraphs (1),
       (2), (3) and (4) of this Article VII, the Successor Trustees shall divide the rest,
       residue and remainder of the assets of Grantor’s Trust into equal shares, one for
       each of the following[.][3]

       Article X of the trust directs respondents, as successor trustees, to pay Whitton’s debts
and other expenses, including taxes imposed on Whitton’s estate:

                                          ARTICLE X

                                             * * *

       C. Debts of the Grantor, administration expenses attributable to the death of the
       Grantor, and death taxes imposed upon the estate of the Grantor which are the
       legal obligation of the trust estate under state or federal law, or the terms of this
       Agreement, shall be paid by the Successor Trustee. Further, if the Successor
       Trustee considers it to be in the best interest of the Grantor’s estate, heirs or the
       beneficiaries of any trust created by this Agreement, the Successor Trustee may
       pay any portion of an estate, inheritance or succession tax (including interest or
       other additions thereto) that may be attributable to any of the assets belonging to
       or passing to any trust created by this Agreement, whether or not such tax is
       imposed upon such assets by law, and the Successor Trustee may pay any such
       tax which is directed by Will to be paid from the residue of Grantor’s estate; in all
       such instances, however, such payments shall be made from assets which are not
       included in Grantor’s estate for federal estate tax purposes; and if the Trust holds
       any U.S. Treasury Bonds that may be redeemed at par in payment of the federal
       estate tax, the Successor Trustee shall pay the federal estate tax with such bonds
       to the extent of the face amount of such bonds plus accrued interest to the date of
       redemption. The Successor Trustee shall pay all necessary and proper
       disbursements, expenses and liabilities in the administration of the trusts
       hereunder, including reasonable compensation of the Successor Trustee or its
       Successor.



3
  Portions of the residuary assets provision are redacted from the documents provided to the
probate court and this Court.



                                               -4-
       Whitton’s will provides in relevant part:

                                            ARTICLE I

                  I direct that all my legal debts, the expenses of my last illness, funeral and
       burial expenses, and the expenses of administering my estate, together with all
       estate, inheritance, legacy, succession or similar duties or taxes which shall
       become payable in respect of any property, or interest therein, which I may own at
       the time of my death, and which is properly included in my gross estate for any
       such taxation purposes, shall be charged to and paid from my residuary estate to
       the extent of such estate, as such and then to the extent of assets allocable or
       available to the Trust Agreement referred to in Article III, and if such allocable or
       available assets are not sufficient for the payment of such debts, taxes, expenses,
       etc., then my Personal Representative shall seek recovery or reimbursement from,
       or apportionment between or among the recipients of any devises; provided,
       however, that my Personal Representative shall be required to direct the payment
       of any taxes from the assets included in my gross estate for federal estate tax
       purposes which assets are held by any trust created by me during my lifetime and
       which trust includes U.S. Treasury Bonds that may be redeemed at par in payment
       of the federal estate tax. Any generation skipping tax assessed against a taxable
       distribution or taxable termination shall be charged against the transferred
       property and shall be paid by the fiduciary responsible for paying over such
       tax. . . .

                                               * * *

                                           ARTICLE III

               I give, devise and bequeath all the rest, residue and remainder of my
       property of whatever kind . . . all of which is herein referred to as my residuary
       estate, to my brothers, RICHARD WHITTON and EDDIE WHITTON, or their
       successors in trust, as Successor Trustees under a certain Agreement of Trust
       dated November 6, 1992 as amended and restated, most recently of even date
       herewith, executed by me as Grantor, to be held, managed and distributed upon
       the terms, provisions and conditions as provided in such Agreement of Trust as it
       now exists or as it may subsequently be amended. By this gift and devise it is my
       intention to enlarge the trust so created . . . .

       Petitioner argued in the probate court that, under Whitton’s will, the estate was
responsible for paying taxes. The probate court, in its order denying the petitions, did not
disagree, but identified the issue before it not as that of determining who is responsible for the
payment of taxes, but rather as calculating petitioner’s bequest. We agree with the approach and
determination of the probate court.

        Petitioner refers this Court to MCL 700.3921(4) and MCL 700.3922(2) and argues that
these statutes require the estate (rather than her) to pay the taxes on her bequest.


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       MCL 700.3921(4) provides:

       A direction to allocate and pay tax contained in a will is effective to allocate and
       pay tax even if the will does not control the devolution of property at death with
       respect to which the tax is being levied, including a direction in a will to allocate
       and pay tax from a trust of which the testator was the settlor and that was
       revocable by the settlor, or would have been revocable if the settlor was not
       incapacitated, until the settlor’s death. If there is a conflict between directions in
       a will to allocate and pay tax and the terms of another governing instrument, the
       directions in the will control.

       MCL 700.3922(2) provides:

       Unless otherwise directed by the governing instrument, the personal
       representative shall pay the tax out of the estate, or if a personal representative is
       not acting under appointment, a person receiving or holding an interest generating
       the tax shall pay the tax.

Petitioner argues that these statutes indicate that there are no taxes attributable to her share of the
accounts at issue (such that there would be no reduction under Paragraph A of Article VII of the
trust). Specifically, petitioner maintains that because Whitton’s will requires that taxes be paid
out of the estate’s residuary, and the will controls over the trust (even in the presence of a
conflict), the taxes must be paid from the residuary of the estate. See Detroit Bank & Trust Co v
Grunewald, 26 Mich App 495, 499; 182 NW2d 628 (1970) (“[W]here the directive clause of a
trust conflicts with the unambiguous language of a will, the language of the will controls and
payment of taxes should be made in accordance with the will.”).

       Whitton’s will does direct that applicable taxes be paid out of the estate’s residuary. That
does not mean, however, that there are no taxes attributable to petitioner’s bequest.
MCL 700.3920(1)(b) makes it explicit that even if a tax is paid by the residuary of the estate, a
portion of it may be “attributable” to a specific bequest:

       (b) If a part of the property concerning which the tax is levied or assessed is held
       under the terms of an inter vivos trust, then, unless the governing instrument
       directs otherwise, the tax shall be charged as follows:
       (i) If a portion of the trust is directed to pass or to be held in further trust by
       reference to a specific property or type of property, fund, money, or other
       nonresiduary form, the net amount of the tax attributable to that portion shall be
       charged to and paid from the principal of the residuary share of the trust without
       requiring contribution from a person receiving or benefiting from the
       nonresiduary interest and without apportionment among the residuary
       beneficiaries. If the residuary share of the trust is insufficient to pay the tax
       attributable to all nonresiduary interests, the balance of the tax shall be
       apportioned pro rata among the recipients of those interests generating the tax
       based on the value of those interests. [MCL 700.3920(1)(b)(i) (emphasis added).]



                                                 -6-
Therefore, petitioner is correct that both the will and MCL 700.3920 provide that the taxes owed
must be paid from the estate’s residuary. And she is also correct that the trust directs successor
trustees, not petitioner, to effect payment of the taxes owed by the estate.                   But
MCL 700.3920(1)(b)(i) also indicates that, despite the source of payment of the taxes being the
estate’s residuary without apportionment among beneficiaries, an amount of tax may still be
“attributable” to a specific bequest.

        Because an amount of tax may be attributed to the value of the Comerica account, there is
no conflict between the trust, the will, and the relevant statutes. Nothing in the trust or will
obligates petitioner to actually pay, on behalf of the estate, any of the taxes attributable to any
portion of the Comerica account. Rather, the question is how to calculate petitioner’s bequest
and distribution under the terms of the trust.

        Paragraph A(2) of Article VII of the trust directs respondents, as successor trustees, to
“place into a separate trust” for petitioner’s benefit “an amount equal to Thirty Three percent
(33%) of the value of the stock and other securities in the Comerica Securities Accounts as of the
date of Grantor’s death.”4 If one reads only this language in isolation, it would appear that
petitioner is to receive a percentage of the value of the Comerica accounts “as of the date of
Grantor’s death.” No qualification is made that this amount is to be reduced by a proportionate
share of taxes, or by any other figure.

        But this reading of paragraph A(2) ignores what comes before it. This Court must
interpret the trust as a whole, Townsend, 308 Mich at 444, giving meaning to every word to the
extent that is possible, Reisman Estate, 266 Mich App at 527. Paragraph A of Article VII earlier
explains that before taking any of the actions to be specified later in the trust, including the very
creation of the trust for petitioner’s benefit (under paragraph A(2) ), the successor trustees are to
“reduc[e] such account [(i.e., the Comerica accounts)] by the federal and state estate or
inheritance taxes on Grantor’s estate attributable to such assets . . . .” The only way to give this
language meaning is to first reduce the value of the Comerica accounts before calculating the
amount of the bequest to be placed into trust for petitioner’s benefit. The key trust language is
that requiring that the reduction (for taxes) occur before taking any further actions under the
trust. If we were to adopt petitioner’s reading of the trust, this language would have no effect,
because petitioner’s share, and that of anyone else receiving a specific bequest under Article VII,
would be determined in advance of the reduction that the trust requires occur beforehand.5 We


4
  We note that the trust itself also recognizes that taxes may be “attributable” to bequests such as
petitioner’s. The trust documents provide that “if the Successor Trustee considers it to be in the
best interest of the Grantor’s estate, heirs or the beneficiaries of any trust created by this
Agreement, the Successor Trustee may pay any portion of an estate, inheritance or succession tax
(including interest or other additions thereto) that may be attributable to any of the assets
belonging to or passing to any trust created by” the trust agreement. (Emphasis added.)
5
  This language of the trust does not conflict with the will’s directive that taxes owed by the
estate be paid out of the residuary; rather, the trust directs the successor trustees to determine the
amount of petitioner’s bequest by first reducing (by the amount of attributable taxes) the account


                                                 -7-
decline to render a portion of the trust language nugatory, and therefore affirm the probate
court’s decision. The probate court correctly determined that the relevant accounts needed to be
reduced before calculating, establishing in trust, and distributing petitioner’s bequest. It
therefore also did not err by failing to immediately order the distribution of petitioner’s bequest
when it lacked the necessary information by which to do so.

       Affirmed.



                                                            /s/ Michael J. Riordan
                                                            /s/ Kirsten Frank Kelly
                                                            /s/ Mark T. Boonstra




from which the bequest derives, and by leaving that amount in the residuary of the estate for
payment of taxes according to the will.


                                                -8-
