Interpreting a restated trust; Ambiguity; Trust reformation; Stay of proceedings; Medical University of South Carolina (MUSC)

The court concluded that the probate court erred in holding “that the 2012 restated trust was ambiguous, requiring further interpretation.” It also erred in deciding appellee-Kystad’s petition for instructions as to real estate after the court imposed a stay of proceedings. Thus, the court reversed the order interpreting the restated trust and vacated the probate court’s opinion and order as to the petition for instructions. “For the language to be ambiguous, it would have [to] support two different meanings: (1) that the numerator of the fraction for determining the value of the Family Trust is the amount that will be able to pass free of estate tax when the settlor dies; or (2) that the numerator is the amount that would pass free of estate tax if the settlor died at the time the trust was executed. Even if the future-tense meaning of ‘shall’ were disregarded in favor of the mandatory/must meaning, Article III would still derive the numerator from ‘the largest value . . . that can pass free of the federal estate tax.’” There was “no language in the 2012 restated trust that fixes the numerator as the value that would pass free of the federal estate tax if [the decedent] died in 2012.” Thus, the language supported “only the first meaning.” The probate “court erred in finding ambiguity and in resolving the issue in” appellee-MUSC’s favor. Appellants next argued “that reformation of the 2012 restated trust was improper under MCL 700.7412 and MCL 700.7415. While these issues were raised in the proceedings below, the probate court did not specifically consider them, because it found the 2012 restated trust ambiguous.” Given that the court’s opinion reversed that conclusion, it remanded “this issue to the probate court for a decision on whether reformation is appropriate.”