STATE TREASURER V GEORGE W HAYDEN
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
STATE TREASURER,
UNPUBLISHED
May 13, 2008
Plaintiff-Appellant,
v
GEORGE W. HAYDEN, JESSICA HAYDEN,
and ALICIA HAMMOND,
No. 277138
Jackson Circuit Court
LC No. 06-002982-CZ
Defendants,
and
COMERICA BANK SUCCESSOR TRUSTEE for
the KULA HAYDEN IRREVOCABLE TRUST,
Defendant-Appellee.
Before: Wilder, P.J., and O’Connell and Whitbeck, JJ.
PER CURIAM.
Plaintiff appeals as of right from the trial court’s order granting defendant Comerica
Bank’s motion for summary disposition pursuant to MCR 2.116(C)(10). Plaintiff filed this
action seeking reimbursement from the Kula Hayden Irrevocable Trust (“Trust”) for defendant
George Hayden’s (“Hayden”) costs of care while in a state correctional facility pursuant to the
State Correctional Facility Reimbursement Act (SCFRA), MCL 800.401, et seq. Defendant
moved for summary disposition on the grounds that the trust was both discretionary and included
a spendthrift trust, making it inaccessible by the State to satisfy the support obligation. The trial
court found that the Trust language gave the trustee “sole and absolute discretion,” thereby
creating a discretionary trust and leaving plaintiff unable to reach the assets. We affirm.
We review de novo decisions on motions for summary disposition made under MCR
2.116(C)(10). Dressel v Ameribank, 468 Mich 557, 561; 664 NW2d 151 (2003). Under MCL
800.403(2), the attorney general must seek reimbursement if a prisoner has “sufficient assets” to
cover not less than ten percent of the cost of care and has the discretion to seek reimbursement if
the amount will be less than ten percent. State Treasurer v Cuellar, 190 Mich App 464, 467; 476
NW2d 644 (1991). Assets are defined under the statute to include “property, tangible or
intangible, real or personal, belonging to or due a prisoner or former prisoner including income
or payment to such prisoner from . . . any other source whatsoever.” MCL 800.401a(a). Hayden
-1-
is a beneficiary of the Trust created by his mother. The parties agree that if Hayden is the
beneficiary of a discretionary trust, plaintiff is not entitled to reimbursement for the costs of his
care. See Miller v Dep’t of Health, 432 Mich 426, 427; 442 NW2d 617 (1989). This is because
“a discretionary trust cannot be reached by creditors because the beneficiary has no ascertainable
interest in the assets.” In re Hertsberg Intervivos Trust, 457 Mich 430, 433; 578 NW2d 289
(1998), citing Miller, supra at 431.1 Accordingly, the only question is whether the trial court
properly determined that the Trust at issue was a discretionary trust. Plaintiff contends that the
Trust is not discretionary and that Hayden’s interest in ascertainable, making it an asset as
defined by SCFRA. We disagree.
When construing a trust, the court’s objective is to effectuate the settlor’s intent by
looking to the trust instrument “to determine the powers and duties of the trustees and the
settlor’s intent regarding the purpose of the trust’s creation and its operation.” In re Butterfield
Estate, 418 Mich 241, 259-260; 341 NW2d 453 (1983). Where the trust language is
unambiguous, the settlor’s intent must be gathered from the four corners of the trust document.
In re Maloney Trust, 423 Mich 632, 639; 377 NW2d 791 (1985); In re Woodworth Trust, 196
Mich App 326, 327; 492 NW2d 818 (1992).
Our Supreme Court has recognized three types of trusts:
Firstly, a trust vesting in the beneficiary the right to receive some ascertainable
portion of the income or principal. Secondly, a trust providing that the trustee
shall pay so much of the income or principal as is necessary for the education or
support of the beneficiary, called a support trust. Thirdly, a trust providing that
the trustee may pay to the beneficiary so much of the income or principal as he in
his discretion determines, called a discretionary trust. [Miller, supra at 429.]
The Trust makes specific reference to Hayden’s incarceration. The provisions of the
Trust currently in effect are contained under the heading “During the Incarceration of Settlor’s
Son” in section 6(d)(1) and provide that “[t]he Trustee may, in its sole and absolute discretion,
distribute income and/or principal to or for the benefit of the Settlor’s son . . .” (emphasis added).
This language creates a discretionary trust. Id. at 429. Moreover, section 6(d)(1)(c) provides
“the Trustee shall not distribute income and/or principal for care or services which, in the
absence of this trust, would be paid by any State . . . correctional facility.” The language clearly
evidences an intent by the settlor to make the funds unreachable by plaintiff.
Certain language in the Trust upon which plaintiff relies is contained in section 6(d)(2)
captioned, “Upon the Release From Incarceration of the Settlor’s Son.” Because Hayden is still
incarcerated, these provisions are inapplicable. The possibility exists that Hayden could pass
away prior to the expiration of his incarceration, such that the provisions never come into effect.
The trial court even noted that if Hayden were to petition the trial court for access to the funds, it
would be required to deny the request based on the plain language of the Trust. Because Hayden
1
Only where the beneficiary is also the settlor of the trust is this rule inapplicable. Id. at 433434. Because Hayden’s mother was the settlor of the Trust, this exception does not apply.
-2-
had no enforceable interest in the trust, there were no assets for plaintiff to reach. Id. at 430-431.
Additionally, the Trust language in the post-incarceration section again provides that “[t]he
Trustee may, in its sole and absolute discretion, distribute, preferable directly to providers, such
portions of the income at any time and from time to time for the benefit of the Settlor’s son . . .”
(emphasis added). Even the language that “[t]he Trustee shall distribute to the Settlor’s son . . .
an amount each week which in the Trustee’s judgment constitutes a modest income to
supplement the Settlor’s son’s other income” reflects a requirement that the trustee exercise
discretion. Should Hayden receive a substantial income from another source, the trustee could
determine under the Trust language that $0 is the weekly amount that constituted a modest
income. See In re Sykes Estate, 131 Mich App 49, 55-56; 345 NW2d 642 (1983). Accordingly,
we conclude that the trial court properly found the Trust to be discretionary and properly granted
summary disposition on that basis.2
Affirmed.
/s/ Kurtis T. Wilder
/s/ Peter D. O’Connell
/s/ William C. Whitbeck
2
Contrary to plaintiff’s assertion, Converson v Kellogg, 136 Mich App 504; 357 NW2d 705
(1984), is inapplicable to the case at bar, as the holding relies on law related specifically to trust
claims involving alimony and child support, neither of which is at issue here. Id. at 513.
-3-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.