The Asset, Not the Trust.

On July 20, 2026, the Michigan Supreme Court answered it in In re Estate of Fowler: neither asset was available to the creditor. In re Fowler Estate, Mich. Sup. Ct. No. 167501 (July 20, 2026); see also In re Estate of Jennifer L. Fowler; In re Jennifer L. Fowler Trust, ___ Mich App ___ (2024) (Docket Nos. 365600, 365603, 365610) (per curiam, published July 18, 2024) (the decision below). The descriptions of the Supreme Court’s reasoning in this note rely on published summaries of the opinion — O’Reilly Rancilio P.C., Michigan Supreme Court Strengthens Protection for Trust Assets Against Creditors (Aug. 24, 2026), and Griffin Bridgers, Collection Against Post-Death Proceeds Payable to a Revocable Trust: In re Fowler — and readers should consult the slip opinion for its precise language.

One early write-up ran under that first headline. O’Reilly Rancilio, supra. The reading is understandable, but it misses the point. The trust did not protect anything in Fowler. The assets carried their own protection, and the trust was only the route they took. The difference matters, because clients regularly assume that putting property “in a trust” protects it, and the kind of trust most families actually hold does nothing of the sort.

The facts are grim, and the courts described them with restraint. In 2018 Jennifer Fowler was acting as patient advocate for her 79-year-old mother, Helen, who had dementia and lived in an assisted-living facility. On November 10, 2018, Jennifer took Helen from the facility to her own home, where, in the Court of Appeals’ words, she “fatally shot both Helen and herself.” Court of Appeals slip op, supra, at 2–3. Helen’s estate, through another daughter as personal representative, sued Jennifer’s estate for wrongful death. A jury awarded $557,105, and the final judgment, with costs, interest and case-evaluation sanctions, came to $623,606.24. Id. at 3.

Jennifer’s probate estate was not enough. Her trustee filed a declaratory action in the St. Clair Probate Court asking which trust assets could be used to pay the judgment. Two assets were in dispute:

• Life insurance. Jennifer was the insured under an employer policy issued by Metropolitan Life, which named her trust as beneficiary. MetLife paid $438,385.20 to the trust. Id.
• The 401(k). Jennifer took part in her employer’s qualified savings plan and had named the trust as beneficiary. Under the plan’s terms, the remaining benefit became payable in a lump sum after her death. Id. at 3–4.

The probate court split the difference. It held the 401(k) exempt but let the creditor reach the insurance. In a published opinion on July 18, 2024, the Court of Appeals went further against the trust. It affirmed as to the insurance and reversed as to the 401(k), so both assets became available to Helen’s estate. Id. at 2, 11–12. The Supreme Court then reversed and held both assets exempt.

The case turns on MCL 700.7605, Michigan’s version of a rule found in most Uniform Trust Code states. Subsection (1) provides that the property of a trust the settlor could revoke at death is subject to the settlor’s estate’s administration expenses, creditor claims, and statutory allowances, “but only to the extent that the settlor’s property subject to probate administration is insufficient.” MCL 700.7605(1), as quoted in Court of Appeals slip op, supra, at 4–5.

That sentence is the lesson most readers will skip. A revocable trust protects nothing from the settlor’s own creditors. While the settlor lives, the assets are the settlor’s in every sense a creditor cares about. At death, statutes like § 7605(1) make the trust the backstop for whatever the probate estate cannot pay. The trust in Fowler argued that the insurance could not be “property of a trust” under subsection (1) because it only arrived after Jennifer died. The Court of Appeals rejected that argument, reasoning that “[n]othing in the language of MCL 700.7605(1) limits its scope to property that only became trust property before a settlor’s death.” Id. at 9. Reported summaries indicate that the Supreme Court also accepted the general rule that post-death proceeds paid into a revocable trust fall within the statute. The trust won only because a specific exception applied to each asset. O’Reilly Rancilio, supra; Bridgers, supra.

So the trust itself was not the shield. It was the exposure.

The 401(k). Subsection (2) provides that a trust established as part of, “and all payments from,” a qualified § 401 plan — along with § 403 annuities, § 408 IRAs, and Keogh plans — “shall not be considered to be a trust described in subsection (1).” MCL 700.7605(2), as quoted in Court of Appeals slip op, supra, at 5. The Court of Appeals had read around this. It reasoned that ERISA’s anti-alienation protection ends once a plan pays out, and that a lump sum payable to a trust after death “can no longer be considered a retirement account.” Id. at 5–6 (citing 29 USC 1056(d)(1); DaimlerChrysler Corp v Cox, 447 F3d 967, 974 (CA 6, 2006); State Treasurer v Abbott, 468 Mich 143; 660 NW2d 714 (2003)). It relied heavily on a Kansas decision, Commerce Bank, NA v Bolander, 44 Kan App 2d 1; 239 P3d 83 (2007), which treated retirement-account exemptions as personal protections that die with the account owner. The Supreme Court focused instead on the words “all payments from” and held that the 401(k) proceeds fell within subsection (2). Bridgers, supra; O’Reilly Rancilio, supra.

The life insurance. Subsection (4) excludes from the creditor pool property that “would not have been subject to a claim against the settlor’s estate if it had been paid directly to a trust created under the settlor’s will or other than to the settlor’s estate.” MCL 700.7605(4), as quoted in Court of Appeals slip op, supra, at 11. That sent the courts to Michigan’s Insurance Code, MCL 500.2207(2). That section lets the lawful beneficiary of a policy take the proceeds against the insured’s creditors, unless the beneficiary is the insured or the insured’s “executors or administrators.” Id. at 9–10. The Court of Appeals had reasoned that a trust that would administer the proceeds was functionally the same as an executor. The Supreme Court disagreed: a trustee is not an executor or administrator, those terms carry distinct definitions in Michigan law, and the insurance would have been protected had it been paid anywhere other than to the estate. Bridgers, supra (the Court “rejected the argument that a trustee functions equivalently to an executor or administrator”).

Both holdings come down to reading a statute’s text. Neither says anything about trusts as a protective device. Each says that a particular class of asset keeps a legislatively granted protection when it reaches a revocable trust by beneficiary designation.

Fowler ended well for Jennifer’s trust beneficiaries. It is still a poor model, for three reasons.

First, the answer depended on a court of last resort. The probate court, the Court of Appeals and the Supreme Court each read the same two statutory provisions, and they reached three different combinations of results. For roughly seven years, from the May 2019 claim to the July 2026 decision, nobody could say with confidence who owned the money. Court of Appeals slip op, supra, at 3 (claim filed May 2019). Protection that has to be won in the state supreme court is litigation risk, not protection.

Second, the answer is Michigan’s. Protection here came from MCL 700.7605(2) and (4) and MCL 500.2207, not from any general principle. Other states’ versions of the revocable-trust creditor rule have different exceptions, or none. Bolander, the Kansas case the Court of Appeals followed, reached the opposite result on a retirement account payable to a revocable trust. Bolander, 44 Kan App 2d at 17–19. A family that moves, or holds assets governed by another state’s law, takes on that state’s text. Federal law can also cut the other way once an account is inherited. In Clark v. Rameker, 573 U.S. 122 (2014), the U.S. Supreme Court held that an inherited IRA is not an exempt “retirement fund” in the beneficiary’s own bankruptcy. An asset that is protected on its way into a trust can be exposed once it comes out.

Third, the Court of Appeals pointed to a simpler answer. On the insurance, the panel observed that Jennifer “could have named the individual beneficiaries of her trust as direct beneficiaries of the life insurance policy to avoid this asset from being subject to her creditors’ claims, but she did not do so.” Court of Appeals slip op, supra, at 10 (citing Ionia Co Savings Bank v McLean, 84 Mich 625, 629–630; 48 NW 159 (1891)). Naming a revocable trust as beneficiary is often sensible for other reasons, such as minors, spendthrift heirs, or blended families. But that choice routed the money through the one vehicle that a statute specifically exposes to the decedent’s creditors, and turned a settled question into a contested one.

The broader lesson is about where protection actually sits. Three places matter, and a revocable trust is none of them.

The asset’s own statutory character. Qualified plans, IRAs, and life insurance each carry exemptions set by statute. Those exemptions are real and valuable. But they belong to the asset and are defined by whichever statute applies, so they need to be checked, not assumed, whenever the asset is re-titled or re-designated, or the family moves.

Beneficiary designations as structural documents. In Fowler, a form completed at an employer’s benefits office decided a six-figure outcome. Designations should be reviewed with the same care as the trust instrument: who is named, what happens if a named beneficiary dies first — the plan’s own default in Fowler would have paid the beneficiary’s estate, Court of Appeals slip op, supra, at 4 — and whether naming a trust exposes the asset to a creditor rule that direct designation would avoid. Where a trust is the right recipient, the drafting and the governing statute should confirm that the asset’s protection survives the transfer.

A completed, irrevocable transfer made well before any claim. This is the only one of the three that does not depend on an exemption statute. A revocable trust is exposed under § 7605(1) because the settlor could take the property back until the day of death. Property that left the settlor years earlier is different. If it went to an irrevocable, discretionary trust, administered by a trustee who is not the settlor under another name, it was never “property of a trust over which the settlor has the right … to revoke.” MCL 700.7605(1). A creditor attacking that transfer has to bring a fraudulent-transfer case and prove its elements against a transfer that predates the claim. That is a far harder case than simply invoking a backstop statute. Whether any particular transfer is vulnerable under fraudulent- or voidable-transfer law depends on its timing, the transferor’s solvency, and the other facts; that analysis is separate from, and harder for a creditor than, the revocable-trust backstop rule.

The Fowler claim also illustrates why that timing cannot be improvised. The liability arose from a single catastrophic act, with no dispute, warning, or negotiation beforehand. Nothing arranged after that point could have changed who was owed what. The only planning that mattered was planning already in place.

Nothing here argues against revocable trusts. They do what they are designed to do: avoid probate, provide continuity if the settlor loses capacity, and keep affairs private. The error is expecting them to do something else. A family relying on a revocable trust should understand three things. The trust assets are available to the settlor’s creditors during life. At death, statutes like § 7605(1) keep them available as a backstop. And any protection that survives comes from exemptions attached to particular assets, not from the trust.

Where creditor exposure is a genuine concern, whether from a profession, a business, or ordinary life, the question to ask is not whether there is a trust. It is which assets are protected, by what, and since when. Fowler shows how much can depend on the answer.

The Michigan Supreme Court got to a sound result in Fowler, and Michigan practitioners now have clearer guidance on routing retirement and insurance proceeds through revocable trusts. But the decision is best read as a warning. It took a probate trial, a published appellate reversal, and a supreme court decision to confirm that two ordinary assets kept the protection the legislature had given them. The trust holding them contributed nothing to that result except a place to argue.

Protection that has to be litigated is weaker than protection built into the structure from the start. The durable version is irrevocable, discretionary, independently administered, and in place long before anyone has a claim.

This note is general commentary on a published decision and is not legal advice for any particular person or matter. The treatment of trusts, retirement accounts and insurance proceeds differs from state to state and turns on the specific facts, plan terms and beneficiary designations involved; it should be assessed with qualified counsel.