Court of Appeals Overrules Tax Tribunal
In Kalanquin v. Township of Richfield, Michigan Court of Appeals, No. 297342, May 19, 2011, the Court of Appeals ruled the Michigan Tax Tribunal erroneously uncapped the taxable value of property, resulting in a higher local property tax assessment, because it failed to apply the terms of the relevant statutory exception pertaining to a transfer of ownership. Whether a property's taxable value remained capped was intrinsically linked to whether there was a transfer of ownership, but the tribunal's decision dealt only with broad generalizations about the exemptions dealing with testamentary transfers and transfers via trust instruments.
The plain terms of the applicable statutory exception clearly provided that a transfer of ownership did not include a transfer pursuant to a judgment or order of a court of record making or ordering a transfer, unless a specific monetary consideration was specified or ordered by the court for the transfer. In this case, the decedent's personal representatives initiated probate proceedings, and the probate court ordered that the property be transferred from the decedent's living trust to the decedent's testamentary trust. A probate court was clearly a court of record because it had the same powers as the circuit court to hear and determine any matter and make any proper orders to fully effectuate the probate court's jurisdiction and decisions. Therefore, this case did not involve a transfer of ownership.