The New Michigan Trust Code Takes Effect April 1, 2010
Probate Codes were developed as people started to use wills. Trust codes are being developed in several states as more people are using trusts.
Attorneys in the Probate & Estate Planning Section of the Michigan State Bar have worked for over six-years drafting the new Michigan Trust Code (MTC).
The new Michigan Trust Code provides Michigan with its first comprehensive statute governing the creation, administration, termination, and modification of trusts. It provides us with a comprehensive codification of the law of trusts in Michigan. It preserves much of our current statutory and common trust law and fills in many of the gaps in the current law.
It strengthens the use of discretionary distribution powers in trusts, which I call “lids & faucets” and have been using since 2002.
The Michigan legislature has approved the MTC. Our Governor signed the new Michigan Trust Code into law on June 18, 2009. It takes effect April 1, 2010.
Highlights of the new Michigan Trust Code include:
- recognition of nonjudicial settlement agreements
- expanded representation rules
- comprehensive rules for the termination and modification of trusts
- codification of rules concerning the rights of creditors of beneficiaries of trusts
- a series of special provisions related solely to revocable trusts, including a new standard of capacity to make a trust (and will) and a new statute of limitations for challenges to revocable trusts
- comprehensive rules related to the appointment, removal, and succession of trustees and the relationship among co-trustees