Probate: trusts; uniform statutory rule against perpetuities; revise to reflect limitation of the personal property trust perpetuities act to certain property. Amends secs. 3 & 5 of 1988 PA 418 (MCL 554.73 & 554.75). TIE BAR WITH: HB 4033'25
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Overview
This bill modifies Michigan’s law regarding the ‘rule against perpetuities,’ which limits how long property interests can be held by a trust. Specifically, it changes the application of this rule to personal property trusts, narrowing the timeframe for assessing whether a trust is unduly long-lived. The changes aim to provide greater flexibility in how these trusts are structured and administered, particularly concerning transfers to previously funded trusts.
Key provisions
- Section 3(2) clarifies the creation date of nonvested property interests in trusts where a single person controls the ultimate benefit.
- Section 3(3) specifies that a nonvested property interest in a trust arising from a transfer is created when the original interest was created.
- Section 5(1)(a) exempts certain transfers, including premarital agreements, divorce settlements, and contracts related to wills and trusts, from the rule against perpetuities.
- Section 5(1)(b) exempts a fiduciary’s powers related to managing assets and property.
- Section 5(1)(f) excludes interests and powers of appointment subject to the Personal Property Trust Perpetuities Act from the rule against perpetuities.
- Section 5(2) modifies the timeframe for determining whether the rule against perpetuities applies to interests created by a ‘second power’ within a personal property trust, shortening it to 360 years.
- Section 3(1) states that the creation date of a property interest is determined by statutory or common law unless otherwise specified.
Bill text
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- House Introduced Bill
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Sponsors
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5 on record
Primary sponsor
Douglas Wozniak
Cosponsors
Joseph Aragona
Timothy Beson
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