Probate: trusts; powers of appointment; revise. Amends secs. 5a & 14 of 1967 PA 224 (MCL 556.115a & 556.124).
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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 revises the rules surrounding powers of appointment within trusts in Michigan. It clarifies how a trustee can exercise a discretionary power to appoint assets to a second trust, outlining specific conditions that must be met. The bill also addresses how a second trust created through this process is treated, including notice requirements and potential fees. Finally, it modifies the rules governing the suspension or postponement of future interests related to powers of appointment.
Key provisions
- Clarifies conditions for a trustee to exercise a discretionary power to appoint assets to a second trust.
- Defines how a second trust created through this process is treated under Michigan law.
- Specifies when a discretionary power to make distributions is considered ‘presently exercisable.’
- Addresses the creation and treatment of a second power of appointment when one is exercised.
- Modifies the rules for suspending or postponing the vesting of future interests related to powers of appointment.
- Establishes that a second trust created under this bill is treated as both a new irrevocable trust and a continuation of the first trust for certain notice requirements.
- Defines the terms ‘first power’ and ‘second power’ in the context of powers of appointment.
- Specifies that a trust created by exercising a power of appointment is created when the power is irrevocably exercised or when a revocable exercise becomes irrevocable.
Bill text
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