HOUSE BILL No. 6366

 

August 30, 2006, Introduced by Rep. Schuitmaker and referred to the Committee on Judiciary.

 

     A bill to amend 1998 PA 386, entitled

 

"Estates and protected individuals code,"

 

by amending sections 2702 and 2722 (MCL 700.2702 and 700.2722),

 

section 2702 as amended by 2000 PA 54.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2702. (1) For the purposes of this act, except as

 

provided in subsection (4), an individual who is not established by

 

clear and convincing evidence to have survived an event, including

 

the death of another individual, by 120 hours is considered to have

 

predeceased the event.

 

     (2) Except as provided in subsection (4), for purposes of a

 

provision of a governing instrument that relates to an individual

 

surviving an event, including the death of another individual, an

 

individual who is not established by clear and convincing evidence


 

to have survived the event by 120 hours is considered to have

 

predeceased the event.

 

     (3) Except as provided in subsection (4), if it is not

 

established by clear and convincing evidence that 1 of 2 co-owners

 

with right of survivorship survived the other co-owner by 120

 

hours, 1/2 of the co-owned property passes as if 1 had survived by

 

120 hours and 1/2 as if the other had survived by 120 hours. If

 

there are more than 2 co-owners and it is not established by clear

 

and convincing evidence that at least 1 of them survived the others

 

by 120 hours, the property passes in the proportion that 1 bears to

 

the whole number of co-owners. For the purposes of this subsection,

 

"co-owners with right of survivorship" includes joint tenants,

 

tenants by the entireties, and other co-owners of property or

 

accounts held under circumstances that entitles 1 or more to the

 

whole of the property or account on the death of the other or

 

others.

 

     (4) Survival by 120 hours is not required under any of the

 

following circumstances:

 

     (a) The governing instrument contains language dealing

 

explicitly with simultaneous deaths or deaths in a common disaster

 

and that language is operable under the facts of the case. Language

 

dealing explicitly with simultaneous deaths includes language in a

 

governing instrument that creates a presumption that applies if the

 

evidence is not sufficient to determine the order of deaths.

 

     (b) The governing instrument expressly indicates that an

 

individual is not required to survive an event, including the death

 

of another individual, by any specified period or expressly


 

requires the individual to survive the event by a specified period.

 

Survival of the event or the specified period, however, must be

 

established by clear and convincing evidence.

 

     (c) The imposition of a 120-hour requirement of survival would

 

cause a nonvested property interest or a power of appointment to

 

fail to qualify for validity under section 2(1)(a), (2)(a), or

 

(3)(a) of the uniform statutory rule against perpetuities, 1988 PA

 

418, MCL 554.72, or to become invalid under section 2(1)(b),

 

(2)(b), or (3)(b) of the uniform statutory rule against

 

perpetuities, 1988 PA 418, MCL 554.72.

 

     (c)  (d)  The application of a 120-hour requirement of

 

survival to multiple governing instruments would result in an

 

unintended failure or duplication of a disposition. Survival,

 

however, must be established by clear and convincing evidence.

 

     Sec. 2722. (1) Subject to subsection (3), if a trust is for a

 

specific lawful noncharitable purpose or for lawful noncharitable

 

purposes to be selected by the trustee, and if there is no definite

 

or definitely ascertainable beneficiary designated, the trust may

 

be performed by the trustee for 21 years, but no longer, whether or

 

not the terms of the trust contemplate a longer duration.

 

     (2) Subject to this subsection and subsection (3), a trust for

 

the care of a designated domestic or pet animal is valid. The trust

 

terminates when no living animal is covered by the trust. A

 

governing instrument shall be liberally construed to bring the

 

transfer within this subsection, to presume against the merely

 

precatory or honorary nature of the disposition, and to carry out

 

the general intent of the transferor. Extrinsic evidence is


 

admissible in determining the transferor's intent.

 

     (3) In addition to the provisions of subsection (1) or (2), a

 

trust covered by either of those subsections is subject to the

 

following provisions:

 

     (a) Except as expressly provided otherwise in the trust

 

instrument, no portion of the principal or income may be converted

 

to the use of the trustee or to a use other than for the trust's

 

purposes or for the benefit of a covered animal.

 

     (b) Upon termination, the trustee shall transfer the

 

unexpended trust property in the following order:

 

     (i) As directed in the trust instrument.

 

     (ii) If the trust was created in a nonresiduary clause in the

 

transferor's will or in a codicil to the transferor's will, under

 

the residuary clause in the transferor's will.

 

     (iii) If no taker is produced by the application of subparagraph

 

(i) or (ii), to the transferor's heirs under section 2720.

 

     (c) For the purposes of sections 2714 to 2716, the residuary

 

clause is treated as creating a future interest under the terms of

 

a trust.

 

     (d) The intended use of the principal or income can be

 

enforced by an individual designated for that purpose in the trust

 

instrument or, if none, by an individual appointed by a court upon

 

petition to it by an individual.

 

     (e) Except as ordered by the court or required by the trust

 

instrument, no filing, report, registration, periodic accounting,

 

separate maintenance of funds, appointment, or fee is required by

 

reason of the existence of the fiduciary relationship of the


 

trustee.

 

     (f) The court may reduce the amount of the property

 

transferred if it determines that that amount substantially exceeds

 

the amount required for the intended use. The amount of the

 

reduction, if any, passes as unexpended trust property under

 

subdivision (b).

 

     (g) If a trustee is not designated or no designated trustee is

 

willing or able to serve, the court shall name a trustee. The court

 

may order the transfer of the property to another trustee if the

 

transfer is necessary to ensure that the intended use is carried

 

out, and if a successor trustee is not designated in the trust

 

instrument or if no designated successor trustee agrees to serve or

 

is able to serve. The court may also make other orders and

 

determinations as are advisable to carry out the intent of the

 

transferor and the purpose of this section.

 

     (h) The trust is not subject to the former uniform statutory

 

rule against perpetuities, 1988 PA 418.  , MCL 554.71 to 554.78.

 

     Enacting section 1.  This amendatory act does not take effect

 

unless Senate Bill No.____ or House Bill No. 6365(request no.

 

07009'06) of the 93rd Legislature is enacted into law.