March 18, 2008, Introduced by Reps. Meisner and Schuitmaker and referred to the Committee on Judiciary.
A bill to exclude certain personal property held in trust from
the rule against perpetuities and similar rules that potentially
affect the duration of trusts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"personal property trust perpetuities act".
Sec. 2. As used in this act:
(a) "First power" means a nonfiduciary, nongeneral power of
appointment over personal property held in trust that is exercised
so as to subject the property to, or to create, a second power.
(b) "Nonfiduciary" means, with respect to a power of
appointment, that the power of appointment is not held by a trustee
in a fiduciary capacity.
(c) "Second power" means a nonfiduciary power of appointment
over personal property held in trust that is created or to which
property is subjected by the exercise of a first power and that is
not a presently exercisable general power.
(d) "Uniform statutory rule against perpetuities" means the
uniform statutory rule against perpetuities, 1988 PA 418, MCL
554.71 to 554.78.
Sec. 3. (1) Except as provided in subsection (3), an interest
in, or power of appointment over, personal property held in trust
is not invalidated by a rule against any of the following:
(a) Perpetuities.
(b) Suspension of absolute ownership.
(c) Suspension of the power of alienation.
(d) Accumulations of income.
(2) Except as provided in subsection (3), all of the following
may be indefinitely suspended, postponed, or allowed to go on with
respect to personal property held in trust:
(a) The vesting of a future interest.
(b) The satisfaction of a condition precedent to the exercise
of a general power of appointment.
(c) The exercise of a nongeneral or testamentary power of
appointment.
(d) Absolute ownership.
(e) The power of alienation.
(f) Accumulations of income.
(3) If a first power is exercised so as to subject the
property to, or to create, a second power, the period during which
the vesting of a future interest in the property may be postponed
by the exercise of the second power shall be determined under the
uniform statutory rule against perpetuities by reference to the
time the first power was created. A nonvested interest, general
power of appointment not presently exercisable because of a
condition precedent, or nongeneral or testamentary power of
appointment created, or to which property is subjected, by the
exercise of the second power is invalid, to the extent of the
exercise of the second power, unless the interest or power
satisfies the uniform statutory rule against perpetuities measured
from the time of the creation of the first power.
Sec. 4. This act applies only to a nonvested interest in, or
power of appointment over, personal property held in a trust that
is either revocable on, or created after, the effective date of
this act.
Enacting section 1. This act does not take effect unless House
Bill No. 4602 of the 94th Legislature is enacted into law.