SB-1376, As Passed House, December 2, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 1376

 

 

June 8, 2010, Introduced by Senators CROPSEY and STAMAS and referred to the Committee on Judiciary.

 

 

 

      A bill to amend 1998 PA 386, entitled

 

"Estates and protected individuals code,"

 

by amending sections 1209, 2519, 3207, 7105, 7411, 7414, 7817,

 

7821, and 7910 (MCL 700.1209, 700.2519, 700.3207, 700.7105,

 

700.7411, 700.7414, 700.7817, 700.7821, and 700.7910), sections

 

1209, 2519, and 7105 as amended and sections 7411, 7414, 7817,

 

7821, and 7910 as added by 2009 PA 46 and section 3207 as added

 

by 2006 PA 299, by amending the headings of the parts of article

 

VII, by amending the heading of article VIII, and by designating

 

sections 8101 and 8102 as part 1 and sections 8201 to 8206 as

 

part 2 of article VIII and adding headings for those parts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

 1        Sec. 1209. For the purpose of granting consent or approval

 

 2  with regard to the acts or accounts of a personal representative,


 

 1  including relief from liability or penalty for failure to post

 

 2  bond or to perform other duties, the sole holder or all coholders

 

 3  of a presently exercisable or testamentary general or special

 

 4  power of appointment, including 1 in the form of a power of

 

 5  amendment or revocation, are deemed to act for beneficiaries to

 

 6  the extent their interests, as permissible appointees, takers in

 

 7  default, or otherwise, are subject to the power. and to the

 

 8  extent there is no conflict of interest between the holder and

 

 9  the persons represented.

 

10        Sec. 2519. (1) A will executed in the form prescribed by

 

11  subsection (2) and otherwise in compliance with the terms of the

 

12  Michigan statutory will form is a valid will. A person printing

 

13  and distributing the Michigan statutory will shall print and

 

14  distribute the form verbatim as it appears in subsection (2). The

 

15  notice provisions shall be printed in 10-point boldfaced type.

 

16        (2) The form of the Michigan statutory will is as follows:

 

 

17                   MICHIGAN STATUTORY WILL NOTICE

 

 

18        1. An individual age 18 or older who has sufficient mental

 

19  capacity may make a will.

 

20        2. There are several kinds of wills. If you choose to

 

21  complete this form, you will have a Michigan statutory will. If

 

22  this will does not meet your wishes in any way, you should talk

 

23  with a lawyer before choosing a Michigan statutory will.

 

24        3. Warning! It is strongly recommended that you do not add

 

25  or cross out any words on this form except for filling in the

 


 1  blanks because all or part of this will may not be valid if you

 

 2  do so.

 

 3        4. This will has no effect on jointly held assets, on

 

 4  retirement plan benefits, or on life insurance on your life if

 

 5  you have named a beneficiary who survives you.

 

 6        5. This will is not designed to reduce estate taxes.

 

 7        6. This will treats adopted children and children born

 

 8  outside of wedlock who would inherit if their parent died without

 

 9  a will the same way as children born or conceived during

 

10  marriage.

 

11        7. You should keep this will in your safe deposit box or

 

12  other safe place. By paying a small fee, you may file this will

 

13  in your county's probate court for safekeeping. You should tell

 

14  your family where the will is kept.

 

15        8. You may make and sign a new will at any time. If you

 

16  marry or divorce after you sign this will, you should make and

 

17  sign a new will.

 

 

18                           INSTRUCTIONS:

 

 

19        1. To have a Michigan statutory will, you must complete the

 

20  blanks on the will form. You may do this yourself, or direct

 

21  someone to do it for you. You must either sign the will or direct

 

22  someone else to sign it in your name and in your presence.

 

23        2. Read the entire Michigan statutory will carefully before

 

24  you begin filling in the blanks. If there is anything you do not

 

25  understand, you should ask a lawyer to explain it to you.

 

 


     MICHIGAN STATUTORY WILL OF  ________________________________

                                (Print or type your full name)

                    ARTICLE 1. DECLARATIONS

     This is my will and I revoke any prior wills and codicils.

I live in ___________________________ County, Michigan.

My spouse is ___________________________________________.

               (Insert spouse's name or write  "none")

My children now living are:

______________________ ______________________

10 ______________________ ______________________

11 ______________________ ______________________

12 (Insert names or write "none")

13               ARTICLE 2. DISPOSITION OF MY ASSETS

14              2.1 CASH GIFTS TO PERSONS OR CHARITIES.

15                            (Optional)

 

 

16        I can leave no more than two (2) cash gifts. I make the

 

17  following cash gifts to the persons or charities in the amount

 

18  stated here. Any transfer tax due upon my death shall be paid

 

19  from the balance of my estate and not from these gifts. Full name

 

20  and address of person or charity to receive cash gift (name only

 

21  1 person or charity here):

 

 

22 ____________________________________

23 (Insert name of person or charity)

24 ____________________________________

25 (Insert address)

26 AMOUNT OF GIFT (In figures): $   ________________________________

27 AMOUNT OF GIFT (In words): ____________________________ Dollars


____________________________________

(Your signature)

Full name and address of person or charity to receive cash gift

(Name only 1 person or charity):

____________________________________

(Insert name of person or charity)

____________________________________

(Insert address)

AMOUNT OF GIFT (In figures): $   ________________________________

10 AMOUNT OF GIFT (In words): ____________________________ Dollars

11 ____________________________________

12 (Your signature)

 

 

 

13                  2.2 PERSONAL AND HOUSEHOLD ITEMS.

 

 

14        I may leave a separate list or statement, either in my

 

15  handwriting or signed by me at the end, regarding gifts of

 

16  specific books, jewelry, clothing, automobiles, furniture, and

 

17  other personal and household items.

 

18        I give my spouse all my books, jewelry, clothing,

 

19  automobiles, furniture, and other personal and household items

 

20  not included on such a separate list or statement. If I am not

 

21  married at the time I sign this will or if my spouse dies before

 

22  me, my personal representative shall distribute those items, as

 

23  equally as possible, among my children who survive me. If no

 

24  children survive me, these items shall be distributed as set

 

25  forth in paragraph 2.3.

 

 


                      2.3 ALL OTHER ASSETS.

 

 

 2        I give everything else I own to my spouse. If I am not

 

 3  married at the time I sign this will or if my spouse dies before

 

 4  me, I give these assets to my children and the descendants of any

 

 5  deceased child. If no spouse, children, or descendants of

 

 6  children survive me, I choose 1 of the following distribution

 

 7  clauses by signing my name on the line after that clause. If I

 

 8  sign on both lines, if I fail to sign on either line, or if I am

 

 9  not now married, these assets will go under distribution clause

 

10  (b).

 

11        Distribution clause, if no spouse, children, or descendants

 

12  of children survive me.

 

13        (Select only 1)

 

14        (a) One-half to be distributed to my heirs as if I did not

 

15  have a will, and one-half to be distributed to my spouse's heirs

 

16  as if my spouse had died just after me without a will.

 

 

17 _________________________________

18 (Your signature)

 

 

19        (b) All to be distributed to my heirs as if I did not have a

 

20  will.

 

 

21 _________________________________

22 (Your signature)

23                     ARTICLE 3. NOMINATIONS OF PERSONAL

24                 REPRESENTATIVE, GUARDIAN, AND CONSERVATOR

 

 


 1        Personal representatives, guardians, and conservators have a

 

 2  great deal of responsibility. The role of a personal

 

 3  representative is to collect your assets, pay debts and taxes

 

 4  from those assets, and distribute the remaining assets as

 

 5  directed in the will. A guardian is a person who will look after

 

 6  the physical well-being of a child. A conservator is a person who

 

 7  will manage a child's assets and make payments from those assets

 

 8  for the child's benefit. Select them carefully. Also, before you

 

 9  select them, ask them whether they are willing and able to serve.

 

 

10                    3.1 PERSONAL REPRESENTATIVE.

11                          (Name at least 1)

12 I nominate _____________________________________________________

13           (Insert name of person or eligible financial institution)

14 of _________________________to serve as personal representative.

15        (Insert address)

16 If my first choice does not serve, I nominate   __________________

17 ___________________________________________________________

18   (Insert name of person or eligible financial institution)

19 of________________________ to serve as personal representative.

20      (Insert address)

21                   3.2 GUARDIAN AND CONSERVATOR.

 

 

22        Your spouse may die before you. Therefore, if you have a

 

23  child under age 18, name an individual as guardian of the child,

 

24  and an individual or eligible financial institution as

 

25  conservator of the child's assets. The guardian and the

 

26  conservator may, but need not be, the same person.

 

 


     If a guardian or conservator is needed for a child of

mine, I nominate _________________________________________

                  (Insert name of individual)

of ____________________________________________ as guardian and

                  (Insert address)

________________________________________________________________

  (Insert name of individual or eligible financial institution)

of ____________________________________ to serve as conservator.

       (Insert address)

10 If my first choice cannot serve, I nominate

11 ______________________________________________

12        (Insert name of individual)

13 of ___________________________________________ as guardian and

14        (Insert address)

15 ________________________________________________________________

16   (Insert name of individual or eligible financial institution)

17 of ____________________________________ to serve as conservator.

18        (Insert address)

19                              3.3 BOND.

 

 

20        A bond is a form of insurance in case your personal

 

21  representative or a conservator performs improperly and

 

22  jeopardizes your assets. A bond is not required. You may choose

 

23  whether you wish to require your personal representative and any

 

24  conservator to serve with or without bond. Bond premiums would be

 

25  paid out of your assets. (Select only 1)

 

26        (a) My personal representative and any conservator I have

 

27  named shall serve with bond.

 

 

28 _________________________________


(Your signature)

 

 

 2        (b) My personal representative and any conservator I have

 

 3  named shall serve without bond.

 

 

_________________________________

(Your signature)

             3.4 DEFINITIONS AND ADDITIONAL CLAUSES.

 

 

 7        Definitions and additional clauses found at the end of this

 

 8  form are part of this will.

 

 9        I sign my name to this Michigan statutory will on

 

10  ______________ , 20_____.

 

 

11 _________________________________

12 (Your signature)

13                    NOTICE REGARDING WITNESSES

 

 

14        You must use 2 adults as witnesses. It is preferable to have

 

15  3 adult witnesses. All the witnesses must observe you sign the

 

16  will, have you tell them you signed the will, or have you tell

 

17  them the will was signed at your direction in your presence.

 

 

18                      STATEMENT OF WITNESSES

 

 

19        We sign below as witnesses, declaring that the individual

 

20  who is making this will appears to have sufficient mental

 

21  capacity to make this will and appears to be making this will

 

22  freely, without duress, fraud, or undue influence, and that the

 

23  individual making this will acknowledges that he or she has read


 

 1  the will, or has had it read to him or her, and understands the

 

 2  contents of this will.

 

 

_____________________________________

(Print Name)

_____________________________________

(Signature of witness)

_____________________________________

(Address)

_________________________________ ______ ______

10 (City)                          (State) (Zip)

11 _____________________________________

12 (Print name)

13 _____________________________________

14 (Signature of witness)

15 _____________________________________

16 (Address)

17 _________________________________ ______ ______

18 (City)                            (State) (Zip)

19 _____________________________________

20 (Print name)

21 _____________________________________

22 (Signature of witness)

23 _____________________________________

24 (Address)

25 _________________________________ ______ ______

26 (City)                            (State) (Zip)

27                             DEFINITIONS

 

 

28        The following definitions and rules of construction apply to

 

29  this Michigan statutory will:


 

 1        (a) "Assets" means all types of property you can own, such

 

 2  as real estate, stocks and bonds, bank accounts, business

 

 3  interests, furniture, and automobiles.

 

 4        (b) "Descendants" means your children, grandchildren, and

 

 5  their descendants.

 

 6        (c) "Descendants" or "children" includes individuals born or

 

 7  conceived during marriage, individuals legally adopted, and

 

 8  individuals born out of wedlock who would inherit if their parent

 

 9  died without a will.

 

10        (d) "Jointly held assets" means those assets to which

 

11  ownership is transferred automatically upon the death of 1 of the

 

12  owners to the remaining owner or owners.

 

13        (e) "Spouse" means your husband or wife at the time you sign

 

14  this will.

 

15        (f) Whenever a distribution under a Michigan statutory will

 

16  is to be made to an individual's descendants, the assets are to

 

17  be divided into as many equal shares as there are then living

 

18  descendants of the nearest degree of living descendants and

 

19  deceased descendants of that same degree who leave living

 

20  descendants. Each living descendant of the nearest degree shall

 

21  receive 1 share. The remaining shares, if any, are combined and

 

22  then divided in the same manner among the surviving descendants

 

23  of the deceased descendants as if the surviving descendants who

 

24  were allocated a share and their surviving descendants had

 

25  predeceased the descendant. In this manner, all descendants who

 

26  are in the same generation will take an equal share.

 

27        (g) "Heirs" means those persons who would have received your


 

 1  assets if you had died without a will, domiciled in Michigan,

 

 2  under the laws that are then in effect.

 

 3        (h) "Person" includes individuals and institutions.

 

 4        (i) Plural and singular words include each other, where

 

 5  appropriate.

 

 6        (j) If a Michigan statutory will states that a person shall

 

 7  perform an act, the person is required to perform that act. If a

 

 8  Michigan statutory will states that a person may do an act, the

 

 9  person's decision to do or not to do the act shall be made in

 

10  good faith exercise of the person's powers.

 

 

11                         ADDITIONAL CLAUSES

12                 Powers of personal representative

 

 

13        1. A personal representative has all powers of

 

14  administration given by Michigan law to personal representatives

 

15  and, to the extent funds are not needed to meet debts and

 

16  expenses currently payable and are not immediately distributable,

 

17  the power to invest and reinvest the estate from time to time in

 

18  accordance with the Michigan prudent investor rule. In dividing

 

19  and distributing the estate, the personal representative may

 

20  distribute partially or totally in kind, may determine the value

 

21  of distributions in kind without reference to income tax bases,

 

22  and may make non-pro rata distributions.

 

23        2. The personal representative may distribute estate assets

 

24  otherwise distributable to a minor beneficiary to the minor's

 

25  conservator or, in amounts not exceeding $5,000.00 per year,

 


 1  either to the minor, if married; to a parent or another adult

 

 2  with whom the minor resides and who has the care, custody, or

 

 3  control of the minor; or to the guardian. The personal

 

 4  representative is free of liability and is discharged from

 

 5  further accountability for distributing assets in compliance with

 

 6  the provisions of this paragraph.

 

 

                 POWERS OF GUARDIAN AND CONSERVATOR

 

 

 8        A guardian named in this will has the same authority with

 

 9  respect to the child as a parent having legal custody would have.

 

10  A conservator named in this will has all of the powers conferred

 

11  by law.

 

12        Sec. 3207. (1) If there is a disagreement as described in

 

13  section 3206(4) or if 1 or more of the individuals described in

 

14  section 3206(2) or (3) cannot be located, 1 or more of the

 

15  following may petition the court to determine who has the

 

16  authority to exercise the rights and powers under section

 

17  3206(1):

 

18        (a) An individual with the rights and powers under section

 

19  3206(1).

 

20        (b) A funeral establishment that has custody of the

 

21  decedent's body.

 

22        (2) Venue for a petition filed under subsection (1) is in

 

23  the county in which the decedent was domiciled at the time of

 

24  death.

 

25        (3) On receipt of a petition under this section, the court

 

26  shall set a date for a hearing on the petition. The hearing date


 

 1  shall be as soon as possible, but not later than 7 business days

 

 2  after the date the petition is filed. Notice of the petition and

 

 3  the hearing shall be served not less than 2 days before the date

 

 4  of the hearing on every individual who has highest priority as

 

 5  determined under section 3206(2) and (3), unless the court orders

 

 6  that service on every such individual is not required. Unless an

 

 7  individual cannot be located after a reasonable good-faith effort

 

 8  has been made to contact the individual, service shall be made on

 

 9  the individual personally or in a manner reasonably designed to

 

10  give the individual notice. Notice of the hearing shall include

 

11  notice of the individual's right to appear at the hearing. An

 

12  individual served with notice of the hearing may waive his or her

 

13  rights. If written waivers from all persons entitled to notice

 

14  are filed, the court may immediately hear the petition. The court

 

15  may waive or modify the notice and hearing requirements of this

 

16  subsection if the decedent's body must be disposed of promptly to

 

17  accommodate the religious beliefs of the decedent or his or her

 

18  next of kin.

 

19        (4) If a funeral establishment is the petitioner under this

 

20  section, the funeral establishment's actual costs and reasonable

 

21  attorney fees in bringing the proceeding shall be included in the

 

22  reasonable funeral and burial expenses under section 3805(b)

 

23  3805(1)(b) or the court may assess such costs and fees against 1

 

24  or more parties or intervenors.

 

25        (5) In deciding a petition brought under this section, the

 

26  court shall consider all of the following, in addition to other

 

27  relevant factors:


 

 1        (a) The reasonableness and practicality of the funeral

 

 2  arrangements or the handling or disposition of the body proposed

 

 3  by the person bringing the action in comparison with the funeral

 

 4  arrangements or the handling or disposition of the body proposed

 

 5  by 1 or more individuals with the rights and powers under section

 

 6  3206(1).

 

 7        (b) The nature of the personal relationship to the deceased

 

 8  of the person bringing the action compared to other individuals

 

 9  with the rights and powers under section 3206(1).

 

10        (c) Whether the person bringing the action is ready,

 

11  willing, and able to pay the costs of the funeral arrangements or

 

12  the handling or disposition of the body.

 

 

13                               PART 1

14                 GENERAL PROVISIONS AND DEFINITIONS

 

 

15        Sec. 7105. (1) Except as otherwise provided in the terms of

 

16  the trust, this article governs the duties and powers of a

 

17  trustee, relations among trustees, and the rights and interests

 

18  of a trust beneficiary.

 

19        (2) The terms of a trust prevail over any provision of this

 

20  article except the following:

 

21        (a) The requirements under section 7401 for creating a

 

22  trust.

 

23        (b) The duty of a trustee to administer a trust in

 

24  accordance with section 7801.

 

25        (c) The requirement under section 7404 that the trust have a

 


 1  purpose that is lawful, not contrary to public policy, and

 

 2  possible to achieve.

 

 3        (d) The power of the court to modify or terminate a trust

 

 4  under sections 7410, 7412(1) to (3), 7414(2), 7415, and 7416.

 

 5        (e) The effect of a spendthrift provision, a support

 

 6  provision, and a discretionary trust provision on the rights of

 

 7  certain creditors and assignees to reach a trust as provided in

 

 8  part 5.

 

 9        (f) The power of the court under section 7702 to require,

 

10  dispense with, or modify or terminate a bond.

 

11        (g) The power of the court under section 7708(2) to adjust a

 

12  trustee's compensation specified in the terms of the trust that

 

13  is unreasonably low or high.

 

14        (h) Except as permitted under section 7809(2), the

 

15  obligations imposed on a trust protector in section 7809(1).

 

16        (i) The duty under section 7814(2)(a) to (c) to provide

 

17  beneficiaries with the terms of the trust and information about

 

18  the trust's property, and to notify qualified trust beneficiaries

 

19  of an irrevocable trust of the existence of the trust and the

 

20  identity of the trustee.

 

21        (j) The power of the court to order the trustee to provide

 

22  statements of account and other information pursuant to section

 

23  7814(4).

 

24        (k) The effect of an exculpatory term under section 7809(8)

 

25  or 7908.

 

26        (l) The rights under sections 7910 to 7913 of a person other

 

27  than a trustee or beneficiary.

 


 1        (m) Periods of limitation under this article for commencing

 

 2  a judicial proceeding.

 

 3        (n) The power of the court to take action and exercise

 

 4  jurisdiction.

 

 5        (o) The subject-matter jurisdiction of the court and venue

 

 6  for commencing a proceeding as provided in sections 7203 and

 

 7  7204.

 

 8        (p) The requirement under section 7113 that a provision in a

 

 9  trust that purports to penalize an interested person for

 

10  contesting the trust or instituting another proceeding relating

 

11  to the trust shall not be given effect if probable cause exists

 

12  for instituting a proceeding contesting the trust or another

 

13  proceeding relating to the trust.

 

 

14                              PART 2

15                       JUDICIAL PROCEEDINGS

 

16                              PART 3

17                          REPRESENTATION

 

18                              PART 4

19    CREATION, VALIDITY, MODIFICATION, AND TERMINATION OF TRUST

 

 

20        Sec. 7411. (1) Subject to subsection (2), a noncharitable

 

21  irrevocable trust may be modified or terminated in any of the

 

22  following ways:

 

23        (a) By the court upon the consent of the trustee and the

 

24  qualified trust beneficiaries, if the court concludes that the

 

25  modification or termination of the trust is consistent with the

 


 1  material purposes of the trust or that continuance of the trust

 

 2  is not necessary to achieve any material purpose of the trust.

 

 3        (b) Upon the consent of the qualified trust beneficiaries

 

 4  and a trust protector who is given the power under the terms of

 

 5  the trust to grant, veto, or withhold approval of termination or

 

 6  modification of the trust.

 

 7        (c) By a trustee or trust protector to whom a power to

 

 8  direct the termination or modification of the trust has been

 

 9  given by the terms of a trust.

 

10        (2) Subsection (1) does not apply to irrevocable trusts

 

11  created before or to revocable trusts that become irrevocable

 

12  before the effective date of the amendatory act that added this

 

13  section.April 1, 2010.

 

14        (3) Notice of any proceeding to terminate or modify a trust

 

15  shall be given to the settlor, or the settlor's representative if

 

16  the petitioner has a reasonable basis to believe the settlor is

 

17  an incapacitated individual, the trust protector, if any, the

 

18  trustee, and any other person named in the terms of the trust to

 

19  receive notice of such a proceeding.

 

20        (4) Upon termination of a trust under subsection (1), the

 

21  trustee shall distribute the trust property as agreed by the

 

22  qualified trust beneficiaries.

 

23        (5) If the trustee fails or refuses to consent, or fewer

 

24  than all of the qualified trust beneficiaries consent, to a

 

25  proposed modification or termination of the trust under

 

26  subsection (1), the modification or termination may be approved

 

27  by the court if the court is satisfied that both of the following

 


 1  apply:

 

 2        (a) If the trustee and all of the qualified trust

 

 3  beneficiaries had consented, the trust could have been modified

 

 4  or terminated under this section.

 

 5        (b) The interests of a qualified trust beneficiary who does

 

 6  not consent will be adequately protected.

 

 7        (6) As used in this section, "settlor's representative"

 

 8  means the settlor's agent under a durable power of attorney, if

 

 9  the attorney in fact agent is known to the petitioner, or, if an

 

10  agent has not been appointed, the settlor's conservator, plenary

 

11  guardian, or partial guardian.

 

12        Sec. 7414. (1) After 63 days after notice to the qualified

 

13  trust beneficiaries and, if the trust is a charitable trust, to

 

14  the attorney general of this state, the trustee of a trust

 

15  consisting of trust property having a total value less than

 

16  $50,000.00 may terminate the trust if the trustee concludes that

 

17  the value of the trust property is insufficient to justify the

 

18  cost of administration. The $50,000.00 amount expressed in this

 

19  section shall be adjusted each year as provided in section 1210.

 

20        (2) The court may modify or terminate a trust or remove the

 

21  trustee and appoint a different trustee if it determines that the

 

22  value of the trust property is insufficient to justify the cost

 

23  of administration.

 

24        (3) Upon termination of a noncharitable trust under this

 

25  section, the trustee shall distribute the trust property in the

 

26  manner provided for in the terms of the trust, if any, and

 

27  otherwise to the current income beneficiaries or, if there are no

 


 1  current income beneficiaries, in the manner directed by the

 

 2  court. Upon termination of a charitable trust under this section,

 

 3  the trustee shall distribute the trust property in a manner

 

 4  consistent with the purposes of the trust.

 

 5        (4) This section does not apply to an easement for

 

 6  conservation or preservation.

 

 

                            PART 5

             CREDITOR'S CLAIMS; SPENDTHRIFT, SUPPORT,

                    AND DISCRETIONARY TRUSTS

 

10                             PART 6

11                         REVOCABLE TRUSTS

 

12                             PART 7

13                        OFFICE OF TRUSTEE

 

14                             PART 8

15                  DUTIES AND POWERS OF TRUSTEE

 

 

16        Sec. 7817. Without limiting the authority conferred by

 

17  section 7816, a trustee has all of the following powers:

 

18        (a) To take possession, custody, or control of property

 

19  transferred to the trust and accept or reject additions to the

 

20  trust.

 

21        (b) To retain property that the trustee receives, including

 

22  property in which the trustee is personally interested, in

 

23  accordance with the Michigan prudent investor rule.

 

24        (c) To receive property from a fiduciary or another source

 

25  that is acceptable to the trustee.

 


 1        (d) To perform, compromise, or refuse to perform a contract

 

 2  of the settlor that is an obligation of the trust, as the trustee

 

 3  may determine under the circumstances. In performing an

 

 4  enforceable contract by the settlor to convey or lease land, if

 

 5  the contract for a conveyance requires the giving of a warranty,

 

 6  the deed or other instrument of conveyance to be given by the

 

 7  trustee shall contain the warranty required. The warranty is

 

 8  binding on the trust as though made by the settlor, but does not

 

 9  bind the trustee except in the trustee's fiduciary capacity. The

 

10  trustee, among other possible courses of action, may do either of

 

11  the following:

 

12        (i) Execute and deliver a deed of conveyance for cash payment

 

13  of money remaining due or the purchaser's note for the money

 

14  remaining due secured by a mortgage on the land.

 

15        (ii) Deliver a deed in escrow with directions that the

 

16  proceeds, when paid in accordance with the escrow agreement, be

 

17  paid to the trustee, as designated in the escrow agreement.

 

18        (e) To satisfy a settlor's written charitable pledge

 

19  irrespective of whether the pledge constitutes a binding

 

20  obligation of the settlor or was properly presented as a claim,

 

21  if in the trustee's judgment the settlor would have wanted the

 

22  pledge completed under the circumstances.

 

23        (f) To deposit trust property in a financial institution,

 

24  including a financial institution operated by or affiliated with

 

25  the trustee and to invest and reinvest trust property as would a

 

26  prudent investor acting in accordance with the Michigan prudent

 

27  investor rule and to deposit securities with a depositary or

 


 1  other financial institution.

 

 2        (g) To acquire property, including property in this or

 

 3  another state or country, in any manner for cash or on credit, at

 

 4  public or private sale; and to manage, develop, improve,

 

 5  exchange, partition, or change the character of trust property.

 

 6        (h) To make an ordinary or extraordinary repair or

 

 7  alteration in a building or another structure, to demolish an

 

 8  improvement, or to raze an existing or erect a new party wall or

 

 9  building.

 

10        (i) To subdivide, develop, or dedicate land to public use;

 

11  to make or obtain the vacation of a plat or adjust a boundary; to

 

12  adjust a difference in valuation on exchange or partition by

 

13  giving or receiving consideration; or to dedicate an easement to

 

14  public use without consideration.

 

15        (j) To enter for any purpose into a lease as lessor or

 

16  lessee, with or without an option to purchase or renew, for a

 

17  period within or extending beyond the duration of the trust.

 

18        (k) To enter into a lease or arrangement for exploration and

 

19  removal of minerals or another natural resource or to enter into

 

20  a pooling or unitization agreement for a period within or

 

21  extending beyond the duration of the trust.

 

22        (l) To abandon or decline to administer property if, in the

 

23  trustee's opinion, the property is valueless, or is so encumbered

 

24  or in such a condition that it is of no benefit to the trust.

 

25        (m) To vote a stock or other security in person, by general

 

26  or limited proxy, or in another manner provided by law, or enter

 

27  into or continue a voting trust agreement.

 


 1        (n) To pay a call, assessment, or other amount chargeable or

 

 2  accruing against or on account of a security, and sell or

 

 3  exercise stock subscription or conversion rights.

 

 4        (o) To hold property in the name of a nominee or in another

 

 5  form without disclosure of the interest of the trust. However,

 

 6  the trustee is liable for an act of the nominee in connection

 

 7  with the property so held.

 

 8        (p) To insure the trust property against damage, loss, or

 

 9  liability and to insure the trustee, the trustee's agents, and

 

10  the trust beneficiaries against liability arising from the

 

11  administration of the trust.

 

12        (q) To borrow property, with or without security, for any

 

13  purpose from the trustee or others and to mortgage or pledge

 

14  trust property for a period within or extending beyond the

 

15  duration of the trust.

 

16        (r) To effect a fair and reasonable compromise with a debtor

 

17  or obligor, or extend, renew, or in any manner modify the terms

 

18  of an obligation owing to the trust. If the trustee holds a

 

19  mortgage, pledge, or another lien on property of another person,

 

20  the trustee may, instead of foreclosure, accept a conveyance or

 

21  transfer of encumbered property from the property's owner in

 

22  satisfaction of the indebtedness secured by a lien.

 

23        (s) To pay a tax, an assessment, the trustee's compensation,

 

24  or another expense incident to the administration of the trust.

 

25        (t) To sell or exercise a subscription or conversion right

 

26  or to consent, directly or through a committee or another agent,

 

27  to the reorganization, consolidation, merger, dissolution, or

 


 1  liquidation of a business enterprise.

 

 2        (u) To allocate an item of income or expense to either trust

 

 3  income or principal, as permitted or provided by law.

 

 4        (v) To employ, and pay reasonable compensation for services

 

 5  performed by, a person, including an auditor, investment advisor,

 

 6  accountant, appraiser, broker, custodian, rental agent, realtor,

 

 7  or agent, even if the person is associated with the trustee, for

 

 8  the purpose of advising or assisting the trustee in the

 

 9  performance of an administrative duty; to act without independent

 

10  investigation upon such a person's recommendation; and, instead

 

11  of acting personally, to employ 1 or more agents to perform an

 

12  act of administration, whether or not discretionary.

 

13        (w) To employ an attorney to perform necessary legal

 

14  services or to advise or assist the trustee in the performance of

 

15  the trustee's administrative duties, even if the attorney is

 

16  associated with the trustee, and to act without independent

 

17  investigation upon the attorney's recommendation. An attorney

 

18  employed under this subdivision shall receive reasonable

 

19  compensation for that his or her employment.

 

20        (x) To prosecute, defend, arbitrate, settle, release,

 

21  compromise, or agree to indemnify an action, claim, or proceeding

 

22  in any jurisdiction or under an alternative dispute resolution

 

23  procedure. The trustee may act under this subdivision for the

 

24  trustee's protection in the performance of the trustee's duties.

 

25        (y) To sell, exchange, partition, or otherwise dispose of,

 

26  or grant an option with respect to, trust property for any

 

27  purpose upon any terms or conditions for a period within or

 


 1  extending beyond the duration of the trust.

 

 2        (z) To continue or participate in a business or enterprise

 

 3  in any manner, in any form, and for any length of time.

 

 4        (aa) To change the form, in any manner, of a business or

 

 5  enterprise in which the settlor was engaged at the time of death.

 

 6        (bb) To provide for exoneration of the trustee from personal

 

 7  liability in a contract entered into on behalf of the trust.

 

 8        (cc) To respond to environmental concerns and hazards

 

 9  affecting trust property as provided in section 7818.

 

10        (dd) To collect, pay, contest, settle, release, agree to

 

11  indemnify against, compromise, or abandon a claim of or against

 

12  the trust, including a claim against the trust by the trustee.

 

13        (ee) To respond to a tax matter as provided in section 7819.

 

14        (ff) To make a payment of money, or other property instead

 

15  of money, to or for a minor or incapacitated trust beneficiary as

 

16  provided in section 7820.

 

17        (gg) To make a distribution or division of trust property in

 

18  cash or in kind, or both; to allot a different kind or

 

19  disproportionate portion of, or an undivided interest in, trust

 

20  property among beneficiaries and determine the value of allotted

 

21  trust property; or to distribute an unclaimed share in the same

 

22  manner as described in section 3916.

 

23        (hh) To transfer the property of a trust to another

 

24  jurisdiction and appoint, compensate, or remove a successor

 

25  trustee, individual or corporate, for trust property in another

 

26  jurisdiction, with any trust powers set out in this part that the

 

27  trustee delegates to the successor trustee.

 


 1        (ii) To execute and deliver an instrument that accomplishes

 

 2  or facilitates the exercise of a power vested in the trustee.

 

 3        (jj) To select a mode of payment under any employee benefit

 

 4  or retirement plan, annuity, or life insurance payable to the

 

 5  trustee, exercise rights thereunder, including exercise of the

 

 6  right to indemnification for expenses and against liabilities,

 

 7  and take appropriate action to collect the proceeds.

 

 8        (kk) To make loans out of trust property, including loans to

 

 9  a trust beneficiary on terms and conditions the trustee considers

 

10  to be fair and reasonable under the circumstances. The trustee

 

11  has a lien on future distributions for repayment of loans made

 

12  under this subdivision.

 

13        (ll) To pledge trust property to guarantee loans made by

 

14  others to the trust beneficiary.

 

15        (mm) To resolve a dispute concerning the interpretation of

 

16  the trust or its administration by mediation, arbitration, or

 

17  other procedure for alternative dispute resolution.

 

18        (nn) On termination of the trust, to exercise the powers

 

19  appropriate to wind up the administration of the trust and

 

20  distribute the trust property to the persons entitled to it.

 

21        Sec. 7821. (1) Upon termination or partial termination of a

 

22  trust, the trustee may send to the trust beneficiaries a proposal

 

23  for distribution. The right of any trust beneficiary to object to

 

24  the proposed distribution terminates if the trust beneficiary

 

25  does not notify the trustee of an objection within 28 days after

 

26  the proposal was sent, but only if the proposal informed the

 

27  trust beneficiary of the right to object and of the time allowed

 


 1  for objection.

 

 2        (2) Upon the occurrence of an event terminating or partially

 

 3  terminating a trust, the trustee shall proceed expeditiously to

 

 4  distribute the trust property to the persons entitled to it,

 

 5  subject to the right of the trustee to retain a reasonable

 

 6  reserve for the payment of debts, taxes, and expenses, including

 

 7  attorney fees and other expenses incidental to the allowance of

 

 8  the trustee's accounts.

 

 9        (3) A release by a trust beneficiary of a trustee from

 

10  liability for breach of trust is invalid to the extent either of

 

11  the following applies:

 

12        (a) The release was induced by improper conduct of the

 

13  trustee.

 

14        (b) The trust beneficiary, at the time of the release, did

 

15  not know of the trust beneficiary's rights or of the material

 

16  facts relating to the breach.

 

 

17                               PART 9

18            LIABILITY OF TRUSTEES AND RIGHTS OF PERSONS

19                       DEALING WITH TRUSTEE

 

 

20        Sec. 7910. (1) Unless otherwise provided in the contract, a

 

21  trustee is not personally liable on a contract properly entered

 

22  into in the trustee's fiduciary capacity in the course of

 

23  administration of the trust estate unless the trustee fails to

 

24  reveal the trustee's representative capacity. and identify the

 

25  trust estate in the contract.

 

26        (2) A trustee is personally liable for an obligation arising

 


 1  from ownership or control of the trust estate property or for a

 

 2  tort committed in the course of administration of the trust

 

 3  estate only if the trustee is personally at fault.

 

 4        (3) A claim based on a contract entered into by a trustee in

 

 5  the trustee's fiduciary capacity, on an obligation arising from

 

 6  ownership or control of the trust estate, or on a tort committed

 

 7  in the course of trust administration may be asserted against the

 

 8  trust estate by proceeding against the trustee in the trustee's

 

 9  fiduciary capacity, whether or not the trustee is personally

 

10  liable for the claim.

 

11        (4) The question of liability as between the trust estate

 

12  and the trustee individually may be determined in a proceeding

 

13  for accounting, surcharge, or indemnification or in another

 

14  appropriate proceeding.

 

 

15             ARTICLE VIII EFFECTIVE DATE AND REPEALER

16                      MISCELLANEOUS PROVISIONS

 

17                               PART 1

18                    EFFECTIVE DATE AND REPEALER

 

19                               PART 2

20    MICHIGAN TRUST CODE MISCELLANEOUS PROVISIONS; EFFECTIVE DATE

 

 

21        Enacting section 1. (1) Except as provided in subsection

 

22  (2), this amendatory act takes effect April 1, 2010.

 

23        (2) Section 3207 of the estates and protected individuals

 

24  code, 1998 PA 386, MCL 700.3207, as amended by this amendatory

 

25  act, takes effect on the date this amendatory act is enacted into

 


 1  law.