Effective April 1, 2010, Michigan has a new law governing trusts set up here in our state. The trust law was overhauled to address gaps in current law, create uniformity between our trust law and that of other states, and make it easier for Michigan banks to appoint a local trustee to oversee trusts established here.
Trust law is complicated, so much so that attorneys who specialize in this area are taking half-day training courses to make sure they fully understand all the changes in the new Michigan Trust Code!
Here is a layperson’s overview of some of the most important differences in the new code:
Conforms with the Uniform Trust Code
The UTC was created to help standardize trust law across states, and Michigan’s new law incorporates many UTC provisions. More than 20 states now base their trust law on the UTC, and legislation is pending in several other states to make their trust laws conform to the UTC as well. Using the UTC as the basis for our trust law makes it easier for trustees in other states to be appointed to oversee Michigan trusts while keeping those trusts based here in Michigan and retaining related administrative jobs.
Fills in legal gaps
Previously, our trust law was riddled with incomplete and antiquated provisions. Some 34 different sections were added to fill in these gaps and modernize our trust law. Among the issues clarified are the law relating to accepting or declining a trusteeship, filling a trustee vacancy, the resignation of trustees, and the removal of trustees. The new law outlines situations under which a small or uneconomic trust can be terminated, provides a time limit for challenging a revocable trust, and expands the allowed uses of certificates of trust.
Sticks with Michigan law
Where established Michigan law and the UTC conflict, for the most part the new trust law adheres to longstanding Michigan law and precedent. The new law changes little in established Michigan trust law.
It’s EPIC. In some cases, to preserve Michigan law, the new trust law follows the provisions of the national Estates and Protected Individuals Code, or EPIC, instead of UTC law. Our state adopted EPIC back in 2000 to govern issues surrounding the disposition of estates in Michigan. This often involves the creation of a trust, so the two legal areas overlap.
As you can see, our new Michigan Trust Code brings a lot of changes for trusts and trustees in our state. If you need advice in this area, know that the Law Offices of Graham & Hubbert have years of experience in estate planning. You can contact the Law Offices of Graham & Hubbert for a free initial phone consultation.