Bill Text: MI SB0979 | 2011-2012 | 96th Legislature | Chaptered

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Bill Title: Probate; trusts; personal property trust perpetuities act; modify to account for decanted trusts. Amends secs. 2 & 3 of 2008 PA 148 (MCL 554.92 & 554.93).

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2012-12-31 - Assigned Pa 0484'12 With Immediate Effect [SB0979 Detail]

Download: Michigan-2011-SB0979-Chaptered.html

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Act No. 484

Public Acts of 2012

Approved by the Governor

December 26, 2012

Filed with the Secretary of State

December 28, 2012

EFFECTIVE DATE: December 28, 2012

STATE OF MICHIGAN

96TH LEGISLATURE

REGULAR SESSION OF 2012

Introduced by Senators Schuitmaker and Jones

ENROLLED SENATE BILL No. 979

AN ACT to amend 2008 PA 148, entitled “An act to exclude certain personal property held in trust from the rule against perpetuities and similar rules that potentially affect the duration of trusts,” by amending sections 2 and 3 (MCL 554.92 and 554.93).

The People of the State of Michigan enact:

Sec. 2. As used in this act:

(a) “Fiduciary” means, with respect to a power of appointment, that the power is held by a trustee in a fiduciary capacity.

(b) “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, another power of appointment.

(c) “Nonfiduciary” means, with respect to a power of appointment, that the power of appointment is not held by a trustee in a fiduciary capacity.

(d) “Second-order fiduciary power” means a fiduciary power of appointment that is created or has property subjected to it by the exercise of 1 of the following:

(i) A first power.

(ii) A fiduciary power of appointment that was created or had property subjected to it by the exercise of a first power.

(iii) A fiduciary power of appointment whose creation or control over property subject to the power is traceable through a succession of previous exercises of fiduciary powers to the exercise of a fiduciary power that was created or had property subjected to it by the exercise of a first power.

(e) “Second power” means a power of appointment over personal property held in trust, other than a presently exercisable general power, that is created or to which property is subjected by the exercise of either a first power or a second-order fiduciary power.

(f) “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) The period during which the vesting of a future interest in property may be postponed by the exercise of a second power shall be determined under the uniform statutory rule against perpetuities by reference to the time of the creation of the power of appointment that subjected property to, or created, the second power. 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 power of appointment that subjected property to, or created, the second power.

This act is ordered to take immediate effect.

Secretary of the Senate

Clerk of the House of Representatives

Approved

Governor