The New Michigan Trust Code


On April 1, 2010 the new Michigan Trust Code (MTC) took effect. According the MTC committee, the new trust code represents a continuation of the modernization of Michigan’s law governing estates and trusts which began in 2000 with the Estates and Protected Individuals Code (EPIC). The primary purpose of the MTC is to provide a single, comprehensive source of law for trusts in Michigan. Although there are some important new provisions, the MTC generally preserves existing law absent some significant reason to change. In light of the new law, it may be a very good idea to review your trust to determine if any changes are necessary. Fortunately, you are not required to amend your trust, although you may want to make some changes to your trust to be certain it carries out your wishes. Here are just a few important provisions in the MTC:

  1. It applies to ALL trusts whether established before or after April 1, 2010.

  2. It is primarily a series of default rules which means that the MTC only applies when your trust is silent as to the issue.

  3. It allows a Certificate of Trust to be used as proof of the existence of the trust without having to provide a copy of the entire trust document.

  4. It permits a trust to be amended or revoked by an agent under a durable power of attorney of if expressly authorized under the terms of the trust or power of attorney

  5. Legal challenges to the validity of a revocable trust must be filed within the earlier of 2 years after the settlor’s death or 6 months if the person received proper notice from the trustee.

  6. A no-contest clause that penalizes a person for challenging a trust is not effective if probable cause exists for instituting a proceeding contesting the trust.

  7. Permits a trust to be written to provide asset protection from creditors of the trust beneficiaries.

  8. Provides options for families and their attorneys to resolve disputes without court involvement.

Trusts are an important estate planning tool for many people. Fortunately, the MTC made the law governing trusts even better. If you already have a trust or are considering one, the MTC makes it an excellent time to review your estate plan. As always, be sure to consult with an experienced elder law attorney.

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