The Leading Trust and Estate Litigation Firm in Michigan

Michigan Trust Code Enacted

On April 1, 2010, the Michigan Trust Code (MTC) took effect, updating Michigan’s law regarding trusts. The new laws were created to codify a substantial portion of Michigan’s common law regarding trusts, fill gaps in Michigan’s existing trust law and to provide a comprehensive body of statutory law on which individuals and attorneys can rely in estate planning and the creation of trusts.

What Is The MTC?

The MTC will apply to all trusts, regardless of whether they were created before the MTC took effect. Because the MTC is basically a set of “default” rules, a settlor has the ability to craft a trust that best reflects his or her wishes and avoid the application of much, but not all, of the MTC. For this reason, existing trusts should be reviewed to determine the effects of the MTC and which, if any, changes should or can be made. Moreover, the MTC will create some degree of uniformity with the laws of other states (as “uniformity” among states’ laws is always a relative term).

The Uniform Trust Code And The MTC

The MTC is based on the Uniform Trust Code (UTC). The UTC was drafted as a model code to provide states with a guideline when drafting their own trust laws. Since many states have used or are using the UTC to draft legislation regarding trust law, more uniformity should exist among those states’ laws. Therefore, individuals could create trusts that would be interpreted and enforced similarly regardless of where they reside.

While the MTC is based on the UTC, it was generally designed to keep Michigan’s common law intact by incorporating long-standing Michigan provisions and procedures regarding trusts. Even so, the MTC will bring about a few major changes to Michigan law. For example, a person who settles charitable trusts will be able to enforce the particular terms of the trust. Also, the level of capacity necessary for an individual to create a trust has been changed to mirror that for a will.

These rules allow Michigan residents to make a simpler choice between establishing a trust or drafting a will — two of the most commonly used methods of transferring property after death. Equally dramatic is the formal introduction of the “trust protector” concept to Michigan law. Lastly, the MTC will make all trusts created after the effective date revocable trusts, unless the drafter of the trust specifically states otherwise.

Prince Law Firm Can Help You Understand How the MTC Impacts You

The hope is that the MTC will change the way trusts are drafted and administered in Michigan for the better. However, because of the changes in the law, individuals with trusts or those who plan to create a trust should become familiar with the changes and understand their impact. Michigan attorneys and law firms that focus on estate planning should be consulted to analyze the effects of the MTC on existing trusts.

To learn more about the MTC and how it applies to your existing trusts, call Prince Law Firm at 248-419-1968 or send us an email.

Estate Planning Law Blog

Blog

Common estate planning misconceptions

Putting together an estate plan is not the hardest thing to do in the world, but it isn’t necessarily the simplest thing to do either. Common misconceptions about estate planning certainly don’t make the process any easier. So, let’s clear up some well-known myths...

Reviewing estate planning goals after entering a second marriage

It might not be uncommon to experience a variety of changes throughout life, and each of these changes could alter your goals and preferences for the future. Upon entering a second marriage, there are numerous topics to consider as you prepare to align your plans with...

Getting POAs set up for your college student

Helping a child prepare for college is a pretty involved process. There are a lot of things to think about and plan for. One thing many parents in Michigan may not think to do is set up powers of attorney for their college-aged kids. POAs serve a valuable purpose, and...

Entering retirement? It’s time to look at your estate plan

As you saw the economy take a downturn and people become frustrated when trying to find work, you decided that it was time to retire. You could leave your position and have it open up for someone else, all without it negatively affecting you.  Now that you’ve made the...

Could you benefit from a long-term care insurance policy?

When it comes to modern medical care, long-term care is one of the most expensive needs that a person could have. Long-term care may necessitate residency in a nursing home, which may cost thousands of dollars a month. Long-term care could also mean having skilled...