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Michigan Living Trust Form (Revocable)

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Michigan Living Trust Form (Revocable)

Updated April 29, 2024

A Michigan living trust allows an individual (the “grantor”) to place their assets in trust to be distributed to designated beneficiaries upon their death. Unlike a will, a living trust avoids the probate process altogether, and the grantor may also act as their own trustee. Furthermore, the grantor can revoke or amend their living trust at any time.

Requirements (5)

  1. Competent: The grantor must have the capacity to establish a trust.
  2. Intent: The grantor must indicate the intent to create a trust.
  3. Definite Beneficiary: Unless it is a charitable trust or a trust for the care of an animal, the trust must have a definite beneficiary.
  4. Trustee’s Duties: There must be duties for the trustee to perform.
  5. Sole Trustee Cannot be the Sole Beneficiary: The sole trustee and the sole beneficiary of the trust cannot be the same individual.[1]

Laws

Amending/Revoking – The grantor may amend or revoke the trust, unless the terms of the trust specifically identify it as irrevocable.[3]

Bond Requirement – The trustee is only required to put forward a bond to secure the performance of their duties if this is a requirement under the terms of the trust or this has been ordered by the court.[4]

Certification of Trust – The trustee may provide a person other than a beneficiary with a certificate of trust in lieu of a copy of the instrument. The certificate must the name and date of the trust, the name and powers of the trust, and whether it’s revocable.[5]

Co-Trustees – Co-trustees must act by majority decision.[6]

Contesting a Trust – A person may commence an action contesting a trust within six months of receiving notice from the trustee of the trust’s existence or within two years of the grantor’s death, whichever is earlier.[7]

Costs Related to the Trust – In administering the trust, the trustee must follow the standards of prudent investment and management established by the Michigan prudent investor rule.[8]

Jurisdiction – Trusts created in other jurisdictions are valid in Michigan if they were created in compliance with the laws of either the jurisdiction where the instrument was executed or the jurisdiction where the grantor was living at the time of creation.[9]

Oral Trusts – “Clear and convincing evidence” is required to legally establish an oral trust in Michigan.[10]

Pet Trusts – A trust may be created to provide for the care of one or more pets or animals that are alive during the grantor’s lifetime. This type of trust terminates on the death of the last surviving animal.[11]

Signing Requirements – Michigan state law does not require a living trust to be signed in order to be valid.

Spendthrift Provision – A spendthrift provision is valid so long as the words “spendthrift trust,” or words of a similar meaning, are used in describing this provision in the terms of the trust.[12]

Trustee’s Compensation – If the trustee’s compensation is not specified in the trust agreement, they are otherwise entitled to reasonable compensation under the circumstances.[13]

Trustee’s Duties – The trustee must expeditiously administer the trust in good faith, in accordance with its purposes, and for the benefit of the beneficiaries.[14]

Trustee’s Powers – Along with any powers conferred by the trust terms, the trustee is empowered to take possession of property transferred to the trust and to retain property received from a fiduciary or any other acceptable source.[15]

Sources

  1. § 700.7402(1)
  2. § 14.255
  3. § 700.7602(1)
  4. § 700.7702(1)
  5. § 700.7913(1)
  6. § 700.7703(1)
  7. § 700.7604(1)
  8. § 700.7803
  9. § 700.7403
  10. § 700.7407
  11. § 700.7408(1)
  12. § 700.7502(2)
  13. § 700.7708(1)
  14. § 700.7801
  15. § 700.7817