June 06, 2024, Introduced by Rep. Haadsma and referred to the Committee on Judiciary.
A bill to amend 1988 PA 418, entitled
"Uniform statutory rule against perpetuities,"
by amending sections 3 and 5 (MCL 554.73 and 554.75), section 5 as
amended by 2011 PA 11.
1 Sec. 3. (1) Except as provided in subsections (2), (3), and
2 section 6(1), the time of creation of a nonvested property interest
3 or a power of appointment shall must be determined by statutory or
4 common law.
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1 (2) For purposes of this act, if there is a person who that
2 alone can exercise a power created by a governing instrument to
3 become the unqualified beneficial owner of a nonvested property
4 interest or a property interest subject to a power of appointment
5 described in section 2(2) or (3), the nonvested property interest
6 or power of appointment is created when the power to become the
7 unqualified beneficial owner terminates.
8 (3) For Except as provided in section 5(2), for purposes of
9 this act, a nonvested property interest or a power of appointment
10 arising from a transfer of property to a previously funded trust or
11 other existing property arrangement is created when the nonvested
12 property interest or power of appointment in the original
13 contribution was created.
14 Sec. 5. (1) Section 2 does not apply to any of the following:
15 (a) A nonvested property interest or a power of appointment
16 arising out of a nondonative transfer, except a nonvested property
17 interest or a power of appointment arising out of a premarital or
18 postmarital agreement; a separation or divorce settlement; a
19 spouse's election; a similar arrangement arising out of a
20 prospective, existing, or previous marital relationship between the
21 parties; a contract to make or not to revoke a will or trust; a
22 contract to exercise or not to exercise a power of appointment; a
23 transfer in satisfaction of a duty of support; or a reciprocal
24 transfer.
25 (b) A fiduciary's power relating to the administration or
26 management of assets, including the power of a fiduciary to sell,
27 lease, or mortgage property, and the power of a fiduciary to
28 determine principal and income.
29 (c) A power to appoint a fiduciary.
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1 (d) A discretionary power of a trustee to distribute principal
2 before termination of a trust to a beneficiary having an
3 indefeasibly vested interest in the income and principal.
4 (e) A property interest, power of appointment, or any other
5 arrangement that was not subject to the common-law rule against
6 perpetuities or is excluded by another statute.
7 (f) Except as provided in subsection (2), an interest or power
8 of appointment to which the personal property trust perpetuities
9 act, 2008 PA 148, MCL 554.91 to 554.94, applies.
10 (2) Section 2 is applicable to an interest or power of
11 appointment created, or to which property is subjected, by the
12 exercise of a second power that is subject to section 2(1) of the
13 personal property trust perpetuities act, 2008 PA 148, MCL 554.91
14 to 554.94, applies if the interest or power was created, or
15 property was made subject to the interest or power, by the exercise
16 of a second power. 554.92. If section 2 is applicable to an
17 interest or power under this subsection, it applies only to the
18 extent of the exercise of the second power, and instead of using a
19 period of 90 years to determine whether section 2(1)(b), (2)(b), or
20 (3)(b) is satisfied, or whether to reform a disposition under
21 section 4, a period of 360 years shall must be used.
22 (3) As used in this section, "second power" means that term as
23 defined in section 2 of the personal property trust perpetuities
24 act, 2008 PA 148, MCL 554.92.
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Statutes affected:
House Introduced Bill: 554.73, 554.75