Certificate of Trust Legislation: What Happened While You Were Making New Year's Eve Plans

By Jeanne E. Murphy posted 02-04-2019 13:47

  

While you were looking in your closet to find that one spangled top, the legislature was passing, and making immediately effective, changes to the certificate of trust.

Before the new legislation, there were two certificates under the law, a certificate of trust recorded in connection with an instrument that conveys, encumbers, or otherwise affects real property (pursuant to MCL 565.431, .434, and .435) and a certificate of trust authority and existence that could be provided to any person other than a trust beneficiary (under MCL 700.7913). The new legislation aligns these two certificates by repealing MCL 565.432, .433, and .436 and amending the requirements for the certificate under MCL 700.7913. See 2018 PA 491 and 492.

Effective December 27, 2018, the requirements for a certificate of trust are the following:

  • the title of the trust
  • the date of the trust agreement and of each operative (i.e., currently effective) amendment of the trust (former law required the date of any amendments)
  • the name and address of each current trustee
  • the powers of the trustee relating to the purpose(s) for which the certificate of trust is being offered (this should shorten the certificate)
  • the revocability or irrevocability of the trust
  • the identity of any person holding a power to revoke the trust
  • the authority of cotrustees to sign on behalf of the trust or otherwise authenticate on behalf of the trust and whether all or less than all of the cotrustees are required to exercise powers of the trustee
  • the legal description of the affected property

MCL 565.431(b), 700.7913(1)–(3).

Other changes

  • refer to “trust instrument” as that term is defined in MCL 700.7103 instead of “trust agreement,”
  • require that if a trust agreement or certificate of trust accompanies an instrument that conveys, encumbers, or otherwise affects real property, the trust instrument or certificate of trust must be recorded as a separate document,
  • repeal the requirement that a certificate of trust used in connection with real estate must name the successor trustees, and
  • allow any trustee to sign a certificate of trust used in conjunction with an instrument that conveys, encumbers, or affects real property.

One person who was not caught unawares by the new legislation was Melisa Mysliwiec, who had a legislative-compliant certificate of trust waiting to go on December 28.

 

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