ESTATES AND PROTECTED INDIVIDUALS CODE (EXCERPT)
Act 386 of 1998
As used in this article:
(a) "Action", with respect to a trustee or a trust protector, includes an act or a failure to act.
(b) "Ascertainable standard" means a standard relating to an individual's health, education, support, or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the internal revenue code, 26 USC 2041 and 2514.
(c) "Charitable trust" means a trust, or portion of a trust, created for a charitable purpose described in section 7405(1).
(d) "Discretionary trust provision" means a provision in a trust, regardless of whether the terms of the trust provide a standard for the exercise of the trustee's discretion and regardless of whether the trust contains a spendthrift provision, that provides that the trustee has discretion, or words of similar import, to determine 1 or more of the following:
(i) Whether to distribute to or for the benefit of an individual or a class of beneficiaries the income or principal or both of the trust.
(ii) The amount, if any, of the income or principal or both of the trust to distribute to or for the benefit of an individual or a class of beneficiaries.
(iii) Who, if any, among a class of beneficiaries will receive income or principal or both of the trust.
(iv) Whether the distribution of trust property is from income or principal or both of the trust.
(v) When to pay income or principal, except that a power to determine when to distribute income or principal within or with respect to a calendar or taxable year of the trust is not a discretionary trust provision if the distribution must be made.
(e) "Interests of the trust beneficiaries" means the beneficial interests provided in the terms of the trust.
(f) "Power of withdrawal" means a presently exercisable general power of appointment other than a power that is either of the following:
(i) Exercisable by a trustee and limited by an ascertainable standard.
(ii) Exercisable by another person only upon consent of the trustee or a person holding an adverse interest.
(g) "Qualified trust beneficiary" means a trust beneficiary to whom 1 or more of the following apply on the date the trust beneficiary's qualification is determined:
(i) The trust beneficiary is a distributee or permissible distributee of trust income or principal.
(ii) The trust beneficiary would be a distributee or permissible distributee of trust income or principal if the interests of the distributees under the trust described in subparagraph (i) terminated on that date without causing the trust to terminate.
(iii) The trust beneficiary would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.
(h) "Revocable", as applied to a trust, means revocable by the settlor without the consent of the trustee or a person holding an adverse interest. A trust's characterization as revocable is not affected by the settlor's lack of capacity to exercise the power of revocation, regardless of whether an agent of the settlor under a durable power of attorney, a conservator of the settlor, or a plenary guardian of the settlor is serving.
(i) "Settlor" means a person, including a testator or a trustee, who creates a trust. If more than 1 person creates a trust, each person is a settlor of the portion of the trust property attributable to that person's contribution. The lapse, release, or waiver of a power of appointment shall not cause the holder of a power of appointment to be treated as a settlor of the trust.
(j) "Spendthrift provision" means a term of a trust that restrains either the voluntary or involuntary transfer of a trust beneficiary's interest.
(k) "Support provision" means a provision in a trust that provides the trustee shall distribute income or principal or both for the health, education, support, or maintenance of a trust beneficiary, or language of similar import. A provision in a trust that provides a trustee has discretion whether to distribute income or principal or both for these purposes or to select from among a class of beneficiaries to receive distributions pursuant to the trust provision is not a support provision, but rather is a discretionary trust provision.
(l) "Trust beneficiary" means a person to whom 1 or both of the following apply:
(i) The person has a present or future beneficial interest in a trust, vested or contingent.
(ii) The person holds a power of appointment over trust property in a capacity other than that of trustee.
(m) "Trust instrument" means a governing instrument that contains the terms of the trust, including any amendment to a term of the trust.
(n) "Trust protector" means a person or committee of persons appointed pursuant to the terms of the trust who has the power to direct certain actions with respect to the trust. Trust protector does not include either of the following:
(i) The settlor of a trust.
(ii) The holder of a power of appointment.
History: 1998, Act 386, Eff. Apr. 1, 2000
Am. 2009, Act 46, Eff. Apr. 1, 2010
Am. 2012, Act 483, Imd. Eff. Dec. 28, 2012
Popular Name: EPIC
© 2009 Legislative Council, State of Michigan