June 16, 2005, Introduced by Reps. Schuitmaker, Van Regenmorter, Gosselin, Lipsey, Bieda, Condino, Gillard, McConico, Elsenheimer, Virgil Smith, David Law and Kahn and referred to the Committee on Judiciary.
A bill to amend 1998 PA 386, entitled
"Estates and protected individuals code,"
by amending sections 1104, 2301, 2908, 3715, 3804, 3919, 5202,
5217, 5423, 7401, 7502, and 7508 (MCL 700.1104, 700.2301, 700.2908,
700.3715, 700.3804, 700.3919, 700.5202, 700.5217, 700.5423,
700.7401, 700.7502, and 700.7508), sections 1104 and 5202 as
amended by 2000 PA 54, sections 2301 and 3715 as amended by 2004 PA
314, section 5423 as amended by 2000 PA 469, and section 7508 as
amended by 2000 PA 177.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1104. As used in this act:
(a) "Environmental law" means a federal, state, or local law,
rule, regulation, or ordinance that relates to the protection of
the environment or human health.
(b) "Estate" includes the property of the decedent, trust, or
other person whose affairs are subject to this act as the property
is originally constituted and as it exists throughout
administration. Except
when used in the term "probate estate",
estate
includes the right of an estate described in section 7502 to
proceed
against a recipient of a nonprobate transfer on death and
against
a trust subject to a power of revocation as necessary to
enable
the estate to discharge claims and family allowances.
Estate also includes the rights described in sections 3805, 3922,
and 7502 to collect from others amounts necessary to pay claims,
allowances, and taxes.
(c) "Exempt property" means property of a decedent's estate
that is described in section 2404.
(d)
"Family allowance" is means
the allowance prescribed in
section 2403.
(e) "Fiduciary" includes, but is not limited to, a personal
representative, guardian, conservator, trustee, plenary or partial
guardian appointed as provided in chapter 6 of the mental health
code, 1974 PA 258, MCL 330.1600 to 330.1644, and successor
fiduciary.
(f) "Financial institution" means an organization authorized
to do business under state or federal laws relating to a financial
institution and includes, but is not limited to, a bank, trust
company, savings bank, building and loan association, savings and
loan company or association, and credit union.
(g) "Foreign personal representative" means a personal
representative appointed by another jurisdiction.
(h) "Formal proceedings" means proceedings conducted before a
judge with notice to interested persons.
(i) "General personal representative" means a personal
representative other than a special personal representative.
(j) "Governing instrument" means a deed; will; trust;
insurance or annuity policy; account with POD designation; security
registered in beneficiary form (TOD); pension, profit-sharing,
retirement, or similar benefit plan; instrument creating or
exercising a power of appointment or a power of attorney; or
dispositive, appointive, or nominative instrument of any similar
type.
(k) "Guardian" means a person who has qualified as a guardian
of a minor or a legally incapacitated individual under a parental
or spousal nomination or a court appointment and includes a limited
guardian as described in sections 5205, 5206, and 5306. Guardian
does not include a guardian ad litem.
(l) "Hazardous substance" means a substance defined as
hazardous or toxic or otherwise regulated by an environmental law.
(m) "Heir" means, except as controlled by section 2720, a
person, including the surviving spouse or the state, that is
entitled under the statutes of intestate succession to a decedent's
property.
(n) "Homestead allowance" means the allowance prescribed in
section 2402.
Sec. 2301. (1) Except as provided in subsection (2), if a
testator's surviving spouse marries the testator after the testator
executes his or her will, the surviving spouse is entitled to
receive, as an intestate share, not less than the value of the
share of the estate the surviving spouse would have received if the
testator had died intestate as to that portion of the testator's
estate, if any, that is not any of the following:
(a) Property devised to or in trust for the benefit of a child
of the testator who was born before the testator married the
surviving spouse and who is not the surviving spouse's child.
(b) Property devised to or in trust for the benefit of a
descendant of a child described in subdivision (a).
(c) Property that passes under section 2603 or 2604 to a child
described in subdivision (a) or to a descendant of such a child.
(2) Subsection (1) does not apply if any of the following are
true:
(a) From the will or other evidence, it appears that the will
was made in contemplation of the testator's marriage to the
surviving spouse.
(b) The will expresses the intention that it is to be
effective notwithstanding a subsequent marriage.
(c) The testator provided for the spouse by transfer outside
the will, and the intent that the transfer be a substitute for a
testamentary provision is shown by the testator's statements or is
reasonably inferred from the amount of the transfer or other
evidence.
(3) In satisfying the share provided by this section, devises
made by the will to the testator's surviving spouse, if any, are
applied first, and other devises, other than a devise to or in
trust for the benefit of a child of the testator who was born
before the testator married the surviving spouse and who is not the
surviving spouse's child or a devise or substitute gift under
section 2603 or 2604 to a descendant of such a child, abate as
provided in section 3902.
(4) A spouse who receives an intestate share under this
section may also exercise the right of election under section 2202,
but the intestate share received by the spouse under this section
reduces the sum available to the spouse under section 2202(2)(b).
Sec.
2908. (1) If the a
disclaimed interest arises out of
joint property created by a governing instrument, testamentary or
nontestamentary, the following apply:
(a) If the disclaimant is the only living owner, the
disclaimed interest devolves to the estate of the last to die of
the other joint owners.
(b) If the disclaimant is not the only living owner, the
disclaimed interest devolves to the other living joint owners
equally or, if there is only 1 living owner, all to the other
living owner.
(2)
If the donee of a power of appointment disclaims the power
of
appointment, the property that is subject to the power of
appointment
devolves as follows:
(a)
If the power of appointment arises out of a will or
testamentary
instrument, as if the donee died before the decedent.
(b)
If the power of appointment arises out of a governing
instrument
other than a will or testamentary trust, as if the
disclaimant
died before the effective date of the governing
instrument.
(2) If the donee of a power of appointment or other power not
held in a fiduciary capacity disclaims the power, all of the
following apply:
(a) If the donee has not exercised the power, the disclaimer
takes effect as of the time the instrument creating the power
becomes effective.
(b) If the donee has exercised the power, the disclaimer takes
effect immediately after the last exercise of the power.
(c) The instrument creating the power is construed as if the
power expired when the disclaimer became effective.
(3) If all incumbent trustees disclaim a disclaimable
interest, and the governing instrument does not provide for another
disposition of the disclaimed interest if it is disclaimed or for
another disposition of disclaimed or failed interests in general,
then the disclaimed interest devolves as if the trust with respect
to which the disclaimer was made never existed. If less than all
incumbent trustees disclaim a disclaimable interest and the
governing instrument does not provide for another disposition of
the disclaimed interest under those circumstances, then the trustee
who disclaims is treated as never having had any interest in or
power over the disclaimed interest.
(4) If a fiduciary disclaims a fiduciary power, the fiduciary
power ceases to exist as of the effective date of the disclaimer. A
disclaimer of a fiduciary power by 1 of multiple incumbent
fiduciaries is binding only on the fiduciary who disclaims and is
not binding on the other incumbent fiduciaries or on successor
fiduciaries. A disclaimer of a fiduciary power by all incumbent
fiduciaries is binding on all successor fiduciaries, unless the
disclaimer states otherwise.
Sec. 3715. Except as restricted or otherwise provided by the
will or by an order in a formal proceeding, and subject to the
priorities stated in section 3902, a personal representative,
acting reasonably for the benefit of interested persons, may
properly do any of the following:
(a) Retain property owned by the decedent pending distribution
or liquidation, including property in which the personal
representative is personally interested or that is otherwise
improper for trust investment.
(b) Receive property from a fiduciary or another source.
(c) Perform, compromise, or refuse performance of a contract
of the decedent that continues as an estate obligation, as the
personal representative determines under the circumstances. If the
contract is for a conveyance of land and requires the giving of
warranties, the personal representative shall include in the deed
or other instrument of conveyance the required warranties. The
warranties are binding on the estate as though the decedent made
them but do not bind the personal representative except in a
fiduciary capacity. In performing an enforceable contract by the
decedent to convey or lease land, the personal representative,
among other possible courses of action, may do any of the
following:
(i) Execute and deliver a deed of conveyance for cash payment
of the amount remaining due or for the purchaser's note for the
amount remaining due secured by a mortgage on the land.
(ii) Deliver a deed in escrow with directions that the
proceeds, when paid in accordance with the escrow agreement, be
paid to the decedent's successors, as designated in the escrow
agreement.
(d) If, in the judgment of the personal representative, the
decedent would have wanted the pledge satisfied under the
circumstances, satisfy a written charitable pledge of the decedent
irrespective of whether the pledge constitutes a binding obligation
of the decedent or is properly presented as a claim.
(e) If funds are not needed to meet a debt or expenses
currently payable and are not immediately distributable, deposit or
invest liquid assets of the estate, including funds received from
the sale of other property, in accordance with the Michigan prudent
investor rule.
(f) Acquire or dispose of property, including land in this or
another state, for cash or on credit, at public or private sale;
and manage, develop, improve, exchange, partition, change the
character of, or abandon estate property.
(g) Make an ordinary or extraordinary repair or alteration in
a building or other structure, demolish an improvement, or raze an
existing or erect a new party wall or building.
(h) Subdivide, develop, or dedicate land to public use, make
or obtain the vacation of a plat or adjust a boundary, adjust a
difference in valuation on exchange or partition by giving or
receiving consideration, or dedicate an easement to public use
without consideration.
(i) Enter into a lease as lessor or lessee for any purpose,
with or without an option to purchase or renew, for a term within
or extending beyond the period of administration.
(j) Enter into a lease or arrangement for exploration and
removal of minerals or another natural resource, or enter into a
pooling or unitization agreement.
(k) Abandon property when, in the opinion of the personal
representative, it is valueless, or is so encumbered or in such a
condition as to be of no benefit to the estate.
(l) Vote stocks or another security in person or by general or
limited proxy.
(m) Pay a call, assessment, or another amount chargeable or
accruing against or on account of a security, unless barred by a
provision relating to claims.
(n) Hold a security in the name of a nominee or in other form
without disclosure of the estate's interest. However, the personal
representative is liable for an act of the nominee in connection
with the security so held.
(o) Insure the estate property against damage, loss, and
liability and insure the personal representative against liability
as to third persons.
(p) Borrow money with or without security to be repaid from
the estate property or otherwise, and advance money for the
estate's protection.
(q) Effect a fair and reasonable compromise with a debtor or
obligor, or extend, renew, or in any manner modify the terms of an
obligation owing to the estate. If the personal representative
holds a mortgage, pledge, or other lien upon another person's
property, the personal representative may, in lieu of foreclosure,
accept a conveyance or transfer of encumbered property from the
property's owner in satisfaction of the indebtedness secured by
lien.
(r) Pay a tax, an assessment, the personal representative's
compensation, or another expense incident to the estate's
administration.
(s) Sell or exercise a stock subscription or conversion right.
(t) Consent, directly or through a committee or other agent,
to the reorganization, consolidation, merger, dissolution, or
liquidation of a corporation or other business enterprise.
(u) Allocate items of income or expense to either estate
income or principal, as permitted or provided by law.
(v) Employ, and pay reasonable compensation for reasonably
necessary services performed by, a person, including, but not
limited to, an auditor, investment advisor, or agent, even if the
person is associated with the personal representative, to advise or
assist the personal representative in the performance of
administrative duties; act on such a person's recommendations
without independent investigation; and instead of acting
personally, employ 1 or more agents to perform an act of
administration, whether or not discretionary.
(w) Employ an attorney to perform necessary legal services or
to advise or assist the personal representative in the performance
of the personal representative's administrative duties, even if the
attorney is associated with the trustee, and act without
independent investigation upon the attorney's recommendation. An
attorney employed under this subdivision shall receive reasonable
compensation
for that his
or her employment.
(x) Prosecute or defend a claim or proceeding in any
jurisdiction for the protection of the estate and of the personal
representative in the performance of the personal representative's
duties.
(y) Sell, mortgage, or lease estate property or an interest in
estate property for cash, credit, or part cash and part credit, and
with or without security for unpaid balances.
(z) Continue a business or venture in which the decedent was
engaged at the time of death as a sole proprietor or a general
partner, including continuation as a general partner by a personal
representative that is a corporation in any of the following
manners:
(i) In the same business form for a period of not more than 4
months after the date of appointment of a general personal
representative if continuation is a reasonable means of preserving
the value of the business, including goodwill.
(ii) In the same business form for an additional period of time
if approved by court order in a formal proceeding to which the
persons interested in the estate are parties.
(iii) Throughout the period of administration if the personal
representative incorporates the business or converts the business
to a limited liability company and if none of the probable
distributees of the business who are competent adults object to its
incorporation or conversion and its retention in the estate.
(aa) Change the form of a business or venture in which the
decedent was engaged at the time of death through incorporation or
formation as a limited liability company or other entity offering
protection against or limiting exposure to liabilities.
(bb) Provide for the personal representative's exoneration
from personal liability in a contract entered into on the estate's
behalf.
(cc) Respond to an environmental concern or hazard affecting
estate property as provided in section 3722.
(dd) Satisfy and settle claims and distribute the estate as
provided in this act.
(ee) Make, revise, or revoke an available allocation, consent,
or election in connection with a tax matter as appropriate in order
to carry out the decedent's estate planning objectives and to
reduce the overall burden of taxation, both in the present and in
the future. This authority includes, but is not limited to, all of
the following:
(i) Electing to take expenses as estate tax or income tax
deductions.
(ii) Electing to allocate the exemption from the tax on
generation skipping transfers among transfers subject to estate or
gift tax.
(iii) Electing to have all or a portion of a transfer for a
spouse's benefit qualify for the marital deduction.
(iv) Electing the date of death or an alternate valuation date
for federal estate tax purposes.
(v) Excluding or including property from the gross estate for
federal estate tax purposes.
(vi) Valuing property for federal estate tax purposes.
(vii) Joining with the surviving spouse or the surviving
spouse's personal representative in the execution and filing of a
joint income tax return and consenting to a gift tax return filed
by the surviving spouse or the surviving spouse's personal
representative.
(ff) Divide portions of the estate, including portions to be
allocated into trust, into 2 or more separate portions or trusts
with substantially identical terms and conditions, and allocate
property between them, in order to simplify administration for
generation skipping transfer tax purposes, to segregate property
for management purposes, or to meet another estate or trust
objective.
Sec. 3804. (1) A claimant must present a claim against a
decedent's estate in either of the following ways:
(a) By delivering or mailing a written statement to the
personal
representative or proposed personal representative
indicating the claim's basis, the claimant's name and address, and
the amount claimed, or by filing with the court a written statement
of the claim in the form prescribed by supreme court rule and
delivering or mailing a copy of the statement to the personal
representative. or
proposed personal representative. The claim
shall be considered presented on receipt of the claim statement by
the personal representative or the filing of the claim statement
with the court, whichever occurs first. If a claim is not yet due,
the statement shall state the date when it will become due. If the
claim is contingent or unliquidated, the statement shall state the
nature of the uncertainty. If the claim is secured, the statement
shall describe the security. Failure to describe correctly the
security, the nature of any uncertainty, or the due date of a claim
not yet due does not invalidate the claim's presentation.
(b) By commencing a proceeding to obtain payment of a claim
against the estate in a court in which the personal representative
may be subjected to jurisdiction. The commencement of the
proceeding shall occur within the time limit for presenting the
claim. The presentation of a claim is not required in regard to a
matter claimed in a proceeding against the decedent that is pending
at the time of death.
(2) Except as otherwise provided in this subsection, if a
claim is presented under subsection (1)(a), a proceeding on the
claim shall not be commenced more than 63 days after the personal
representative delivers or mails a notice of disallowance to the
claimant. For a claim that is not presently due or that is
contingent or unliquidated, the personal representative may consent
to an extension of the 63-day period or, to avoid injustice, the
court, on petition, may order an extension of the 63-day period,
but an extension shall not be consented to or ordered if the
extension would run beyond the applicable statute of limitations.
(3) A claim by the personal representative against the estate
shall be in the form prescribed by supreme court rule. The personal
representative must give a copy of the claim to all interested
persons not later than 7 days after the time for the claim's
original presentation expires. The claim must contain a warning
that the personal representative's claim will be allowed unless a
notice of objection is delivered or mailed to the personal
representative within 63 days after the time for the claim's
original presentation expires. This subsection does not apply to a
claim for compensation for services rendered or for reimbursement
of expenses advanced by the personal representative.
Sec. 3919. (1) If there is a personal representative of the
decedent's domicile willing to receive it, a nonresident decedent's
estate being administered by a personal representative appointed in
this state shall be distributed to the domiciliary personal
representative for the benefit of the decedent's successors unless
any of the following apply:
(a) By virtue of the decedent's will, if any, and applicable
choice of law rules, the successors are identified under the law of
this state without reference to the law of the decedent's domicile.
(b) After reasonable inquiry, this state's personal
representative is unaware of the existence or identity of a
domiciliary personal representative.
(c) The court orders otherwise in a proceeding for a closing
order
under section 3951 3952
or incident to the closing of a
supervised administration.
(2) If subsection (1) is not applicable to an estate,
distribution of the decedent's estate shall be made in accordance
with the other provisions of this article.
Sec. 5202. (1) The parent of an unmarried minor may appoint a
guardian for the minor by will or by another writing signed by the
parent and attested by at least 2 witnesses.
(2) Subject to the right of the minor under section 5203, if
both parents are dead or have been adjudged to be legally
incapacitated or the surviving parent has no parental rights or has
been adjudged to be legally incapacitated, a parental appointment
becomes effective when the guardian's acceptance is filed in the
court
in which a nominating instrument the will containing the
nomination
is probated or, in
the case of if the
nomination is
contained
in a nontestamentary nominating
instrument , or the
testator who made the nomination is not deceased, is filed in the
court at the place where the minor resides or is present. If both
parents are dead, an effective appointment by the parent who died
later has priority.
(3) A parental appointment effected by filing the guardian's
acceptance under a will probated in the state of the testator's
domicile is effective in this state.
(4) Upon acceptance of appointment, the guardian shall give
written notice of acceptance to the minor and to the person having
the minor's care or the minor's nearest adult relative.
Sec. 5217. A guardian's authority and responsibility terminate
upon the guardian's death, resignation, or removal or upon the
minor's death, adoption, marriage, or attainment of majority.
However, a termination does not affect the guardian's liability for
prior acts or the obligation to account for the ward's money and
property. The guardian's resignation does not terminate the
guardianship until it is approved by the court. A parental
appointment under an unprobated or informally probated will
terminates if the will is later denied probate in a formal
proceeding.
Sec.
5423. (1) Subject to a limitation
provided in imposed
under section 5427, a conservator has all of the powers conferred
in this section and the additional powers conferred by law on
trustees in this state. In addition, a conservator of the estate of
an unmarried minor, as to whom no one has parental rights, has the
powers, responsibilities, and duties of a guardian described in
section 5215 until the individual is no longer a minor or marries.
The parental rights conferred on a conservator by this section do
not preclude a guardian's appointment as provided in part 2.
(2) Acting reasonably in an effort to accomplish the purpose
of the appointment and without court authorization or confirmation,
a conservator may do any of the following:
(a) Collect, hold, or retain estate property, including land
in
another state, until judging the conservator determines that
disposition of the property should be made. Property may be
retained even though it includes property in which the conservator
is personally interested.
(b) Receive an addition to the estate.
(c) Continue or participate in the operation of a business or
other enterprise.
(d) Acquire an undivided interest in estate property in which
the conservator, in a fiduciary capacity, holds an undivided
interest.
(e) Invest or reinvest estate property. If the conservator
exercises the power conferred by this subdivision, the conservator
must invest or reinvest the property in accordance with the
Michigan prudent investor rule.
(f) Deposit estate money in a state or federally insured
financial institution including one operated by the conservator.
(g) Except as provided in subsection (3), acquire or dispose
of estate property, including land in another state, for cash or on
credit, at public or private sale, or manage, develop, improve,
exchange, partition, change the character of, or abandon estate
property.
(h) Make an ordinary or extraordinary repair or alteration in
a building or other structure, demolish an improvement, or raze an
existing or erect a new party wall or building.
(i) Subdivide, develop, or dedicate land to public use; make
or obtain the vacation of a plat or adjust a boundary; adjust a
difference in valuation on exchange or partition by giving or
receiving consideration; or dedicate an easement to public use
without consideration.
(j) Enter for any purpose into a lease as lessor or lessee
with or without option to purchase or renew for a term within or
extending beyond the term of the conservatorship.
(k) Enter into a lease or arrangement for exploration and
removal of a mineral or other natural resource or enter into a
pooling or unitization agreement.
(l) Grant an option involving disposition of estate property or
take an option for the acquisition of property.
(m) Vote a security, in person or by general or limited proxy.
(n) Pay a call, assessment, or another amount chargeable or
accruing against or on account of a security.
(o) Sell or exercise stock subscription or conversion rights.
(p) Consent, directly or through a committee or other agent,
to the reorganization, consolidation, merger, dissolution, or
liquidation of a corporation or other business enterprise.
(q) Hold a security in the name of a nominee or in other form
without disclosure of the conservatorship so that title to the
security may pass by delivery. However, the conservator is liable
for an act of the nominee in connection with the stock so held.
(r) Insure the estate property against damage or loss or the
conservator against liability with respect to third persons.
(s) Borrow money to be repaid from estate property or
otherwise.
(t) Advance money for the protection of the estate or the
protected individual, and for all expense, loss, or liability
sustained in the estate's administration or because of the holding
or
ownership of estate property. , for which the The conservator
has a lien on the estate as against the protected individual for
such
an advance. so
made.
(u) Pay or contest a claim; settle a claim by or against the
estate or the protected individual by compromise, arbitration, or
otherwise; and release, in whole or in part, a claim belonging to
the estate to the extent that the claim is uncollectible.
(v) Pay a tax, assessment, conservator's compensation, or
other expense incurred in the estate's collection, care,
administration, and protection.
(w) Allocate an item of income or expense to either estate
income or principal, as provided by law, including creation of a
reserve out of income for depreciation, obsolescence, or
amortization, or for depletion in a mineral or timber property.
(x) Pay money distributable to a protected individual or the
protected individual's dependent by paying the money to the
distributee or by paying the money for the use of the distributee
to the distributee's guardian, or if none, to a relative or other
person having custody of the distributee.
(y) Employ a person, including an auditor, investment advisor,
or agent, even though the person is associated with the
conservator, to advise or assist in the performance of an
administrative duty; act upon the person's recommendation without
independent investigation; and, instead of acting personally,
employ an agent to perform an act of administration, whether or not
discretionary.
(z) Employ an attorney to perform necessary legal services or
to advise or assist the conservator in the performance of the
conservator's administrative duties, even if the attorney is
associated with the trustee, and act without independent
investigation upon the attorney's recommendation. An attorney
employed under this subdivision shall receive reasonable
compensation
for that his
or her employment.
(aa) Prosecute or defend an action, claim, or proceeding in
any jurisdiction for the protection of estate property and of the
conservator in the performance of a fiduciary duty.
(bb) Execute and deliver an instrument that will accomplish or
facilitate the exercise of a power vested in the conservator.
(cc) Respond to an environmental concern or hazard affecting
property as provided in section 5424.
(3) A conservator shall not sell or otherwise dispose of the
protected individual's real property or interest in real property
without approval of the court. The court shall only approve the
sale or other disposal of the real property or interest in real
property if, after a hearing with notice to interested persons as
specified in the Michigan court rules, the court considers evidence
of the value of the real property or interest in real property and
otherwise determines that the sale or other disposal is in the
protected individual's best interest.
Sec. 7401. (1) A trustee has the power to perform in a
reasonable and prudent manner every act that a reasonable and
prudent person would perform incident to the collection,
preservation, management, use, and distribution of the trust
property to accomplish the desired result of administering the
trust legally and in the trust beneficiaries' best interest.
(2) Subject to the standards described in subsection (1) and
except as otherwise provided in the trust instrument, a trustee
possesses all of the following specific powers:
(a) To take possession, custody, or control of property
transferred to the trust.
(b) To retain property that the trustee receives, including
property in which the trustee is personally interested, in
accordance with the Michigan prudent investor rule.
(c) To receive property from a fiduciary or another source
that is acceptable to the trustee.
(d) To perform, compromise, or refuse to perform a contract of
the settlor that is an obligation of the trust, as the trustee may
determine under the circumstances. In performing an enforceable
contract by the settlor to convey or lease land, if the contract
for a conveyance requires the giving of a warranty, the deed or
other instrument of conveyance to be given by the trustee must
contain the warranty required. The warranty is binding on the trust
as though made by the settlor, but does not bind the trustee except
in the trustee's fiduciary capacity. The trustee, among other
possible courses of action, may do either of the following:
(i) Execute and deliver a deed of conveyance for cash payment
of money remaining due or the purchaser's note for the money
remaining due secured by a mortgage on the land.
(ii) Deliver a deed in escrow with directions that the
proceeds, when paid in accordance with the escrow agreement, be
paid to the trustee, as designated in the escrow agreement.
(e) To satisfy a settlor's written charitable pledge
irrespective of whether the pledge constitutes a binding obligation
of the settlor or was properly presented as a claim, if in the
trustee's judgment the settlor would have wanted the pledge
completed under the circumstances.
(f) To deposit trust money in a bank, including a bank
operated by the trustee and to invest and reinvest trust property
as would a prudent investor acting in accordance with the Michigan
prudent investor rule.
(g) To acquire property, including property in this or another
state or country, in any manner for cash or on credit, at public or
private sale; and to manage, develop, improve, exchange, partition,
or change the character of trust property.
(h) To make an ordinary or extraordinary repair or alteration
in a building or another structure, to demolish an improvement, or
to raze an existing or erect a new party wall or building.
(i) To subdivide, develop, or dedicate land to public use; to
make or obtain the vacation of a plat or adjust a boundary; to
adjust a difference in valuation on exchange or partition by giving
or receiving consideration; or to dedicate an easement to public
use without consideration.
(j) To enter for any purpose into a lease as lessor or lessee,
with or without an option to purchase or renew, for any term.
(k) To enter into a lease or arrangement for exploration and
removal of minerals or another natural resource or to enter into a
pooling or unitization agreement.
(l) To abandon property if, in the trustee's opinion, the
property is valueless, or is so encumbered or in such a condition
that it is of no benefit to the trust.
(m) To vote a stock or other security in person, by general or
limited proxy, or in another manner provided by law.
(n)
To pay a call, assessment, and another or other amount
chargeable or accruing against or on account of a security.
(o) To hold property in the name of a nominee or in another
form without disclosure of the interest of the trust. However, the
trustee is liable for an act of the nominee in connection with the
property so held.
(p) To insure the trust property against damage, loss, or
liability and to insure the trustee against liability as to a third
person.
(q) To borrow money for any purpose from the trustee or others
and to mortgage or pledge trust property.
(r) To effect a fair and reasonable compromise with a debtor
or obligor, or extend, renew, or in any manner modify the terms of
an obligation owing to the trust. If the trustee holds a mortgage,
pledge, or another lien on property of another person, the trustee
may, instead of foreclosure, accept a conveyance or transfer of
encumbered property from the property's owner in satisfaction of
the indebtedness secured by a lien.
(s) To pay a tax, an assessment, the trustee's compensation,
or another expense incident to the administration of the trust.
(t) To sell or exercise a subscription or conversion right or
to consent, directly or through a committee or another agent, to
the reorganization, consolidation, merger, dissolution, or
liquidation of a business enterprise.
(u) To allocate an item of income or expense to either trust
income or principal, as permitted or provided by law.
(v) To employ, and pay reasonable compensation for services
performed by, a person, including an auditor, investment advisor,
accountant, appraiser, broker, custodian, rental agent, realtor, or
agent, even if the person is associated with the trustee, for the
purpose of advising or assisting the trustee in the performance of
an administrative duty; to act without independent investigation
upon such a person's recommendation; and, instead of acting
personally, to employ 1 or more agents to perform an act of
administration, whether or not discretionary.
(w) To employ an attorney to perform necessary legal services
or to advise or assist the trustee in the performance of the
trustee's administrative duties, even if the attorney is associated
with the trustee, and to act without independent investigation upon
the attorney's recommendation. An attorney employed under this
subdivision
shall receive reasonable compensation for that his or
her employment.
(x) To prosecute, defend, arbitrate, settle, release,
compromise, or agree to indemnify a claim or proceeding in any
jurisdiction or under an alternative dispute resolution procedure.
The trustee may act under this subsection for the trustee's
protection in the performance of the trustee's duties.
(y) To sell, exchange, partition, or otherwise dispose of, or
grant an option with respect to, trust property for any purpose
upon any terms or conditions.
(z) To continue or participate in a business or venture in any
manner, in any form, and for any length of time.
(aa) To change the form, in any manner, of a business or
venture in which the settlor was engaged at the time of death.
(bb) To provide for exoneration of the trustee from personal
liability in a contract entered into on behalf of the trust.
(cc) To respond to environmental concerns and hazards
affecting trust property as provided in section 7407.
(dd) To collect, pay, contest, settle, release, agree to
indemnify against, compromise, or abandon a claim of or against the
trust, including a claim against the trust by the trustee.
(ee) To respond to a tax matter as provided in section 7408.
(ff) To divide trust property into 2 or more separate portions
or trusts with substantially identical terms and conditions and to
allocate property between them, in order to simplify administration
for generation skipping transfer tax purposes, to segregate
property for management purposes, or to meet another trust
objective.
(gg) To make a payment of money, or other property instead of
money, to or for a minor or incapacitated individual as provided in
section 7409.
(hh) To make a distribution or division of trust property in
cash or in kind, or both; to allot a different kind or
disporportionate portion of, or an undivided interest in, trust
property among beneficiaries and determine the value of allotted
trust property; or to distribute an unclaimed share as described in
section 3916.
(ii) To transfer the property of a trust to another
jurisdiction and appoint, compensate, or remove a successor
trustee, individual or corporate, for trust property in another
jurisdiction, with any trust powers set out in this part that the
trustee delegates to the successor trustee.
(jj) To execute and deliver an instrument that accomplishes or
facilitates the exercise of a power vested in the trustee.
(3) A trust that contains substantially identical provisions
as another trust established for the same beneficiary or
beneficiaries may be consolidated and administered as 1 trust. If
the rule against perpetuities speaks from different dates with
reference to the trusts or if there are other variations in terms,
consolidation may still take place, but the property of the trusts
shall be maintained in separate accounts if necessary to recognize
and give effect to the differences.
Sec. 7502. (1) A trustee of a trust described in section
7501(1) shall pay to the personal representative of the settlor's
estate the amount from time to time that the personal
representative certifies in writing to the trustee is required to
pay the administration expenses of the settlor's estate; an
enforceable and timely presented claim of a creditor of the
settlor, including a claim for the settlor's funeral and burial
expenses; and homestead, family, and exempt property allowances.
Without liability to a trust beneficiary or another party, the
trustee may rely on the certificate of the personal representative.
In the event there is no personal representative appointed for the
settlor's estate, the trustee shall pay directly to the creditor an
enforceable and timely served claim of a creditor of the settlor,
including a claim for the settlor's funeral and burial expenses.
When
there is no If a personal representative is not appointed
for
the settlor's estate within 4 months after the date of the
publication of notice to creditors, a trust described in section
7501(1) is not liable for payment of homestead, family, or exempt
property allowance
allowances. A payment made by a trustee is
subject to this section, but the payment shall be made exclusively
out of property, or the proceeds of property, that is includable in
the settlor's gross estate for federal estate tax purposes, other
than
assets proscribed described in section
7501(2), (3), and
(4).
(2) Unless a settlor provides in his or her will or, in the
absence of such a provision, designates in the trust the money or
property passing under a trust to be used as described in section
7501, the administration expenses of the settlor's estate; an
enforceable and timely filed claim of a creditor of the settlor,
including a claim for the settlor's funeral and burial expenses; or
homestead, family, and exempt property allowances, to be paid in
accordance with subsection (1), shall be paid from the property of
the trust in the following order:
(a) Property of the trust residue remaining after all
distributions that are to be satisfied by reference to a specific
property or type of property, fund, money, or statutory amount.
(b) Property that is not to be distributed out of specified or
identified property or a specified or identified item of property.
(c) Property that is to be distributed out of specified or
identified property or a specified or identified item of property.
Sec. 7508. (1) Upon the expiration of 4 months after the date
of the publication of the notice to creditors, the trustee shall
proceed to pay the claims allowed against the trust in the order of
priority prescribed in section 7503(2)(f) to (g), after making
provision for costs and expenses of trust administration, for
reasonable
funeral and burial expenses, for the homestead, family,
and
exempt property allowances, for each claim already presented
that is not yet allowed or whose allowance is appealed, and for
each unbarred claim that may yet be presented. A claimant whose
claim is allowed, but not paid as provided in this section, may
petition the court to secure an order directing the trustee to pay
the claim to the extent that money of the trust is available for
the payment.
(2) At any time, the trustee may pay a claim that is not
barred, with or without formal presentation, but is individually
liable to another claimant whose claim is allowed and who is
injured by the payment if either of the following occurs:
(a) Payment is made before the expiration of the time limit
stated in subsection (1) and the trustee fails to require the payee
to give adequate security for the refund of any of the payment
necessary to pay another claimant.
(b) Payment is made, due to the negligence or willful fault of
the trustee, in a manner that deprives the injured claimant of
priority.
(3) If a claim is allowed, but the whereabouts of the claimant
is unknown at the time the trustee attempts to pay the claim, upon
petition by the trustee and after notice the court considers
advisable, the court may disallow the claim. If the court disallows
a claim under this subsection, the claim is barred.