Bill > HB4408

This bill amends the Powers of Appointment Act of 1967 to provide more clarity and flexibility for trustees managing irrevocable trusts. Specifically, the bill allows a trustee with a discretionary power to distribute trust income or principal to transfer all or part of the trust property to a second trust, subject to several conditions. These conditions include ensuring that the beneficiaries of the second trust are permissible appointees of the original trust, maintaining certain tax and estate planning considerations, and protecting existing beneficiary interests. The bill clarifies what constitutes a discretionary power, provides guidelines for creating a second trust, and addresses how the transfer of trust assets should be treated for notice and fee purposes. Additionally, the bill modifies provisions related to the vesting of future interests in trusts, specifically addressing how the period for postponing the vesting of future interests is calculated when powers of appointment are exercised. The changes aim to provide trustees with more administrative flexibility while maintaining protections for beneficiaries and preserving the intent of the original trust instrument.

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https://legislature.mi.gov/Bills/Bill?ObjectName=2025-HB-4408