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HB 4864

Probate: trusts; uniform statutory rule against perpetuities; revise to reflect limitation of the personal property trust perpetuities act to certain property. Amends secs. 3 & 5 of 1988 PA 418 (MCL 554.73 & 554.75).

2023-2024 Regular Session Introduced by Tyrone Carter and 6 co-sponsors

Michigan HB 4864 clarifies trust creation timing, tightens rules for second powers, and uses a 360-year measure to preserve GST-planning tools and reduce litigation risk.

REFERRED TO COMMITTEE ON CIVIL RIGHTS, JUDICIARY, AND PUBLIC SAFETY
#probate:trusts #property:other
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Bill Summary · HB 4864

Summary — HB 4864 (Uniform Statutory Rule Against Perpetuities amendments)

Sponsor: Rep. Douglas C. Wozniak
Statutory changes: amends 1988 PA 418 — Uniform Statutory Rule Against Perpetuities (MCL 554.73 & 554.75)
Status: Passed House (11/14/2024); received in Senate (5/14/2025) and referred to the Committee on Civil Rights, Judiciary, and Public Safety. The bill is tie‑barred to HB 4863 (both must be enacted for either to take effect).

Purpose / Intent

HB 4864 makes targeted, technical amendments to Michigan’s Uniform Statutory Rule Against Perpetuities to clarify how certain powers of appointment and interests created by the exercise of powers are treated for perpetuities timing. The changes are intended to (a) align interplay among the Rule Against Perpetuities, the Powers of Appointment Act, and the Personal Property Trust Perpetuities Act (2008 PA 148), and (b) preserve Michigan trust‑planning tools commonly used to address federal generation‑skipping transfer (GST) tax exposure (often called the “Delaware tax trap”).

Key provisions and changes

  • Clarifies when a trust created by exercise of a power of appointment is “created”: a trust so created is treated as created when the power has been irrevocably exercised, or when a revocable exercise becomes irrevocable.
  • Changes language governing the timing rules for suspension/postponement of vesting by a power of appointment:
    • Replaces the term “the period” with “any finite period” (narrowing scope to finite periods).
    • Removes the phrase “suspended or” in specified statutory language (streamlines the suspension/postponement framing).
  • Tightens the rule for trustee‑created second trusts: where a trustee with a presently exercisable discretionary distribution power appoints property into a second trust, beneficiaries of the second trust must be permissible appointees under the trustee’s distribution power in the first trust.
  • Amends section 5(2) of the Uniform Statutory Rule Against Perpetuities to address “second powers” created by exercise of a first power when those second powers fall under the Personal Property Trust Perpetuities Act:
    • Confirms section 2 of the Rule (the statutory perpetuities measurement rules) may apply to interests/powers created by exercise of a second power, but only to the extent of that exercise.
    • Where section 2 is applied in that circumstance, replaces the usual 90‑year measuring period with a 360‑year period for determining satisfaction of specified subsection tests (section 2(1)(b), 2(2)(b), 2(3)(b)) and for reforming dispositions under section 4.

Who is affected

  • Trust drafters, estate planning attorneys, fiduciaries (trustees), banks and trust companies, and beneficiaries of trusts — particularly those using multi‑tier appointment structures and personal property trusts.
  • Executors and courts interpreting creation/vesting timing and applying perpetuities rules.
  • The changes are directed at making Michigan hospitable for certain GST‑planning structures and reducing the risk of litigation about perpetuities timing.

Procedural / timeline notes

  • HB 4864 (substitute H‑1) was adopted in the House and passed with immediate effect (11/14/2024). The bill was transmitted to the Senate and, as of 5/14/2025, was referred to the Senate committee noted above.
  • The bill contains an enacting clause tying its effectiveness to enactment of HB 4863 (both bills must be enacted).
  • Nonpartisan House Fiscal Agency analysis states no fiscal impact on state or local governments.

Support / context

  • Committee testimony described the amendments as technical fixes following changes made by 2022 PA 154 to the Personal Property Trust Perpetuities Act; supporters (including the Probate and Estate Planning Section of the State Bar of Michigan and the Attorney General) argued the bill avoids uncertainty and keeps Michigan competitive for trust administration and GST‑planning.

If you want, I can: (1) extract and display the specific statutory text changes side‑by‑side with current law, or (2) produce a short plain‑language explainer for trustees and estate planners. Which would be most useful?

Compiled from official sources — confirm details with the bill’s official record.

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