A Warner Norcross & Judd LLP partner was instrumental in drafting the new Michigan Trust Code, which was signed into law by Gov. Jennifer Granholm on June 18, 2009.
Mark K. Harder chaired the State Bar of Michigan committee that spent more than five years writing the MTC, which governs how trusts are established and administered in the state. As chair, he oversaw the drafting of the Code, negotiated its terms with other stakeholders, including the Michigan Bankers Association, the Michigan Probate Judges Association and the Department of the Attorney General, and provided testimony at the Senate and House Judiciary Committee hearings on the legislation. Harder served as the reporter for the MTC, which received unanimous support from both the Michigan House and Senate.
The new state law, which will go into effect April 1, 2010, was based on model legislation first proposed in 2000. The Michigan Trust Code both modernizes and provides uniformity for the law of trusts, filling in important gaps in the previous legislation. The MTC is Michigan’s first comprehensive statute in the area.
"The Michigan Trust Code represents a significant advance in the law of trusts, ensuring that our citizens now have a single-source, comprehensive and modern body of law to govern an area of growing importance," explained Harder, who concentrates his practice in trusts and estates. "We were pleased to receive bipartisan support from the Michigan Legislature, which indicates strong confidence in the MTC.
"Many people gave generously of their time to research, write and finalize the MTC. The result is legislation that preserves – and enhances – well-established Michigan law."
Harder served as chair and reporter for the Michigan Trust Code Committee of the Probate and Estate Planning Section of the State Bar of Michigan. The committee worked in consultation with the Michigan Bankers Association Trust Counsel Committee and the Michigan Probate Judges Association to develop the MTC.
The committee used the model legislation, known as the Uniform Trust Code, as its starting point but specifically tailored the language to meet Michigan’s needs and to preserve long-standing law.
The new legislation provides important benefits to Michigan citizens, including:
Providing certainty. Harder notes that sparse case law, along with incomplete and antiquated statutes, have left families, attorneys, bankers and trustees with many unanswered questions. The MTC answers many of the questions regarding the formation, administration, modification and termination of trusts, providing certainty to citizens to aid them in their planning and to the courts in resolving questions and disputes.
Providing uniformity with other states. Since the new legislation is based on the Uniform Trust Code, which has been adopted by 21 states and the District of Columbia, Michigan courts can more easily look to the laws of other states for guidance in resolving cases.
Modernizing the law of trusts. Harder said the MTC also modernizes the law of trusts in several important respects by providing a comprehensive set of rules for trust modification and termination, dealing specifically with revocable trusts used as substitutes for wills, and defining the nature and status of trust protectors.
Creating a level playing field for Michigan. In the past, states such as Ohio, Florida and Arizona had more attractive laws regarding trusts and trustees, which prompted some Michigan residents to move their assets out of state. Harder said that the MTC neutralizes this attraction, allowing Michigan providers to retain the management and administration of these trusts – along with the jobs they bring.
"While the law does not go into effect for nearly 10 months, we expect the MTC will have an immediate impact," Harder said. "As Michigan residents update existing trusts or prepare new ones, they will be doing so with an eye to the MTC revisions."
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