HB-6540, As Passed House, December 3, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 6540

     A bill to amend 1988 PA 418, entitled

"Uniform statutory rule against perpetuities,"

by amending section 5 (MCL 554.75), as amended by 2008 PA 149.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 5. (1) Section 2 does not apply to any of the following:

     (a) A nonvested property interest or a power of appointment

arising out of a nondonative transfer, except a nonvested property

interest or a power of appointment arising out of a premarital or

postmarital agreement; a separation or divorce settlement; a

spouse's election; a similar arrangement arising out of a

prospective, existing, or previous marital relationship between the

parties; a contract to make or not to revoke a will or trust; a

contract to exercise or not to exercise a power of appointment; a

transfer in satisfaction of a duty of support; or a reciprocal

transfer.

     (b) A fiduciary's power relating to the administration or

management of assets, including the power of a fiduciary to sell,

lease, or mortgage property, and the power of a fiduciary to

determine principal and income.

     (c) A power to appoint a fiduciary.

     (d) A discretionary power of a trustee to distribute principal

before termination of a trust to a beneficiary having an

indefeasibly vested interest in the income and principal.

     (e) A property interest, power of appointment, or any other

arrangement that was not subject to the common-law rule against

perpetuities or is excluded by another statute.

     (f) Except as provided in subsection (2), an interest in, or

power of appointment over, personal property held in a trust that

is either revocable on or created after the effective date of the

personal property to which the trust perpetuities act, 2008 PA 148,

MCL 554.91 to 554.94, applies.

     (2) Section 2 is applicable to an interest in, or power of

appointment over, personal property held in trust to which the

trust perpetuities act, 2008 PA 148, MCL 554.91 to 554.94, applies

if the interest or power was created, or property was made subject

to the interest or power, by the exercise of a second power. If

section 2 is applicable to an interest or power under this

subsection, it applies only to the extent of the exercise of the

second power, and instead of using a period of 90 years to

determine whether section 2(1)(b), (2)(b), or (3)(b) is satisfied,

or whether to reform a disposition under section 4, a period of 360

years shall be used.

     (3) As used in this section, "second power" means that term as

defined in section 2 of the personal property trust perpetuities

act, 2008 PA 148, MCL 554.92.

     Enacting section 1. This amendatory act does not take effect

unless House Bill No. 6539 of the 94th Legislature is enacted into

law.