Michigan Trust Owners: Don’t Share Your Whole Trust—Do This Instead
0:32 Well, good afternoon, Michiganders. Welcome back to Tuesday with Tom, Michigan's Only podcast, where we talk about estate planning, a state settlement, and everything in between. As always, I'm your host, Tom Doyle, a state planning attorney, lifelong Michigander and your guide to planning for your future. Well, a brief recap of the last episode. I talked about estate and gift taxes, what changed and what didn't in Trump's Big Beautiful Bills. So if you're asking yourself, how has Trump's Big Beautiful Bill affected me and my estate plan, please listen to the last week last episode where I cover that topic.
1:24 Today's show. Well, if you're a trustee in Michigan or you're planning to use a trust as part of your state plan, today's episode is a must listen. We're diving into Michigan's updated Certificate of Trust law, which has now been effected since March of twenty eighteen. This law can simplify how you manage your trust, how you protect your privacy, and streamline transactions. So we'll break down what you need to know. But please remember what I am about to discuss is as always for educational purposes only, It is not intended to be legal advice. Every person's situation is different, so be sure to talk with your attorney to figure out what makes the most sense for you and your estate plan. So let's just start an understanding Michigan certificate of trust law. Let's just start with the obvious question, what is a certificate of trust? Well, a certificate of trust is essentially a summary document that proves a trust exists without disclosing the full contents of the trust. So trustees use the certificate, for example, when dealing with banks.
2:57 So if you've got a trust and you're going to be dealing with a bank account relative to that trust, you're going to need a certificate of trust for the bank, dealing with title companies when you're selling real estate or other financial institutions. And so, rather than handing over a full copy of your trust document, which obviously contains sensitive information perhaps about your beneficiaries, something about assets, which really the banks and the title companies don't need to have, the trustee can simply present a certificate of trust. Think of it kind of like showing your driver's license instead of your birth certificate. It's just enough information to prove you are who you say you are without revealing more than is necessary. Well, it's been some time now. Twenty eighteen is when Michigan updated excuse me, it's trust laws under the Michigan of Trust Code. Before that, certificate the trust were very less standardized and more burdensome, and in fact, we had two different kinds of certificates of trust. You might have a certificate of trust that related to your trust document, but then if you were trying to sell real estate, the title company required what was then called a certificate of trust existence. Well, the twenty eighteen revision
4:29 created a uniform format and clarified the rights of both trustees and third parties. Now I know twenty eighteen, you might be saying to yourself, Well, twenty eighteen was quite a while ago. Why should we carry about it. Well, if you have a trust as part of your state plan and that or you're trying to settle in a state on a trust that was created before twenty eighteen, you don't have a current certificate of trust that you're going to need to have. So it's not unusual today to have clients with older estate plans where they haven't updated them in order to make sure that the certificate of trust was keeping up with the change under Michigan law.
5:20 So here's what a valid certificate of trust must include. One the name and date of the trust. Two, the names of the trustees. Three, a statement of the trustees' authority to act. Four whether the trust is revocable or irrevocable. Five names of any successor trustees, six trustees, a trust taxpayer identification number if it has one. And lastly, a statement that the trust has not been revoked or amended in any way that affects its validity. So those are the things that a certificate of trust has to have per Michigan law. So if you have an old certificate of trust that doesn't meet all of those requirements, you don't have a certificate of trust that is likely going to be accepted at the time that is needed. Now, what are third parties allowed to ask for? So you have a certificate of trust, but what is your for example, bank or real estate agent allowed to ask you for. Well, under Michigan certificate of trust law, third parties, again like banks or real estate agents, must accept a valid certificate of trust that's presented in good faith. That means they
6:54 can't demand to see the full trust document. However, they are allowed to ask for reasonable supporting document documentation, for example, proof of identity or signature authority. I'm sorry, got a little bit of a cold going on here on this beautiful summer day. But importantly, if a third party relies upon a properly executed certificate of trust in good faith, they are protected from liability, which means both sides benefit from a clear, fair and steam streamlined process. So why is a current certificate of trust important for estate planning? Well, the law when it was enacted is basically a win for both privacy and efficiency. First, it keeps the terms of your trust and beneficiary information confidential. You don't have to give a copy of your entire trust that would have that information in it. And second, it makes it much easier for trustees to manage assets, particularly when they're going to be dealing with real estate or financial institutions.
8:15 For example, if you're selling a home that's held in a trust, you don't need to provide the full trust agreement that would then get recorded with a registered deeds office that would then become a public record. All you have to do is provide the certificate of trust that obviously can speed up the process. You don't have a title company that needs to read through your trust. It maintains your privacy because it's not going to get recorded with the registered deeds, So it is beneficial to you in that event. If you are selling real estate that is currently in a trust, which is oftentimes where you're going to find that happens, you might have had perhaps you're settling a trust today for somebody who created that trust before twenty eighteen, and now you have real estate and you're trying to sell the real estate. Well, the title company relative to that sale is going to want a current certificate of trust. If you had one prepared, or the maker of the trust had one prepared prior to twenty eighteen, you are likely going to find the title company saying that is not sufficient. It needs to be a new certificate of trust. So if you need a new certificate of trust, you can obviously ask your attorney first to review your current existing certificate of trust
9:47 to determine whether or not it is appropriate, and if not, you could look at having new one created for you. You need to make sure, obviously that all of the elements are card by Michigan law are contained within that c certificate of trust, and you certainly need to keep copies of that certificate of trust with your estate plan. A question arises, though, as to should you today go out and have a new certificate of trust prepared even if you don't need it today. So let's say you had a trust that was prepared before twenty eighteen, You're looking at all over, you realize you have an old certificate of trust, and you ask the question, well, should I go and have a certificate of trust prepared today? Will likely not? You really only need that new certificate of trust when you're going to use it. Why, because you're also going to find that pretty much all the banks, certainly financial institutions and title companies, they're going to insist that not only does that certificate of trust contain all those things that I just discussed, but they're going to want it to be created within the last six months before you're using it. So it doesn't make any sense to just go ahead and have one prepared today, only to find out that you're not going to use it for a number of years, Only to find out that after a number of years, a title company or a
11:18 bank or somebody's going to want a new one. So generally speaking, even if you go back and review your estate plan today and it has an old certificate of trust, it might not be necessary for you to create one now, but it will be required at some point in time in the future. Well, if you have a question about your trust or help drafting a certificate of trust, please contact us, or better yet, if you go to DOYLELOWPC dot com, which is our website. There you're going to find our legal store. At the legal store you can actually order an updated certificate of trust directly through the Internet.
12:31 So that's something that you can do at DOYLELOWPC dot com. Of course, if you need to have a personal consultation, we can arrange for that. Amand and I could arrange for that either through an in person appointment in the Grand Rapids office or Lansing location or wherever you happen to be in the state of Michigan. We could consult with you by zoom or phone and help you determine what is needed. We end up regularly people simply contacting us needing a new certificate of trust, and it can be paired normally fairly expeditiously. When that time comes, so simply head on over to Doyle opc dot com. There you're going to learn how you can schedule your consultation and again you can visit the Legal store to see how you can order a certificate of trust and other legal documents such as powers of attorney directly from us online. Well, I realized this was kind of a short episode today, but it's just a brief summary about certificate certificate of trust if that's relevant to you. As always, though, if you have a comment about about the program, or a question that you'd like to have answered, or a topic that you'd like to have me cover in a future episode,
14:04 simply head on over to Tuesday with Tom dot com. You can leave me a voice message by clicking on the microphone or send me an email to Tom at Tuesday with Tom dot com. Please do be sure to follow us on Facebook and fight your friends and families to do the same. That would be Tuesday with Tom and of course the office. Facebook is also Doyle Law PC. And don't forget to subscribe to our email list at Tuesday Withthtim dot com so you can stay up to date with new episodes and important estate planning tips and remember remember to You can listen to the show wherever you enjoy your podcast. We're on a lot of different channels such as Apple Podcasts, Spotify, Amazon Music, Google Podcast, iHeartRadio, and Speaker, and of course if you have a smart speaker, you can always ask your smart speaker to play Tuesday with Tom as well. Well. Thanks again for spending part of your day with us, and until next time, take care, stay safe, and have an awesome day and an awesome week here in Michigan. Tuesday with Tom has been brought to you by the estate planning attorneys at Doyle Law PC.
15:29 To learn how we can help you with your estate plan or with settling a loved one's estate, please call us today at five one seven three two three seven three sixty six. That's five one seven three two three seven three sixty six.
