HB 4408 — Probate: trusts; powers of appointment; revise. Amends secs. 5a & 14 of 1967 PA 224 (MCL 556.115a & 556.124).

HB-4408, As Passed House, June 24, 2026 HOUSE BILL NO.

(1) A trustee with a presently exercisable discretionary power to make distributions of income or principal of an irrevocable trust to or for the benefit of 1 or more beneficiaries of the trust may, unless the terms of the first trust expressly provide otherwise, exercise the power by appointing all DAW H02088'25_HB4408_INTR_1H02088'25_HB4408_APH_1 x42kzgo6fahd 1 or part of the property subject to the power in favor of the trustee of a second trust, provided that if all of the following conditions are satisfied:

(a) A special or general power of appointment, including a power to appoint trust property to persons who are not DAW H02088'25_HB4408_INTR_1H02088'25_HB4408_APH_1 x42kzgo6fahd 1 beneficiaries of the first trust, to 1 or more of the beneficiaries of the second trust who are permissible appointees of the trustee's presently exercisable discretionary distribution power over the first trust.

(b) A power to make distributions is not discretionary if it is limited by a definite and ascertainable standard, but instructions for the trustee to consider such things as a DAW H02088'25_HB4408_INTR_1H02088'25_HB4408_APH_1 x42kzgo6fahd 1 beneficiary's best interests, welfare, comfort, happiness, or general development do not in themselves constitute definite and ascertainable standards, regardless of whether the trustee is also instructed or permitted to consider resources outside the trust that may be available to the beneficiary.

DAW H02088'25_HB4408_INTR_1H02088'25_HB4408_APH_1 x42kzgo6fahd 1 (a) A new irrevocable trust for purposes of the notice requirements of section 7814(2)(c) of the MTC, MCL 700.7814.

DAW H02088'25_HB4408_INTR_1H02088'25_HB4408_APH_1 x42kzgo6fahd 1 (2) In determining the any finite period during which the vesting of a future interest may be suspended or postponed by the exercise of a power of appointment, if a second power is created by the exercise of a first power, and the first power is a presently exercisable general power, the second power is considered to have been created on the effective date of the instrument of exercise.

(b) "Second power" means a power of appointment created by the DAW H02088'25_HB4408_INTR_1H02088'25_HB4408_APH_1 x42kzgo6fahd exercise of a first power.

Final Page DAW H02088'25_HB4408_INTR_1H02088'25_HB4408_APH_1 x42kzgo6fahd