Michigan Laws 700.7802 – Duty of loyalty
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Terms Used In Michigan Laws 700.7802
- Agent: includes , but is not limited to, an attorney-in-fact under a durable or nondurable power of attorney and an individual authorized to make decisions as a patient advocate concerning another's health care. See Michigan Laws 700.1103
- Attorney: means , if appointed to represent a child under the provisions referenced in section 5213, an attorney serving as the child's legal advocate in the manner defined and described in section 13a of chapter XIIA of the probate code of 1939, 1939 PA 288, MCL 712A. See Michigan Laws 700.1103
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: includes , but is not limited to, the following:
(i) In relation to a trust, a person that is a trust beneficiary as defined in section 7103. See Michigan Laws 700.1103Claim: includes , but is not limited to, in respect to a decedent's or protected individual's estate, a liability of the decedent or protected individual, whether arising in contract, tort, or otherwise, and a liability of the estate that arises at or after the decedent's death or after a conservator's appointment, including funeral and burial expenses and costs and expenses of administration. See Michigan Laws 700.1103 Contract: A legal written agreement that becomes binding when signed. Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name. Court: means the probate court or, when applicable, the family division of circuit court. See Michigan Laws 700.1103 Decedent: A deceased person. Descendant: means , in relation to an individual, all of his or her descendants of all generations, with the relationship of parent and child at each generation being determined by the definitions of child and parent contained in this act. See Michigan Laws 700.1103 Estate: includes the property of the decedent, trust, or other person whose affairs are subject to this act as the property is originally constituted and as it exists throughout administration. See Michigan Laws 700.1104 Fiduciary: A trustee, executor, or administrator. Fiduciary: includes , but is not limited to, a personal representative, funeral representative, guardian, conservator, trustee, plenary guardian, partial guardian, and successor fiduciary. See Michigan Laws 700.1104 Financial institution: means an organization authorized to do business under state or federal laws relating to a financial institution and includes, but is not limited to, a bank, trust company, savings bank, building and loan association, savings and loan company or association, credit union, insurance company, and entity that offers mutual fund, securities brokerage, money market, or retail investment accounts. See Michigan Laws 700.1104 Interests of the trust beneficiaries: means the beneficial interests provided in the terms of the trust. See Michigan Laws 700.7103 Michigan prudent investor rule: means the fiduciary investment and management rule prescribed by part 5 of this article. See Michigan Laws 700.1106 Money: means legal tender or a note, draft, certificate of deposit, stock, bond, check, or credit card. See Michigan Laws 700.1106 Parent: includes , but is not limited to, an individual entitled to take, or who would be entitled to take, as a parent under this act by intestate succession from a child who dies without a will and whose relationship is in question. See Michigan Laws 700.1106 Person: means an individual or an organization. See Michigan Laws 700.1106 Proceeding: includes an application and a petition, and may be an action at law or a suit in equity. See Michigan Laws 700.1106 Property: means anything that may be the subject of ownership, and includes both real and personal property or an interest in real or personal property. See Michigan Laws 700.1106 Statute: A law passed by a legislature. terms of the trust: means the manifestation of the settlor's intent regarding a trust's provisions as expressed in the trust instrument or as may be established by other evidence that would be admissible in a judicial proceeding. See Michigan Laws 700.1107 Trust: includes , but is not limited to, an express trust, private or charitable, with additions to the trust, wherever and however created. See Michigan Laws 700.1107 Trust beneficiary: means a person to whom 1 or both of the following apply:
(i) The person has a present or future beneficial interest in a trust, vested or contingent. See Michigan Laws 700.7103Trustee: A person or institution holding and administering property in trust. Trustee: includes an original, additional, or successor trustee, whether or not appointed or confirmed by the court. See Michigan Laws 700.1107
(1) A trustee shall administer the trust solely in the interests of the trust beneficiaries.
(2) Subject to the rights of persons dealing with or assisting the trustee as provided in section 7912, a sale, encumbrance, or other transaction involving the investment or management of trust property entered into by the trustee for the trustee’s own personal account or which is otherwise affected by a substantial conflict between the trustee’s fiduciary and personal interests is voidable by a trust beneficiary affected by the transaction unless 1 or more of the following apply:
(a) The transaction was authorized by the terms of the trust.
(b) The transaction was approved by the court after notice to the interested persons.
(c) The trust beneficiary did not commence a judicial proceeding within the time allowed by section 7905.
(d) The trust beneficiary consented to the trustee’s conduct, ratified the transaction, or released the trustee in compliance with section 7909.
(e) The transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming trustee.
(f) The transaction is otherwise permitted by statute.
(3) A sale, encumbrance, or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with any of the following:
(a) The trustee’s spouse.
(b) The trustee’s descendant, sibling, or parent or the spouse of a descendant, sibling, or parent.
(c) An agent or attorney of the trustee.
(d) A corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee’s best judgment.
(4) A transaction that does not concern trust property in which the trustee engages in the trustee’s individual capacity involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the trust.
(5) An investment by a trustee in securities of an investment company or investment trust to which the trustee, or its affiliate, provides services in a capacity other than as trustee is not presumed to be affected by a conflict between personal and fiduciary interests if the investment otherwise complies with the Michigan prudent investor rule. In addition to its compensation for acting as trustee, the trustee may be compensated by the investment company or investment trust for providing those services out of fees charged to the trust. If the trustee receives compensation from the investment company or investment trust for providing investment advisory or investment management services, the trustee shall at least annually notify the persons entitled under section 7814 to receive a copy of the trustee’s annual report of the rate and method by which that compensation was determined.
(6) In voting shares of stock or in exercising powers of control over similar interests in other forms of enterprise, the trustee shall act in the best interests of the trust beneficiaries. If the trust is the sole owner of a corporation or other form of enterprise, the trustee shall elect or appoint directors or other managers to manage the corporation or enterprise in the best interests of the trust beneficiaries.
(7) This section does not preclude the following transactions, if fair to the trust beneficiaries:
(a) An agreement between a trustee and a trust beneficiary relating to the appointment or compensation of the trustee.
(b) Payment of reasonable compensation to the trustee.
(c) A transaction between a trust and another trust, decedent‘s estate, or conservatorship of which the trustee is a fiduciary or in which a trust beneficiary has an interest.
(d) A deposit of trust money in a financial institution operated by or affiliated with the trustee.
(e) An advance by the trustee of money for the protection of the trust.