Committee adopts substitute to HB 4034; hears testimony on uniform unitrust and perpetuities fixes

The Michigan House Judiciary Committee adopted the H-1 substitute to House Bill 4034 and heard testimony on House Bill 4033, which would create a Uniform Unitrust Act, and House Bill 4034, which would make technical corrections to Michigan's statutory rule against perpetuities.

Representative Wozniak, the bills's sponsor, told the committee the measures had broad prior support. "This is not the first go round with these bills," Wozniak said, adding that the measures "were introduced last term. HO or house bill 4,033 was passed 100 and 9 to nothing, and 34 was passed 102 to nothing."

Attorney James Spica, who testified as a technical expert, described the primary aims. He said HB 4033 would allow trustees who wish to pursue total-return investing to elect unitrust treatment for older trusts that distinguish income and remainder beneficiaries. "The act will allow a trustee who is energetic enough in seeking economic returns for beneficiaries to elect to treat the trust as a unitrust," Spica said. He added the proposal would align Michigan with other states: "This is a facility that, if enacted, bring Michigan in line with 36 other states in the union that have adopted some form of unitrust statute."

Spica also urged the committee to correct an error in the substitute's enacting language that appears to tie HB 4034 to HB 4033. "They don't have to do with one another," he said, calling an enacting-section reference an error and saying the two acts operate independently because they concern different legal fields.

Spica explained that HB 4034 would make technical fixes to the uniform statutory rule against perpetuities to reflect a 2022 amendment to Michigan's Personal Property Trust Perpetuities Act that affected federal step-up-in-basis tax treatment. He described the bills as products of uniform-law deliberations and noted he serves as a Michigan delegate to the Uniform Law Commission.

Committee members asked clarifying questions but took no final vote on the bills themselves. The recorded formal action during the session was adoption of the H-1 substitute to HB 4034. Committee counsel called the roll for the substitute adoption; the clerk recorded nine yes votes and no nays, and the substitute was adopted.

The sponsor asked the committee to advance the bills when a vote is scheduled; no committee report or final passage of the underlying bills was recorded in the transcript.