MI Bar Wills Trusts and Estates 4

Question 1

Under the Michigan Trust Code, a valid private express trust requires all of the following EXCEPT:

Accepted Answer

A written instrument signed by two witnesses

Answer

Michigan trusts need capacity, intent, ascertainable beneficiaries (or an exception), and trustee duties, but an oral trust of personal property can be valid without witnesses.

Question 2

A Michigan spendthrift trust generally protects a beneficiary's interest from creditors, but which claimant can still reach it?

Accepted Answer

A child or former spouse holding a support order

Answer

Under MCL 700.7504, exception creditors such as children or spouses with support judgments may reach a spendthrift trust interest.

Question 3

Under the Michigan Trust Code, an irrevocable trust may be modified without court approval if:

Accepted Answer

The settlor and all beneficiaries consent, even if modification is inconsistent with a material purpose

Answer

MCL 700.7602 permits modification or termination by consent of the settlor and all trust beneficiaries regardless of material purpose.

Question 4

A Michigan trustee invests the entire trust corpus in one speculative stock. Under the Michigan Prudent Investor Rule, the trustee's conduct is judged by:

Accepted Answer

The performance and risk profile of the portfolio as a whole and the trustee's conduct at the time of decision, not hindsight

Answer

Michigan's prudent investor rule evaluates decisions in context of the whole portfolio and circumstances when made, and generally requires diversification.

Question 5

In Michigan, a trust created by the settlor's will is known as what, and when does it take effect?

Accepted Answer

A testamentary trust, effective at the settlor's death upon probate of the will

Answer

A testamentary trust arises under a probated will and takes effect at the testator's death.

(MI Bar) Michigan Bar Exam Practice Test

(MI Bar) Michigan Bar Exam Practice Test

MI Bar Wills Trusts and Estates 4