HB 5505 Summary

• Enacts the "Qualified Dispositions in Trust Act" to establish legal protections for property transferred into irrevocable trusts with qualified trustees and specific trust structures.

• Defines "qualified dispositions" as transfers to trusts meeting requirements including: property owned by at least one qualified trustee, irrevocable trust instrument governed by Michigan law, spendthrift provisions, and transferor limited to specified powers (income rights, veto powers, special powers of appointment, discretionary distributions).

• Restricts creditor rights by limiting creditor claims to fraudulent transfer actions under the Uniform Fraudulent Transfer Act, with higher burden of proof (clear and convincing evidence) and shortened statute of limitations (2 years for pre-existing claims, 1-2 years depending on discovery).

• Protects trust beneficiaries' interests from attachment, garnishment, or execution by creditors; property in qualified dispositions is not considered marital property in divorce proceedings if transferred more than 30 days before marriage or with spousal agreement.

• Grants probate court exclusive jurisdiction over qualified disposition disputes; requires qualified trustees to maintain Michigan presence and establishes procedures for trustee succession and trust administration.