SB 597 - Qualified Dispositions in Trust Act

• Establishes the "Qualified Dispositions in Trust Act" to govern transfers of property to trusts with qualified trustees in Michigan, providing asset protection from creditors under specified conditions.

• Defines "qualified dispositions" as irrevocable transfers to trusts with qualified trustees where the transferor retains only limited powers including directing investments, vetoing distributions, receiving income, and removing/appointing trustees.

• Grants exclusive jurisdiction to probate courts to determine whether a transfer qualifies as a qualified disposition and limits creditor remedies to claims under fraudulent transfer laws with a clear and convincing evidence standard.

• Requires transferors to sign a "qualified affidavit" before making a qualified disposition, attesting that the transfer will not render them insolvent and is not intended to defraud creditors, though defective affidavits do not invalidate the disposition.

• Prohibits trust beneficiaries from transferring or pledging their interests in qualified disposition trusts and prevents creditors from attaching, garnishing, or levying against beneficiary interests in such trusts.

• Takes effect 90 days after enactment (March 8, 2017) and only applies if House Bill 5504 is also enacted into law.