As Michigan changed the law pertaining to Certificates of Trust, several new requirements were born, making many Certificates of Trust created prior to 2018 invalid. Here are the three most common requirements we see missing from Certificates of Trust:
- The statement – “This trust has not been revoked, modified, or amended in any manner than would cause the representations included in the certificate of trust to be incorrect.” MCL 700.7913(3) This must be in the Certificate of Trust affidavit verbatim and is the most common requirement that we see missing.
- Authority of the Co-Trustees. If there is more than one acting Trustee, the Certificate of Trust must explicitly state the authority of the co-trustees to sign on behalf of the trust AND whether all or less than all of the co-trustees are required to exercise powers of the trustee. MCL 700-7913(1)(e)
- The revocability of the Trust. The common error we see is when the Certificate of Trust states that the trust is revocable, but then does not indicate the identity of the person holding the power to revoke. Naming the identity, typically this is the Settlor/Grantor, is a requirement of a Certificate of Trust. MCL 700.7913(1)(d)
In addition to missing statutory requirements, other common errors involve recording requirements for a Certificate of Trust. Now these common errors are not just synonymous with Certificates of Trust, but many other legal documents like power of attorneys, estate documents, affidavits, discharges, etc.
- “Prepared By” section. On every document to be recorded with the Register of Deeds needs to state who prepared/drafted the document AND their address. MCLA 565.201 Sec 1; (1)(i) Typically, you will see this section at the very end of the document. We typically will see this missing from older documents. For example, a power of attorney that wasn’t specifically prepared for the closing but gives the person’s attorney-in-fact the ability to sign real estate documents on their behalf. It may not have been your initial intention when you created the power of attorney for it to be recorded, but nonetheless will need to meet all requirements if it is to be recorded.
- A margin of unprinted space that is at least 2.5 inches at the top of the first page. MCLA 565.201 Sec 1; (1)(f)
- Original Signatures. One of the most common issue we see with Certificates of Trusts, and other estate documents, is that the Trustee does not have a Certificate of Trust that contains an original signature. The Register of Deeds cannot accept any document for recording that does not have an original signature. MCLA 565.201 Sec 1; (1)(a). The remedy for this situation would be to have a new Certificate of Trust prepared.
Although these common errors may seem substantial, they can be easy to fix with the right guidance. A good way to avoid these and to make certain that the Certificate of Trust will meet statutory requirements is to contact an attorney. Remember that an original signature is a must, so if you know you do not have an original, it is best to contact an attorney as early in the closing process as possible.