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Trusts and Estates

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Trusts and Estates

The Supervision of Trustees for Charitable Purposes Act, MCL 14.251 et seq., mandates that every charitable trust register with the Attorney General. The term "charitable trust" is broadly defined as every person or legal entity that holds property for a charitable purpose.

Most organizations that hold charitable assets in Michigan must be registered with the Charitable Trust Section. Over 13,000 organizations, private foundations and trusts are registered with the Attorney General's office, accounting for billions of dollars of charitable assets.

Forms

Charitable Trusts & Requirements

  • Registration

    There are two ways to register. First, the Charitable Trust Section automatically registers those charitable organizations that are registered to solicit under the Solicitations Act. 

    Second, all other entities should submit either the CTS - 05 Registration and Inventory Form for Corporations and Unincorporated Associations (PDF) or the CTS - 06 Registration and Inventory Form for Trusts (PDF). 

    To maintain a charitable trust registration, organizations must file financial accountings with the Charitable Trust Section within six (6) months of the end of each fiscal year. To file, send a copy of the IRS accounting, the organization's certified audit, or, if a corporate trustee, an annual financial statement.

    For organizations that do not have an accounting already, they may download an IRS 990-EZ from the IRS website. Or, visit "How To Submit Forms" to prepare and e-file a form 990 or 990-EZ to the IRS and Charitable Trust Section.

  • Exemptions

    There are exemptions for religious organizations, governmental agencies, educational institutions, amateur theater, band and orchestra organizations, and hospitals. 

    For exemption details, see MCL 14.253.

    To confirm your organization's exemption, submit the CTS - 03 Request for Exemption Form (PDF). 

  • Request for Waiver

    If a corporation has contributions of less than $8,000 and gross receipts less than $25,000 during their fiscal year and holds assets valued at all times during their fiscal year less than $100,000, it may qualify for a waiver of the financial accounting requirement. 

    If any questions arise, however, the Attorney General reserves the right to request financial accountings for any years for which the requirement has been waived.

    The Rules and Regulations for Charitable Trusts, R14.11 et seq. of the Michigan Administrative Code provide additional detail regarding charitable trust registration requirements.

  • Terminating A Charitable Trust

    A registered charitable trust that is making a final distribution resulting in the termination of the trust should file a final accounting and acknowledgments of receipt from all receiving charities.

    If a charitable trust that is terminating has not registered, it should also file Form CTS - 06 Registration and Inventory Form for Trusts (PDF), with the final accounting and receipts.

Charitable Remainder Trusts

Registration Requirements

In general, charitable remainder trusts that lack a current charitable interest need not register or report under the Supervision Act (MCL 14.253(c)). There is an exception for certain trusts.

Irrevocable trusts that lack a current charitable interest remain subject to the Act's registration and reporting requirements if either is true:

  • The selection of a charitable remainder beneficiary is still under the control of the grantor, testator, executor, trustee, or members of the grantor's or testator's family (that is, where the grantor retains the power to alter the charitable beneficiaries of the trust); or
  • A charitable remainder beneficiary itself is under the control of the grantor, testator, executor, trustee, or members of the grantor's or testator's family (such as when the charitable remainder beneficiary is a family foundation [MCL 14.253(c)].
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Estates With Charitable Remainders

Estates Must Notify the Attorney General

Upon petitioning for probate of a will that includes a residual charitable bequest or creates a charitable trust, an estate must notify the Attorney General. See Section 4(c) of the Supervision Act. The notice should include a copy of the initial petition and a copy of the last will and testament, including any codicil or trust agreement and should be sent to:

Michigan Department of Attorney General
Corporate Oversight Division - Estates
P.O. Box 30755
Lansing, MI 48909

Regardless of whether a will is admitted formally by petition or informally by application, upon appointment of the personal representative or probate of the will, the Attorney General is an interested person for all wills that include a residual charitable bequest or that create a charitable trust. As an interested person, the Attorney General should be given all required notices.

If a trust with a charitable interest is to continue after probate proceedings are completed, the trust will most likely need to register as a charitable trust. See the above section "Registering a Charitable Trust." Also, if a living trust has been established naming a charity as a remainder interest, the trust must notify the Attorney General upon distribution of the charitable assets.

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