By Matthew A. Quick As provided in MCL 565.431, et seq., a certificate of trust existence and authority (referred to as a "certificate of trust") or the entire trust declaration may be filed at a register of deeds office. Filing either a certificate of trust or the entire trust declaration when real property is placed into trust is beneficial and, in some cases, necessary for the orderly administration of the trust (allowing for smoother transfer of real property held by the trust). Filing a certificate of trust over the entire trust declaration is beneficial for several reasons. First, a certificate of trust is a shorter document, which does not cost as much to file with a register of deeds office. Second, a certificate of trust is a much more private option because it only contains excerpts of the actual trust document and does not include distribution provisions, among others. Third, an updated trust declaration must be filed with a register of deeds office if portions of the trust declaration are modified or revoked. If a certificate of trust is originally filed, a new certificate of trust is only required if the excerpted portions contained in the certificate of trust are changed.
The requirements of a certificate of trust are as follows, pursuant to MCL 565.432:
(a) The title of the trust. (b) The date of the trust agreement and any amendments to the trust agreement. (c) The name of the settlor or grantor and the settlor's or grantor's address. (d) The names and addresses of all of the trustees and successor trustees. (e) The legal description of the affected real property. (f) Verbatim reproductions of provisions of the trust agreement, and any amendments to the trust agreement, regarding all of the following: (i) The powers of the trustee or trustees relating to real property or any interest in real property and restrictions on the powers of the trustee or trustees relating to real property or any interest in real property. (ii) The governing law. (iii) Amendment of the trust relating to the trust provisions described in subdivision (a) to (f)(ii). (g) Certification that the trust agreement remains in full force and effect. (h) A list of names and addresses of all persons who, at the time the certificate of trust is executed, are trustees of the trust.
Pursuant to MCL 565.433:
A certificate of trust existence and authority shall be executed by the settlor or grantor; an attorney for the settlor, grantor, or trustee; or an officer of a banking institution or an attorney if then acting as a trustee. The certificate shall be in the form of an affidavit.
On the issue of third-party reliance, MCL 565.435 provides:
A purchaser or other party relying upon the information contained in a recorded certificate of trust existence and authority shall be afforded the same protection as is provided to a subsequent purchaser in good faith under section 29 of chapter 65 of the Revised Statutes of 1846, being section 565.29 of the Michigan Compiled Laws, and shall not be required to further examine the trust agreement, unless an instrument amending or revoking the trust agreement or certificate of trust existence and authority is recorded in the same office in which the trust agreement or certificate of trust existence and authority was recorded.