Michigan does not have a dedicated Statutory Trust Act comparable to those in states like Delaware or Wyoming. In fact, Michigan law specifically excludes “business trusts” from the scope of its primary trust legislation.
Here is the breakdown of how trusts are handled in Michigan and why it differs from a “statutory trust” state:
1. The Michigan Trust Code (MTC)
The Michigan Trust Code (MCL 700.7101 et seq.), enacted in 2010, is the primary body of law for trusts in the state. However, it is designed for estate planning and personal trusts (like revocable living trusts) rather than business entities.
Crucially, MCL 700.1107(n) explicitly states that the definition of a “trust” under the code does not include:
- Business trusts providing for certificates to be issued to beneficiaries.
- Investment trusts.
- Voting trusts.
- Common trust funds.
- Liquidation trusts.
2. Lack of a Business Trust Statute
While some states have specific statutes that allow a trust to be created as a separate legal entity for business purposes (a “Statutory Trust”), Michigan lacks such an enabling statute.
- Common Law Trusts: You can still form a “common law” business trust (often called a Massachusetts Business Trust) in Michigan, but it does not enjoy the same modern statutory protections—such as clear asset partitioning or limited liability—that a statutory trust in Delaware would.
- Registration: There is no specific state-level filing or “Certificate of Trust” required at the Secretary of State level to create a business trust entity in Michigan, unlike an LLC or Corporation.
3. Alternative Structures in Michigan
Because Michigan lacks a robust statutory trust framework for business, most people use other legal vehicles that provide similar benefits:
| Feature | Michigan LLC / Corp | Delaware Statutory Trust (DST) |
|---|---|---|
| Legal Personality | Separate legal entity by statute. | Separate legal entity by statute. |
| Limited Liability | Strong statutory protection. | Strong statutory protection. |
| Michigan Status | Fully supported by Michigan law. | Must register as a “foreign” entity to do business in MI. |
4. Notable Exception: Qualified Dispositions in Trust Act
While Michigan doesn’t have a “Statutory Trust” for business, it did pass the Qualified Dispositions in Trust Act (2016). This allows for Asset Protection Trusts, where a person can set up an irrevocable trust to protect assets from creditors while remaining a beneficiary. This is a “statutory” creation, but it is for wealth protection, not for operating a business entity.
Summary: If you are looking for a Delaware-style Statutory Trust to hold a business or investment, Michigan does not have a native version. Most Michigan residents either use an LLC or form a Delaware Statutory Trust and register it as a foreign entity in Michigan.
Would you like me to help you compare the benefits of a Delaware Statutory Trust versus a Michigan LLC for your specific project?