Hiring help: delegation, agents and trust directors in Michigan

Delegating investment and management

MCL 700.1510 provides that a fiduciary may delegate investment and management functions, exercising reasonable care, skill and caution in selecting the agent, setting the scope and terms of the delegation, and periodically reviewing the agent's actions. A fiduciary who does so is not liable for the agent's decisions, and the agent owes the fiduciary estate a duty of reasonable care.

Employing professionals

Among a trustee's specific powers are employing and paying reasonable compensation to auditors, investment advisors, accountants, appraisers, brokers and others, and employing an attorney to perform necessary legal services or to advise or assist the trustee (MCL 700.7817(v), (w)). Expenses properly incurred are reimbursed from the trust (MCL 700.7709).

Trust directors

Where a trust's terms give a trust director a power of direction, MCL 700.7703a provides that the directed trustee takes action to comply and is not liable for doing so, except where the direction was obtained through the trustee's collusion or fraud. The section sets the director's duties and the information the director and trustee share; the trust's terms say what each holds.

The statutes, verbatim

• Delegation of investment and management functions

  MCL 700.1510 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Rules of construction; nonfiduciary powers under a trust; power of direction to trust director; duties and limitations of trust director and trustee; liability; applicability of rules to trusteeship; definitions

  MCL 700.7703a ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Reimbursement of expenses; advance of money as lien; advances and reimbursement not as self-dealing or breach of fiduciary duty

  MCL 700.7709 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Specific powers of trustee

  MCL 700.7817 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

Common questions

Frequently asked questions

Can a Michigan trustee hire an investment advisor?

Yes. A fiduciary may delegate investment and management functions with reasonable care in selecting, instructing and reviewing the agent (MCL 700.1510), and may employ advisors (MCL 700.7817(v)).

Is a Michigan trustee liable for following a trust director?

A directed trustee that takes action to comply with a trust director's power of direction is not liable for doing so, except where the direction was obtained by the trustee's collusion or fraud (MCL 700.7703a).

Can a Michigan trustee pay a lawyer from the trust?

Employing an attorney to perform necessary legal services or to advise the trustee is among a trustee's powers (MCL 700.7817(w)), and expenses properly incurred are reimbursed (MCL 700.7709).

General information about Michigan law, not legal advice.