Mich. Comp. Laws » Michigan Compiled Laws / Chapter 566 / R.S. of 1846
Michigan Compiled Laws

Mich. Comp. Laws § 566.131 (2026)

Transfers in trust of property void as against creditors; exceptions.

✓ current as of July 2026
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Revised Statutes of 1846


R.S. of 1846


566.131 Transfers in trust of property void as against creditors; exceptions.

Sec. 1.

    (1) Except as provided in subsections (2) to (4), a deed of gift, conveyance, transfer, or assignment, verbal or written, of property made in trust for the use of the person making the gift, conveyance, transfer, or assignment is void as against the creditors, existing or subsequent, of the person.

    (2) Subsection (1) does not apply to the lapse, release, waiver, or disclaimer of a power of appointment given to a donee by a third party. As used in this subsection, "donee" means that term as defined in section 2 of the powers of appointment act of 1967, 1967 PA 224, MCL 556.112.

    (3) Subsection (1) does not apply to the creation of a trust by an individual if all of the following apply:

    (a) The individual created the trust for the benefit of the individual's spouse.

    (b) The trust is treated as qualified terminable interest property under section 2523(f) of the internal revenue code, 26 USC 2523.

    (c) The individual retains a beneficial interest in the trust income, trust principal, or both, which beneficial interest follows the termination of the individual's spouse's prior beneficial interest in the trust.

    (4) Subsection (1) does not apply to a gift, conveyance, transfer, or assignment from a trust to a person who created the trust if all of the following apply:

    (a) The trust is an irrevocable trust for the benefit of third parties.

    (b) The trust is a grantor trust with regard to the person for income tax purposes under sections 671 to 679 of the internal revenue code, 26 USC 671 to 679.

    (c) The trustee has the discretionary authority to reimburse or advance trust property to the person for taxes concerning income attributable to the trust property.

    (d) The gift, conveyance, transfer, or assignment is the exercise by the trustee of the discretionary authority described in subdivision (c).

History: R.S. 1846, Ch. 81 ;-- CL 1857, 3182 ;-- CL 1871, 4697 ;-- How. 6184 ;-- CL 1897, 9514 ;-- CL 1915, 11980 ;-- CL 1929, 13416 ;-- CL 1948, 566.131 ;-- Am. 2009, Act 42, Eff. Apr. 1, 2010

Notes of Decisions
Cited in 4 cases (1 in the last 5 years), 1991–2024 · leading case: In Re Idalski, 123 B.R. 222 (Bankr. E.D. Mich. 1991).
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In Re Idalski, 123 B.R. 222 (Bankr. E.D. Mich. 1991). · cites it 4× “” Mich.Comp.Laws § 566.131. 4 If Michigan’s ERISA exemption statute were partially or totally inapplicable, the Debtors might still prevail if they could establish that the plan’s anti-alienation provision is enforceable under Michigan common law.”
Mark P Spreitzer v. Richard R Hutchison (Mich. Ct. App. 2018). “Presumably in light of defendant’s documentary evidence that disproved plaintiff’s allegation that defendant embezzled funds from plaintiff and used the funds to purchase his condominium, plaintiff simply asserts on appeal that “[r]egardless of the source of funds used to…”
Mark P Spreitzer v. Richard R Hutchison (Mich. Ct. App. 2018). “Presumably in light of defendant’s documentary evidence that disproved plaintiff’s allegation that defendant embezzled funds from plaintiff and used the funds to purchase his condominium, plaintiff simply asserts on appeal that “[r]egardless of the source of funds used to…”
Wood Kull Herschfus Obee & Kull Pc v. Knightsbridge Charities Inc (Mich. Ct. App. 2024). “132 as a whole, as that statute is § 2 of the relevant act, MCL 566.131 et seq. Defendant quoted MCL 566.”
— Mich. Comp. Laws § 566.131(1) — 2 cases
Mark P Spreitzer v. Richard R Hutchison (Mich. Ct. App. 2018). “Presumably in light of defendant’s documentary evidence that disproved plaintiff’s allegation that defendant embezzled funds from plaintiff and used the funds to purchase his condominium, plaintiff simply asserts on appeal that “[r]egardless of the source of funds used to…”
Mark P Spreitzer v. Richard R Hutchison (Mich. Ct. App. 2018). “Presumably in light of defendant’s documentary evidence that disproved plaintiff’s allegation that defendant embezzled funds from plaintiff and used the funds to purchase his condominium, plaintiff simply asserts on appeal that “[r]egardless of the source of funds used to…”
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