Annual Trust Accounting Requirements in Michigan

At a glance

Requirements one by one

Michigan uses annual, termination, and vacancy reports

MCL § 700.7814(1)–(6) governs beneficiary information and reports; subsection (3) sends the ordinary report automatically to distributees and permissible distributees of trust income or principal. Other qualified or nonqualified trust beneficiaries receive it after requesting it, and the trustee may provide it to any trust beneficiary in the trustee's discretion.

The recurring events are at least annual reporting and trust termination. A vacancy adds a separate report: unless a cotrustee remains in office, the former trustee sends qualified trust beneficiaries a report for the former trusteeship. A personal representative, conservator, or guardian may report for a deceased or incapacitated trustee.

The statutory contents are a defined minimum

The report covers trust property, liabilities, receipts, and disbursements. It also states the source and amount of trustee compensation, lists trust property, gives respective market values when feasible, and includes any applicable disclosure required by § 700.7802(5).

Section 700.7814(3) does not generally require carrying values, realized-gain schedules, principal-and-income classifications, distributions by beneficiary, agent compensation, a final distribution plan, trustee oath, or notarization. Trust administration may make some of that information useful, but it is not part of this section's universal report list.

Delivery and court accounting are separate routes

MCL § 700.7109(1) requires a reasonably suitable method likely to result in receipt. It lists first-class mail, personal delivery, delivery to the last known home or business, and a properly directed and identified fax or electronic message. Unknown or unreasonably unascertainable recipients need not receive an otherwise required document.

The ordinary report proceeds without routine court approval. MCL § 700.7201(1)–(3) says a trust is not continuously supervised unless the court orders it and expressly allows administration and beneficiary reporting without court intervention. Once jurisdiction is invoked, however, a proceeding may require, hear, and settle interim or final accounts.

Trust terms, waiver, and revocable trusts change the analysis

Under MCL § 700.7105(1)–(2), trust terms generally prevail. The mandatory floor protects the core § 700.7814(2)(a)–(c) information and notice duties and the court's power under subsection (4), but not the ordinary subsection (3) annual-report rule. Section 700.7814(4) therefore contemplates terms directing accounts and information to fewer than all qualified beneficiaries while preserving the court's power to order statements for excluded persons.

A trust beneficiary may waive a report or other information and later withdraw that waiver for future items. While a trust is revocable, MCL § 700.7603(1)–(2) generally makes beneficiary rights subject to settlor control and trustee duties exclusive to the settlor, with an information rule when the trustee reasonably believes the settlor is incapacitated.

During a statutory nondisclosure period, current MCL § 700.7110(3) gives a nondisclosure correlative-right or protection-power holder qualified-beneficiary rights. Pending H.B. 4523 would make that status subject to contrary trust terms, which could change the vacancy-report recipient class in a nondisclosure trust.

MCL § 700.8206(1)–(2) generally applies the Michigan Trust Code additions to trusts created before, on, or after April 1, 2010, while preserving accrued rights, prior acts, and specified older proceedings.

A one-year cutoff needs more than an annual report

Under MCL § 700.7905(1)–(3), the one-year period begins only when the beneficiary or representative is sent a report that adequately discloses a potential breach claim and informs the beneficiary of the time allowed to sue. Adequacy is claim-specific: the information must let the recipient know of the claim or indicate that the recipient should inquire into it.

A beneficiary who waived reports has a different one-year period, measured from the end of the calendar year in which the alleged breach occurred. If neither route applies, the five-year period begins at the first of trustee removal, resignation, or death; termination of the beneficiary's interest; or trust termination.

Interested persons may separately approve a report or accounting and related trustee liability through a nonjudicial settlement agreement under MCL § 700.7111(1)–(5), subject to the material-purpose and court-approvable-terms limits. The report alone does not create that settlement.

What trips people up

• Automatic recipients are narrower than all qualified beneficiaries. Current distributees and permissible distributees receive the annual/termination report; other qualified or nonqualified beneficiaries must request it.
• The vacancy report uses a different class. It goes to qualified trust beneficiaries when no cotrustee remains.
• One year is conditional. The report must adequately disclose the particular potential claim and state the limitations period; a document cannot guarantee adequacy merely by labeling itself an annual accounting.
• A waiver accelerates its own cutoff. The one-year period for a beneficiary who waived reports runs from the end of the calendar year of the alleged breach.

Common questions

Must every asset have a market value?

No. Section 700.7814(3) requires respective market values only when feasible. The property still must be listed with the rest of the required report information.

Does a termination report need a distribution plan?

Section 700.7814(3) does not list one. The trust terms, a settlement, or a court proceeding may require additional information in a particular administration.

Can a court require an account even if trust terms restrict reports?

Yes. Sections 700.7105(2)(k), 700.7201(3)(c), and 700.7814(4) preserve court power to order statements for excluded persons and to require, hear, and settle interim or final accounts.

What remedies and costs are available for failure to report?

Under MCL § 700.7901(1)–(2), the court may compel duties or an account, enjoin or require redress for breach, appoint or suspend a fiduciary, remove the trustee, reduce or deny compensation, and grant other appropriate relief. Equitable cost and attorney-fee awards and good-faith trustee expense reimbursement remain subject to the breach-related reduction or denial rule in MCL § 700.7904(1)–(3).

Statutes and sources

• MCL §§ 700.7105, 700.7109, and 700.7603. Trust-term variation, delivery, written notice waiver, and revocable-settlor rules. Official EPIC whole-act PDF (accessed August 9, 2026; complete through PA 20 of 2026).
• MCL §§ 700.7111 and 700.7201. Nonjudicial approval of reports/accountings and liability; no routine supervision; judicial interim/final accounts. Official EPIC whole-act PDF (accessed August 9, 2026).
• MCL § 700.7814. Recipients, annual, termination, vacancy, contents, court- ordered information, waiver, and effective-date qualifier. Official EPIC whole- act PDF (accessed August 9, 2026).
• MCL §§ 700.7901, 700.7904, and 700.7905. Breach remedies, costs and fees, one-year report/waiver periods, adequate disclosure, and five-year residual period. Official EPIC whole-act PDF (accessed August 9, 2026).
• MCL § 700.8206. Application to older trusts and proceedings, accrued rights, and prior acts. Official EPIC whole-act PDF (accessed August 9, 2026).