Sec. 12.
If the donee of a special power fails to exercise the power effectively or totally releases a releasable special power, the interests that might have been appointed under the power pass as follows:
(a) If the creating instrument contains an express gift in default, then in accordance with the terms of the gift.
(b) Except as provided in subdivision (d), if the creating instrument contains no express gift in default and does not clearly indicate that the permissible appointees are to take only if the donee exercises the power, then equally to the permissible appointees living at the time of the termination or release of the power, but if the power is to appoint among a class, such as "relatives", "issue" or "heirs", then to those persons in the closest degree of kinship or representing others in the same degree of kinship who would have taken had there been an express appointment per stirpes to the described class effective as of the termination or release of the power.
(c) Except as provided in subdivision (d), if the creating instrument contains no express gift in default and clearly indicates that the permissible appointees are to take only if the donee exercises the power, then by reversion to the donor or his or her estate. If the creating instrument expressly states that there is no reversion in the donor, then any language in the creating instrument indicating or stating that the permissible appointees are to take only if the donee exercises the power is to be disregarded and the interests shall pass under subdivision (b).
(d) If the power was created by the exercise of a discretionary power described in section 5a, then according to the provisions that governed the assets subject to the power under the first trust described in section 5a(1).
History: 1967, Act 224, Eff. Nov. 2, 1967 ;-- Am. 1970, Act 195, Imd. Eff. Aug. 6, 1970 ;-- Am. 2012, Act 485, Imd. Eff. Dec. 28, 2012
Structure Michigan Compiled Laws
Chapter 556 - Powers of Appointment
Act 224 of 1967 - Powers of Appointment Act of 1967 (556.111 - 556.133)
Section 556.111 - Powers of Appointment Act; Short Title.
Section 556.112 - Powers of Appointment Act; Definitions.
Section 556.113 - Powers of Appointment; Creation; Donors, Qualifications.
Section 556.114 - Manifestation of Intent to Exercise.
Section 556.115 - Methods by Which Powers May Be Exercised by Donees.
Section 556.115a - Second Trust.
Section 556.116 - Interests Appointable by General Powers; Part of Donee's Estate.
Section 556.117 - Naming Appointees by Donees of Powers.
Section 556.118 - Release of Powers; Method; Delivery.
Section 556.119 - Creation, Exercise and Release of Powers; Irrevocability.
Section 556.120 - Contracts of Donees of Powers to Make Appointments; Remedies.
Section 556.122 - Special Power; Passing on Donee's Default.
Section 556.123 - General Powers; Creditors' Rights in Appointable Interests.
Section 556.126 - Postponement of Vesting of Future Interests; Law Determining Period.
Section 556.128 - Reserved Power of Revocation; Effect on Creditors and Purchasers.
Section 556.129 - Law Applicability; Construction of Act.
Section 556.130 - Death of Appointee Prior to Exercise of Power.
Section 556.131 - Membership of Class; Determination; After Born Members.