Transfer of Real Property from Trust to Trust

Transfer of Real Property from Trust to Trust

In Mancuso Family Trust v. City of Charlevoix, the Michigan Court of Appeals held that a transfer of property from one trust to another trust constitutes an uncapping event, even if both trusts have the same trustees. The exception for commonly controlled entities in MCL 211.27a(7)(l) does not apply to a change in ownership, which occurs when one trust transfers property to another trust.

MCL 211.27a(6) states that a “transfer of ownership” is “the conveyance of title to or a present interest in property, including the beneficial use of the property, the value of which is substantially equal to the value of the fee interest.” 

The uncapping of property taxes can cost many thousands of dollars, so make sure to consult an attorney when transferring property. Despite the holding in this case, there are many transfers that are exempt from the uncapping of property taxes.

You can find the full opinion HERE.

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