Wednesday, February 15, 2017

Domestic Asset Protection Trusts

Michigan Trust Law has remained fairly static in recent years with little change since the adoption of the Estates and Protected Individuals Code and the Michigan Trust Code. That changed recently with the passing of bills which allow the creation of Michigan based, self-settled, asset protection trusts. 

     February 2017 brings us an exciting change in Michigan Trust Law. As of Sunday, February 5, 2017, Michigan becomes the 16th state to permit Domestic Asset Protection Trusts (DAPT). A DAPT allows an individual (the “Grantor”) to create and fund an irrevocable trust which, subject to certain legal requirements, allows the Grantor to shield assets from the claims of a creditor.
     There are number of rules that a Grantor must follow in order to establish a valid DAPT, including the prohibition on the trust Grantor acting as the Trustee. However if properly drafted and funded, a DAPT will provide significant creditor protection while still allowing the Grantor to retain substantial rights with respect to the Trust property, including the ability:
  • to receive all of the income produced by the trust’s assets as well as to receive discretionary distributions of the Trust’s principal; 
  • to direct the investment of Trust assets 
  • to remove and replace trustees; and 
  • direct the distribution of assets following the Grant’s death.
While the Grantor cannot act as the Trustee of their own Trust, they do have broad discretion over who to appoint and can even appoint family members to serve in that role. 
     While a DAPT is incredibly powerful tool for creditor protection, it does have limitations. Most prominently, there is a two-year period from the date assets are transferred to the trust before creditor protection is achieved. Additionally, in situations related to bankruptcy or fraudulent concealment, protection takes longer to be applicable or may be completely unavailable. Due to these limitations, it is important to create and fund a DAPT well in advance of any claim arising. 
     DAPTs have the potential to become a very important part of estate planning, especially for those individuals such as doctors and business owners who face higher than average creditor exposure. However in order for them to provide the intended protection it is vital to ensure the DAPT comports with the governing statute. As always, before attempting to include a DAPT in your planning, or the planning of your clients, it is important to consult an experienced estate planning attorney.

Alan and Matt

19 comments:

  1. I really appreciate your valuable write-up for the people to make them about importance of domestic asset protection to keep wealth savings for family needs in future.

    ReplyDelete
  2. I assume that is an informative proclaim and it is selected beneficial and informed. therefore, i might as soon as to thank you for the efforts you have got made in writing this newsletter.Elia & Ponto

    ReplyDelete
  3. Great Article it its really informative and innovative keep here: with new updates. Its was really valuable. Thanks a lot. www.gpwlaw-mi.com/florida-mesothelioma-lawyer/

    ReplyDelete
  4. I feel very grateful that I read this. pleasant bLog! its fascinating. much obliged to you for sharing.

    professional trainings

    ReplyDelete
  5. If your looking for Online Illinois license plate sticker renewals then you have need to come to the right place.We offer the fastest Illinois license plate sticker renewals in the state.
    data analytics certification training course

    ReplyDelete
  6. I just wanted to thank you very much once again. Thank you for all your work on this website. You can easily apply to the Turkey evisa express application system takes just 5 minutes to apply and within 30 minutes e Visa Turkey Travel sends to your email.

    ReplyDelete
  7. Great info.. Thank you If you are transiting through Kenya to your destination, then you can apply online for Kenya transit visa through online Kenya e vias application

    ReplyDelete
  8. We are aware of AOL mail login process, so if you are dealing with problems while logging into AOL mail login sign page, then you need to check the login details you are entering or contact us today. AOL com login

    ReplyDelete
  9. Great article this is really informative and innovative: with new updates.with new updates. It was really valuable. Thanks a lot. Indian Business Visa is an electronic business travel authorization. Foreigners who want to come to India for business purposes like: business, attending technical meetings, setting up industrial/business etc. You can apply through the India business visa site.

    ReplyDelete
  10. Thanks for sharing this information, Keep it up.... Types of South African Visas you can check online via South Africa website, The Government of South Africa has confirmed that South Africa's new e-Visa system will be implemented for 15 countries by March 2022.

    ReplyDelete
  11. I can't believe I've never been to this site before, but after going through some of the posts I realized it's new to me. Anyhow, I'm glad I found it and I'll be bookmarking and checking back often. The Government of India simplified the India visa application process, you can apply online for all visas. And you can travel to India. You can upload supporting documents, passport, photograph & pay for your Indian visa application online. Applying India e Visa online is fast and easy.

    ReplyDelete
  12. After checking through a few posts, I realized this was a new site for me. I'm definitely glad I found it and I will be bookmarking and checking back often. The Government of India simplified the India visa application process, you can apply online for all visas, and travel to India. You can upload supporting documents, passport, photograph, & pay for your Indian visa online. Obtaining an India e Visa online is fast and easy.

    ReplyDelete
  13. Good morning everybody.. Your article is more useful for all the people. Thank you sir.. Many people query What is Indian visa service fee? Visa fee depends on your nationality and your visa duration. You can read all other information about the Indian e-visa on our India eVisa page. We have explained all requirement on our page....

    ReplyDelete

  14. Hey everyone, Foreign citizens can enter India for business purposes. The Indian government allows foreign country citizens to apply for a business e visa India. You can read more info about Indian business visa or an electronic business visa through our India visa website.

    ReplyDelete
  15. Thank you for the great post. Citizens of the United States of America need a visa to travel to India. Yes, India visa for US citizens, US citizens can apply online for an Indian visa. Indian visa for US citizen is issued for under the following 5 categories:- You can choose your category then apply for your visa.

    ReplyDelete
  16. I read your website material. It's so amazing and really enhances knowledge.I just inform you, We provide ecommerce web development company services. We aim at making e-commerce solutions technically impeccable and catchy to let your company stand out in the eCommerce market. If you have any query related to eCommerce development solutions then visit our website you will get complete information related to your query.

    ReplyDelete
  17. I read your blog and found many interesting metrics in this material. Thanks for sharing it on the Internet. Person who is willing to visit Turkey can apply for a Turkish e visa which is a totally online process. Fill the application form, make payment & receive it in email. As simple as that.

    ReplyDelete
  18. Wow you have nice content on your page. Your audience will enjoy it while they are read. Turkey visitors can apply e visa of Turkey online from anywhere in the world. The process is easy and convenient which saves your time & money.

    ReplyDelete

We welcome and appreciate your comments but remind you that while not all viewpoints are equally respectable, all people should be treated with respect. The authors do not actively moderate comments but reserve the right to remove comments that are offensive, derogatory, or contain spam.