Governor Snyder recently signed into law the Qualified Dispositions in Trusts Act. Effective February 5, 2017, Michigan will become one of 16 states that allows assets to be protected from creditors utilizing an irrevocable trust known as a domestic asset protection trust (DAPT). Previously, a person seeking creditor protection had to utilize another jurisdiction’s DAPT such as Delaware or Nevada to establish such a trust. This would include having to transfer assets to an out of state trustee. Under the new Michigan DAPT, assets will be able to be transferred to a trustee residing in Michigan provided other requirements are met.
This is a welcome development particularly for those individuals with significant wealth and creditor risks. If you think a DAPT may be beneficial for you, consult with an attorney experienced in such matters.