Leydorf Law Firm, PLLC

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East Lansing Michigan Estate Planning for Asset Protection 

How does estate planning work with asset protection?

Asset Protection

Asset protection is one of the key reasons for estate planning in Michigan. Protecting a lifetime of savings, passing wealth on to the next generation and minimizing estate tax consequences can all be accomplished with a comprehensive estate plan.

There are a variety of asset protection strategies available, and the best approach depends on your specific circumstances. If you're concerned about protecting your assets, it's important to work with an experienced estate planning attorney, like Nick Leydorf, who can help you choose the right asset protection strategies for your situation.

Why is asset protection necessary? 

We live in litigious times. People with significant assets are often subject to lawsuits where others feel they have a right to assert a claim. Certain professions lend themselves to litigation and no matter how much malpractice, liability, or errors and omission insurance a person might have, there is always the risk of someone bringing a lawsuit. Asset protection in estate planning is focused on a few different goals:

  • Safeguarding a legacy to be passed to the next generation
  • Protecting assets from creditors or litigation.
  • Shielding assets from family members, ex-spouses or former business associates who pose potential threats to wealth
  • Helping an individual or couple become eligible for Medicaid without losing a lifetime of savings
  • Ensuring funds will be available for a Special Needs member of the family

What are the asset protection tools used in an estate plan?

Trusts

Estate planning relies on a variety of types of trusts to protect assets. Trusts can be used for the benefit of minor children, grown children, grandchildren, or anyone the grantor wishes. Trusts are also used to share wealth with charitable organizations and minimize tax liabilities. When assets are placed in an irrevocable trust, they are no longer owned by the grantor; they are legal entities with a separate tax identification number. Only put assets in trust if they will not be needed now or in the future.

Asset Protection Trusts

The Asset Protection Trust (APT) is created solely for the purpose of protecting the grantor’s assets. They can be funded with real property, LLCs, securities, cash, or business shares. They are often referred to as “self-settled” trusts because they are created by the individual for their own benefits. However, these are complex trusts requiring the knowledge and experience of an estate planning attorney to create the trusts properly.

Michigan allows asset protection trusts, but not every state does. Some APTs are subject to liens and judgments, so speak with estate planning attorney Nick Leydorf before embarking on the creation of an APT.

Business Entities: Limited Liability Companies, Family Limited Partnerships

Another tool for asset protection in estate planning is the use of various business entities.

Property can also be protected through the use of a Limited Liability Company (LLC) or Family Limited Partnership (FLP).

Like trusts, LLCs and FLPs are legal entities and separate from the person who creates them. An individual or couple owns only a portion of the partnership but may retain control of the entire partnership and its assets if it is correctly established.

In Michigan, where so many families enjoy summers at lake houses, the Family Limited Partnership is a sensible way to share the home ownership while ensuring the property may be passed down from one generation to the next.

Regardless of the legal entity used, it is important to have asset protection structured long before any problems occur. A court may perceive the creation of a trust or a partnership occurring shortly after litigation begins as having been created solely to thwart creditors and could potentially rule the trust or partnership invalid.

Asset Protection Planning

Asset protection, like estate planning, is not a one-and-done thing. It should be updated to reflect any changes in your life, good or bad. Certain trigger events, including death, birth, marriage, or divorce are times when estate and asset protection plans need to be reviewed.

Asset protection can also be structured to take advantage of tax benefits. Assets in a trust are taxed differently than personal income, for instance, and are not included in the valuation of your estate after you have passed. How your asset protection plan is designed should align with both tax and estate planning.

When you are ready to have a conversation about asset protection and how it may fit into your estate planning, contact the Law Office of Nick Leydorf. We will work with you to understand your goals and help you create a plan that meets your needs now and in the future.

Asset protection attorney Nick Leydorf helps families in Lansing Michigan and the surrounding area. He is a native of Michigan and understands the unique challenges that come with protecting assets in Michigan. He can help you structure your asset protection plan to take advantage of state laws and maximize its benefits.

Call our law firm at (517) 388-6800, or Book a Call today!

Client Success Stories

Leah Atkinson
Leah Atkinson
March 7, 2022.
Nick has been helping me with my mother's estate since she passed over 2 years ago. He has been a godsend! Always easily flexible and responds very quickly if something urgent came up. He was very helpful with understanding the processes of everything we were doing. Then after almost 2 & 1/2 years, his final invoice was wayyy cheaper than I expected (not really knowing the going rate for estate work). This was a very trying time in my family's life and Nick made it so much easier! Thank you Nick!
Tanya Pattison
Tanya Pattison
August 2, 2020.
Roger deuce
Roger deuce
July 30, 2020.
Provides top notch services at affordable prices. Highly recommended
LouisDMichael
LouisDMichael
July 30, 2020.
If you’re in need for an attorney in the greater Lansing area, you can do no better than Nicholas Leydorf. Do yourself the justice of having him as your counselor.
Shandra Bremer
Shandra Bremer
July 30, 2020.
Needing a lawyer is never fun, but Mr. Leydorf made the experience quick and painless. He got the job done, and we felt like we were in good hands the entire time.
Anjuli Baraily
Anjuli Baraily
July 28, 2020.
Roy Salas
Roy Salas
July 24, 2020.
Mr leydorf represented me like he was the one on the stand. Best court experience ever!!!
Erica Johnson
Erica Johnson
July 17, 2020.
Nick is an excellent attorney! From the first time I met him he was very informative, responded to all my questions and was caring and understanding. I got the best possible outcome and I will definitely refer Nick to anyone that needs a great attorney! He goes above and beyond for his client!
Gravity Smokehouse
Gravity Smokehouse
June 24, 2020.
Nick followed through with everything and was very responsive with any questions or concerns that came up. Nick is very personable and easy to talk with as well.
Megan Bryers
Megan Bryers
March 6, 2020.

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