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For many professionals and business owners in Lansing, the concept of wealth preservation isn't just about ensuring their immediate financial future. It's about passing down a legacy to future generations. If you're someone with a considerable amount of wealth or potential liability – think physicians, real-estate developers, executives, or even celebrities – you might want to take steps now to protect your wealth against unforeseen third-party creditors' claims of you or your family.
As your trusted Lansing trust attorney, I'm here to help provide a guide for how a Michigan Domestic Asset Protection Trust (DAPT) can protect your generational wealth.
What is a Domestic Asset Protection Trust?
According to the American Academy of Estate Planning Attorneys, Michigan is one of 17 states that allow for DAPTs. In Michigan, DAPTs are a relatively new tool for wealth transfer. A DAPT is a self-settled, funded irrevocable trust crafted by an individual, known as the "settlor." What sets DAPTs apart is the heightened protection from third-party creditor claims. Plus, Michigan's DAPT statute allows you, the settlor, to retain specific powers and interests in the trust, including the right to receive distributions, all while safeguarding your assets.
Why Should Professionals or Business Owners Consider a DAPT?
Lansing professionals with a high risk of liability stand to gain much from a DAPT, primarily because:
Michigan's DAPT Requirements – A Primer
However, as any diligent trust attorney will tell you, while DAPTs offer powerful protection, they come with strict Michigan-specific requirements. Each state has their own separate regulations for these types of trusts.
Is a DAPT Right for You?
Although DAPTs offer numerous benefits, they aren't a one-size-fits-all solution. Their appropriateness depends on individual assets, potential exposure to future creditors, and your comfort level with any related restrictions.
If you're considering ways to preserve your generational wealth, schedule a call with Lansing Trust Attorney Nick Leydorf who will ensure that your legacy remains secure for generations to come. Read more about protecting your wealth in our article, Protecting Inheritances in a Blended Family.