In late 2016, Michigan lawmakers passed a good deal of new legislation. One of the laws, the Qualified Dispositions in Trusts Act, enables an individual (the “settlor”) to create a trust that, in certain circumstances, can protect the settlor’s assets from the settlor’s creditors. These trusts, often referred to as Domestic Asset Protection Trusts (“DAPTs”), must be irrevocable when created; however, the Settlor may be a beneficiary of the Trust. Any assets that the settlor transfers to the trust, should be protected from the settlor’s creditors beginning two years after the date on which the settlor transfers the assets to the trust. In addition, the assets should be transferred to the trust before a claim against the settlor arises. Michigan DAPTs must have a Michigan based Trustee, who is not the settlor. Sixteen other states have similar asset protection trust statutes, including Nevada and Tennessee. The new law becomes effective February 5, 2017. Any individual who is concerned about future creditor issues should consider a DAPT.
In late December, Michigan lawmakers also abolished dower, a law that gave all married women an interest in her husband’s real property, without regard to when the real estate was acquired. The law becomes effective April 6, 2017. Once the law becomes effective, it will no longer be necessary for a woman to sign a deed when her husband transfers his real estate unless she is also on the title.
Please feel free to contact Judy Fertel Layne at the Troy Office at 248-433-7563.