For Your Own Good Understanding Michigan Estate Planning

Aug 16 2010Asset Protection

One important task of an estate planning attorney is to make certain that the client’s liability exposure is minimized to the extent possible.  For an unmarried individual, the options for asset protection are somewhat limited.  A revocable trust does nothing to protect the client’s trust assets from liability exposure.  Federal law protects certain retirement plans from creditors.  One method of protecting assets is for the client to place his or her assets in an irrevocable trust of some type.  Often this is not a practical or desirable solution. 

 For a married couple, there are a few more options available to protect assets.  For example, one option is to move ownership of some assets from the spouse that is involved in a more risky occupation or activity to the other spouse.  A married couple may also own assets as tenants by the entireties.  This is a special form of joint ownership between a married couple that protects those assets from the claims against only one of the spouses. 

 Having sufficient liability insurance coverage is the first line of defense.  A good estate plan, however, will take into account liability exposure beyond insurance coverage in determining the estate planning documents to use and how assets should be owned.