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Michigan's new take on divorce assets

No matter how spouses approach divorce, the legal process that ensues could become complex. Common issues that Michigan residents encounter when going through with divorce are those concerning financial affairs. Although Michigan is a state that handles economic aspects of divorce carefully, cases do not always result in balance between those involved.

The Times Herald covered recent changes in Michigan's divorce laws, noting that, as of March 2017, the Michigan Qualified Dispositions in Trusts Act allows individuals to set up irrevocable trusts. If spouses follow standard legal guidelines under this law, these trusts can protect assets from creditors. In cases involving individuals with a large number of assets and with looming creditor concerns, this protection trust may be an ideal route. The Herald refers to those in occupations such as medicine, law or financial advisors as prime candidates for this type of plan. 

Forbes points out that Michigan is one of many states to allow domestic asset protection trusts. Originally having been set into motion in 1997, this trust plan is now seen as both a blessing and a curse. Many of those going through divorce see the trust as not only a way to dodge creditors, but a path to security for future generations. Furthermore, transferring assets into a trust can help individuals save on estate taxes. Yet the details of this new law, as with many, vary from state to state. For example, after only two years, Michigan allows creditors to seek out DAPT assets, as well as requires an affidavit of solvency, which could potentially create accessibility issues for state residents in the future.    

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Lorrie J. Zahodnic

"I will hold you up until you can stand on your own two feet."

Lorrie J. Zahodnic, P.C. has provided skilled and compassionate legal guidance to Michiganders in family law matters for over 20 years.

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