In Perspectives

Do you own your own business?  Do you work in a field where you are at a high risk of being sued (ex. doctors, nurses, lawyers)?  Do you worry about protecting your assets from potential creditors?  Michigan passed a law in early December that can help, and it will take effect in March 2017.  The Qualified Dispositions in Trust Act (Public Act 330) permits the creation of an irrevocable trust where the person funding the trust can also be the beneficiary, can have some say in how trust distributions are made, and can shield the trust assets from the person’s creditors.

While you can create this trust to shield some of your assets from liability, you cannot have a huge outstanding debt (like child support in arrears), establish this trust, and then transfer all your assets to it – that would be fraud (and there is actually a two year lookback period).  If you are in the midst of the law suit, sorry but you’re out of luck on this one.  What you can do is set this trust up while everything is going along smoothly and put assets into it as a protective measure.  As mentioned above, this will be most useful to those of you that are business owners who fear piercing the corporate veil, doctors (who, congratulations, are sued most often), and others that live/work in areas where they are at high risk of being sued.

Some other facts:

–  If you establish this trust for yourself, you cannot be the trustee – it has to be someone else, or a corporate trustee (yes, Legacy Trust can serve in this role);

– As the creator and beneficiary of the trust, you still have the following power: to direct investment decisions; to veto a distribution from the trust; to appointment what happens to the assets in the trust after you die; to receive income; and to remove a trustee and appoint another.  These are just some of the powers that can be retained.

While this may all sound great, you need to consider that this is an irrevocable trust.  That means you can’t change it, at least not without petitioning the court and having a legally qualifying reason to do so . . . needless to say, you do not want to put all of your eggs in one basket.  However, this is may be a good option depending on your unique situation.

To determine if this type of trust is right for you, and how much you would want to fund your trust with, you should speak with your advisors – your attorney and your CPA at a minimum!

Legacy Trust and Your Right to Financial Privacy

At Legacy Trust we have established policies and practices that respect the financial privacy of all individuals who use our trust company. We believe it is critical to comply with the laws and regulations designed to secure your financial privacy. Your relationship with us as our client is very important to us, and we want you to understand our policies and practices about handling your information.

This Policy applies to you – This Policy applies to our relationships with individual clients who inquire about or obtain products or services from us for personal, family and household purposes.

Strict security measures – We take the security of information very seriously. We have established security standards and procedures to prevent access to client information. We maintain physical, electronic and procedural safeguards to guard client information.

Limited employee access – We have established procedures to limit employee access to information to only those employees with a business reason for accessing such information. We educate our employees about the importance of confidentiality and client privacy. We take appropriate disciplinary measures to enforce employee responsibilities regarding client information.

Why we collect information – We collect information about you to:

  • accurately identify you;
  • protect and administer your records, accounts and funds;
  • help us design or improve our products and services;
  • understand your financial needs;
  • save you time when you apply for new products and services; offer you quality products and services; and comply with certain laws and regulations;

We collect information – We collect and maintain your personal information so that we can provide investment management and other services to you. The types and categories of information that we collect and maintain about you include:

  • Information we receive from you to open an account or provide investment advice or other services to you (such as your home address, social security number, telephone, financial information and investment objectives).
  • Information that we generate to service your account or from our transactions with you (such as account statements and other financial information).
  • Information on your transactions with nonaffiliated third parties.

We have established procedures so that the financial information we collect is accurate, current and complete. We are committed to work with you to promptly correct any inaccurate information.

Our selective sharing of information – In order for us to provide investment management and other services to you, we do disclose your personal information in very limited instances, which include:

  • Disclosures to nonaffiliated companies as permitted by law, including those who help us service your account (such as providing account information to brokers and custodians).
  • Other limited disclosures as permitted by law, for example, required reports to government entities.

We do not share your information with third parties for marketing purposes. We do not sell your information.

Former clients – If you end your relationship with us, we will continue to adhere to the privacy policies and practices described in this notice.

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USA PATRIOT Act

Important Information About Procedures For Opening A New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

We apologize for any inconvenience this may cause; however, federal law prohibits us from waiving these requirements.

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