What Your Estate Planning Lawyer Doesn’t Want You to Know about Irrevocable Asset Protection Trusts

In our estate planning and elder law office we do quite a bit of asset protection planning utilizing a variety of different types of trusts, including Castle Trusts, VAPT’s, MIT’s, FIT’s, CGT’s, IRA Trusts as well as your typical revocable living trusts.  Clients are often surprised to learn that the more than one type of trust, let alone the benefits that some of the asset protection trusts offer.  It’s not surprising that our clients are surprised, that is why we have LifeCare Planning Workshops weekly to educate our clients (click here to register).

What is a little more surprising is that we often have to educate other financial planners and CPA’s on the different types of trusts, how they work, and their benefits.  Occasionally, we get push back from the other professionals, but after walking them through the trusts, analysis and case law they always come back and say “Chris, why haven’t I been sending people your way before??” because they are blown away at the possibilities to help protect their clients from unnecessary taxes, law suits, and long-term care costs.  I have no problem with this.  In fact, I appreciate it, because it shows a willingness to learn and take the extra step to help their clients.

Estate Planning Attorneys are often Unaware of The Best Asset Protection Trusts

Other attorneys not knowing the best, most cutting edge, most beneficial trusts to provide their clients…that’s what’s surprising.  I find that a majority of estate planning lawyers are really doing their clients a disservice by not continuing to educate themselves on the best legal tools to meet their clients needs.

For example, I’d say 95% of the estate plans I review are basic revocable living trusts that say outright distributions at age 25, 30, or 35.  What an opportunity of protecting your children you’re missing with this type of trust.  You are throwing a pillow case of money at your children that (even if they have a good head on their shoulders) could be lost to bankruptcy, divorce, creditor action, or death.  Do you want your hard earned legacy lost because your daughter got divorced?  Instead, what if you could leave it to them in a way that they can control it, serve as trustee, and empty the trust at anytime? It’s possible, legal, and court tested.  Why more attorneys are taking advantage of the lifetime asset protection opportunity to protect their client’s children from creditors and divorce is beyond me.

Lifetime Asset Protection For You

Another form of trust, sometimes called a Lifetime Asset Protection Trust or Castle Trust (modern asset protection trust) can build in asset protection for you, during your lifetime, from lawsuits and nursing home costs.  Why don’t I see more of these types of trusts around?  I think it’s laziness on the part of other estate planning lawyers to search for the best solutions for their clients.

On occasion, I’ve had clients get a second opinion from another lawyer, and invariably the other lawyer isn’t familiar with the planning strategy we’re recommending and says “that won’t work!”  Their response isn’t from a position of knowledge, however, it’s from a position of confusion and lack of knowledge.

Which Lawyer is Right?

It’s surprising to me when other estate planning or elder law lawyer’s are not familiar with some of planning options we recommend.  Then I have to prove to my client the validity of our planning or of our expertise in the area.  Just like doctors have different levels of knowledge on areas of medicine, so do lawyers have different levels of knowledge in areas of law.

For example:

  • I am one of a handful of Certified Elder Law Attorneys (the gold standard in estate planning and elder law) in the state of Michigan and the only one in Livingston County.
  • I am an adjunct professor of law at WMU Cooley Law School where I teach second and third year law students estate planning, elder law, and the very techniques I use in my practice.
  • I teach other attorneys estate planning and elder law across the nation through NBI as well as my own consulting practice.
  • My trusts have been tested in court, with the top CPA firms in Michigan, with the VA Administration and with DHHS who administers Medicaid in Michigan.
  • I wrote the Caregiver’s Legal Guide to Planning for a Loved One with Chronic Illness

I share that not to impress, but to impress upon you that estate planning, elder law, long-term care, and retirement planning is what we do…and we do it very well.  These are things we share when the general family lawyer questions some of our planning techniques.  Who do you trust, the attorney who does a little bit of everything, the general estate planning lawyer, or a Certified Elder Law Attorney/Author/Professor?

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