Overview

In this episode of the Family Legacy Podcast, Michael Rutkowski shares essential insights into the world of estate planning and asset protection, focusing on how trusts in different jurisdictions can provide enhanced benefits. With the holidays around the corner, this conversation highlights the importance of safeguarding your family's future while fostering meaningful connections.

Episode Summary

Michael Rutkowski discusses the evolving landscape of estate planning, emphasizing the advantages of setting up trusts in jurisdictions beyond your home state. The episode explains how multi-state trusts can provide added protection against lawsuits and help optimize tax planning. Michael highlights key considerations, including the flexibility and benefits of Michigan's asset protection statutes and the use of offshore trusts for advanced planning needs.

Listeners will gain practical tips for approaching family conversations about estate planning during the holiday season and learn why starting early can make a significant difference. Whether you're just beginning to explore estate planning or seeking advanced strategies, this episode provides actionable advice to help protect your legacy.

For asset protection or legal guidance assistance, please contact Rutkowski Law Firm at 248-955-2842.

Transcript

Kerry Guard 0:00
Michael, welcome to the family legacy Podcast, the podcast that goes beyond legal jargon and gets to the root of how to ensure your past, present and future are protected. This episode is brought to you by the ratowski Law Firm, Michigan's leading asset protection estate planning, Medicaid and Elder Law Firm. And here's our host, Michael rotoski. Michael, welcome to the show.

Michael Rutkowski 0:21
Thanks for having me as always. Kerry, nice to see you always. Yes,

Kerry Guard 0:25
you too. Happy Tuesday. Well, one holiday down. Yeah, two more to go. Multiple to go, depending on what you celebrate. We're in the in between. How are you using this time between? Like, what's the build up for you all like and like, how do you

Michael Rutkowski 0:45
Yeah, yeah. That's a great question. You know? What's really nice right now is so having three daughters that are into a million things, activities are slowing down. So it's just been really good to you know, fall seasons have ended because of the holidays and everything. There's a little it's the practices are a little lighter. So it's just been good to, like, have some fattening family gatherings. Kind of just slow down for a minute. Our weekends aren't as crazy. And I think what's just been really important for my wife and I is just, like, enjoying and being in the moment, like, you know, it's, it'd be so easy right now to be like, well, let's spend the weekends knocking out these projects. But instead, we're, like, trying to be intentional about being with our kids and family. Because otherwise, you know, we could, we could just go down that rabbit hole all the time and just, there's always so much to do, and always, never enough time to do it. And so it's just been kind of nice. And I think my goal for, you know, going through the new year is to just, you know, take a step back, relax a little bit, and just spend time with family, because it's just going to ramp up right after the first of the year, and

Kerry Guard 1:55
it goes so fast. My kids are going to be nine. Yeah,

Michael Rutkowski 1:59
I know it's just wild.

Kerry Guard 2:01
I have

Michael Rutkowski 2:01
a teenager now. So yeah, over Thanksgiving ball game. Yeah, over Thanksgiving we celebrated my daughter's 13th birthday. So now I got a teenager, 13, going around 18. Oh yeah. I

Kerry Guard 2:17
have an eight year old who's operating in that motion. Well, not nine now, 90 year old operating as an 18 year old. It's so great. It's uh, slow down, girls, slow down. The world can wait. I know I love this, though I played board games last night. I want to do more puzzles and board games. And just like dining room table together, there's something about the dining room table, yeah, as a family that I just love with you, let

Michael Rutkowski 2:48
the phones aside and just connect. Yes,

Kerry Guard 2:52
couldn't I love that?

Michael Rutkowski 2:53
Couldn't agree more.

Kerry Guard 2:56
Two episodes ago, we left y'all hanging where we ended the episode talking about trusts in, how you could set them up in different locations away from where you live. And I wanted to crack that egg a little bit more to understand a what the benefits are, what is being outside of your area or jurisdiction even mean, and what how we go about it. So let's start first, Michael with sort of a recap for folks around trusts and why the location matters.

Michael Rutkowski 3:33
Yeah, good question. You know, rewind the clock, 2030, years ago on estate planning. Most estate planning needed to be done in your state with because all the states had much more specific rules that apply in each state. So 30 years ago, there was really no such thing as doing any other states trust. You know, if I live in Michigan doing a Delaware trust, or, if I live in Colorado, doing a Michigan trust, like those, things just didn't really happen. So you're working with your local estate planner to put in place a trust that complied with your state's rules, a will that complied with your state's rules, powers of attorney, you name it. Like every rule was every state was much different in how they regulated estate planning. Fast forward the clock to today, and we're now adopting, and actually, Michigan just did this as of July of 2024 we adopted a uniform Power of Attorney act. And this kind of this is the trend that keeps happening, is that states are becoming more aligned in how they do estate planning, which makes it great for us as estate planners to now explore different options. Like, does it make sense? Why would we do a trust for another state, for someone and it all the you know, it always comes back to, what are the clients goals? And then knowing. Your options when it comes to other goals. Asset protection is a big one and a great example here of why you might do a different state's trust. Not every state has adopted asset protection statutes, so which means you could execute a irrevocable trust in the state of Colorado, and I know this for a fact, Colorado has not adopted yet asset protection statutes. You could do a trust that says all the things, but if you were sued, a judge would immediately unwind that trust, and those assets would be exposed. So there would be no asset protection, because the state just doesn't recognize that. So if you live in a state that doesn't have a solid foundation for us for asset protection, you might want to look elsewhere. Same things goes for if we're doing tax planning, maybe we're looking at another state's trust to accomplish whatever goals we're looking to accomplish. Does that make sense?

Kerry Guard 5:58
It does. So it sounds like for two reasons. Two main reasons would be in case you get sued, and or tax planning. And tax planning, to my recollection of a few episodes ago, is more around if you have 12 million as an individual or 24 million as a married couple, is when that would come into play, right? So, but for everyday families who have a good amount of assets, and they want to protect them from, you know, potentially getting sued. Setting up in Michigan would help, yeah, alleviate that pain, as we talked about in the previous episode, about, you know, how a trust can support you from from that Yeah. So

Michael Rutkowski 6:38
let me, let me be clear here. Let's say you wanted to start with your foundational estate plan, a revocable living trust. That could easily make sense to just find a local estate planner and do that. But we even do sometimes planning for other families, if there's a relationship there, you know, if we've worked with mom and dad and the son who lives in Ohio has been part of the meetings all along and just trusts us and wants to work with us. We can help them. We're not out marketing across the country for Revocable Living Trusts, but Michigan actually has really solid asset protection statutes, so we've been doing a lot of Michigan asset protection trust for families all around the country, which has been super cool. And that's, you know, it's kind of a new development in the last 10 years or so.

Kerry Guard 7:27
I find it wild that you could live in like Tennessee, but set up a trust like there's no rules or guard rails around where you set your trust up. Am I understanding that? Yeah,

Michael Rutkowski 7:37
and, and, you know, it's an easy way, maybe, to understand that, and something we're all more accustomed to is setting up a business in another jurisdiction. So a lot of us have heard like, you should set up your business in Delaware, because Delaware is very, you know, friendly to corporations and the rules of that, it's the same thing. I mean, essentially a trust is very comparable to a business structure, and it's an entity, just like a business is, and some states have much more favorable rules for that entity than others do. So I think that's an easy way to understand, because we've all heard like, oh, set up your business in Nevada or Delaware, or, you know, these other states, not California, and trust, you know, the same, the same kind of things apply is, you know, what are we trying to accomplish, and what might be the benefits of setting up a trust in a different state versus your own?

Kerry Guard 8:34
What are the Are there any complications that we should be aware of, like when you set up a business in another state? There's some guidelines you need to follow in terms of, like, having a presence to some degree and those sort of things, yeah, anything in regards to that, that you need to be if you don't live there, yeah,

Michael Rutkowski 8:52
there's less restrictions than businesses, as far as, like, how you can set one up in another state. But what does apply, just like in businesses, is you're subjecting yourself to that jurisdiction. And what that means is, let's say you live in Ohio, and you're setting up a Michigan asset protection trust, if you're ever, if there's ever an issue related to that trust, it's governed by the laws of the state of Michigan. So we need to figure that out in the state of Michigan, whatever those issues are. So you might be in a court in the state of Michigan, and not that you can't hire an attorney to go represent you, and you don't even have to be there, but just know that that if, if someone is contesting the trust, which could be a benefit, right, like it's going to make it that much harder for someone to contest it, because if you live in Alabama and you have a Michigan trust, they're going to have to go up to Michigan to contest it. And so that's one more layer which could prevent someone from bringing an action against it. But if there's something else that needs to be figured out, it's going to have to be figured out in a Michigan jurisdiction. But in all honesty, if you've done the plan with us or any other attorney in any other state, they can. Probably help you get the thing resolved in that state, so it shouldn't really be a problem.

Kerry Guard 10:04
So you can show up to help with whoever's contesting it, and they don't have to be there. You could just go on their behalf. We can

Michael Rutkowski 10:14
do a whole episode on this. On this question, all depends. It all depends on what's the issue. And so kind of the heavier the issue. At some point, the client might have to show up. But if it's just some administrative stuff, like we're getting a new trustee appointed or something that can be done and now with Zoom, most courts allow zoom. There's some jurisdictions in the state of Michigan that actually do no more in person meetings. Wayne County in Michigan has has done away with in person meetings completely. And they do everything on Zoom. So a family can join via zoom. They can we can request any court to do that now, which is just incredible. That is incredible, as you can see as we talk through this, the barriers are coming down, the barriers of why it might be less advantageous to do another state's trust. They're all being removed. It wouldn't surprise me, in 10 years if they're completely removed, and now we can, it's, you know, we can work with any family in any state for every single issue, and it's just seamless. Sounds

Kerry Guard 11:21
like we're turning into one country in some regard.

Michael Rutkowski 11:24
Maybe I don't know every every state does have their specifics. So I mean, just, you know, here's another episode we could talk about. Is our rule is created. So usually there's, it starts with a federal mandate of like, here's the the baseline of the rule, and then every state is allowed to further restrict it. So okay, we've talked a lot about asset protection. The country says asset protection is okay, and then every state, then further says yes or no and what their rules are okay.

Kerry Guard 11:56
All right, let's circle back on that for sure, because I think that would be helpful for people to continue to wrap their heads around asset protection in general. It's a whole beast in and of itself, getting back to setting things up in a different state. If you're in Alabama and you want to go through this, do you need an estate planner in Alabama that then works with an estate planner in Michigan to do this? Or can you work directly with the estate planner in Michigan. What are the pros and cons of that

Michael Rutkowski 12:23
you can now work directly with the source so you can work directly with the lawyer in the other state that you want to, you want to do that, you know, but there's a lot of those relationships. Just like you said, as well. We work with a lawyer in Colorado that has we work hand in hand to get that trust. They kind of, you know, quarterback the process for their clients to make it easy so that they have a local presence. But we, we prepare the Trust for them so it kind of goes both ways. They can reach out, any family. Could reach out directly, and we can help them. Or, you know, we have relationships in other states, and you could do the same thing.

Kerry Guard 13:01
Is there anything I'm missing in terms of, you know, you sit across the table from families on on such a regular basis, and you and you help them through navigating some of these challenges. Is there any questions that come up from them that I'm missing here, or or things you'd like to warn them about in going down this path and starting and getting started in setting up a trust outside. Yeah, you know,

Michael Rutkowski 13:22
something to be aware of also is like, what states have adopted this uniform code? There's the trust one, and then there's one for powers of attorney as well. Because really, most families want to work with one person get it all done for them. And so it works best when we're working with a family that's in one of the states that that that adheres to the universal code, the uniform Power of Attorney act, for instance. So that way, we can not only do the trust, but we can do their powers of attorney as well, because they can use any state's Power of Attorney. So just little things like that. Most states have accepted this. I think we're up to like almost 35 now have have accepted the Uniform Code. You know you've got, you always have your typical outliers that are just going to never do it, like California, but it is what it is. They have their own rules and own codes for Medicaid planning. They have their the rest of the country, except for California has the same Medicaid rules, and then California has what's called Medi Cal. It's its own beast.

Kerry Guard 14:30
Of course they do, yeah. Not surprised, not surprised. In terms of getting started, do you have to start with an estate plan as a collective? Can you just do a trust. Can you just do a trust in different jurisdictions? What's your recommendation? There great

Michael Rutkowski 14:45
question. We do it every way. Someone who doesn't have any estate planning in place, we walk them through the entire process of what options they have, powers of attorney, wills, trusts, and we also do a lot of asset protection trusts. When it makes sense for someone who has their foundational plan. You know, we keep saying, Georgia, Ohio, in one of those states, and then they come to us just to layer on an asset protection trust. So all walks of life, really,

Kerry Guard 15:15
I love it. And what better way to help families than to ensure that their legacies are protected in a way that is a little bit more locked up, so to speak. You know,

Michael Rutkowski 15:29
the only other thing to be thinking about is kind of next level of asset protection planning, if this makes sense for the family, is offshore trust. So when, when we're talking about jurisdictions, there's other states, jurisdictions, and then there's other countries, jurisdictions. And really the only reason you'd want to do that is if you've already been sued, or you know, you're anticipating the lawsuit to happen, or you're just, you're in so many lawsuits that you can't even keep track anymore, we can actually establish a trust in another jurisdiction, country that will not allow any US person to go over and try to attach those assets. How

Kerry Guard 16:11
is that possible? Yeah, because there's one thing like, you're in Michigan, and so somebody comes to you to say, Hey, you're in Michigan, I'd like to set up a, you know, a trust in Michigan for asset protection. That's great. You're there in Michigan, but when you're talking about an entirely different country, I mean, what are the rules and regulations there in terms of being able Yeah, I mean,

Michael Rutkowski 16:31
you know, this is what you see in movies when people are talking about, like, offshore accounts, like, it's real, it's it's a real thing, and you can set up, you know, offshore trust in countries that if our country submits, submits a judgment to attach assets in the other country, those countries have such favorable rules against that that they're just like, No blocked. You cannot touch these assets. It's pretty wild.

Kerry Guard 16:59
That is wild. As somebody who lives in a different country, I have a whole host of questions, but hopefully people who are listening are don't have their hands and lots of lawsuit pies out there and are relatively clean. But hey, you know, when you own a bunch of businesses and you have a lot of assets, you know you might be finding yourself in some sticky situations,

Michael Rutkowski 17:23
you're a target often,

Kerry Guard 17:26
yeah? So if that's the case and you're a target and you need a trust that you prefer to be elsewhere, give us a call. Yeah. Well, this is wonderful. If you want to learn more about setting up your trust in another state or jurisdiction, please call us at 248-955-2842, or you can email Michael at MLR at rachalski Law firm.com Michael, before we go, we're going to talk again in in a few days here in a week or so. Well, you most look, you know, we might we talked about the downtime. Is that what you're most looking forward to? Or is there anything else coming up for you?

Michael Rutkowski 18:08
Yeah, my wife's brother's family is coming in town, and I can't wait, because he has three girls the same age as my three girls. So I think I'm just continuing with the mantra through the holidays of like, connect and take advantage of time with family.

Kerry Guard 18:25
Yes, for that and downtown.

Michael Rutkowski 18:28
The first of the year is a busy time for us. New Year's resolutions. Somehow estate planning makes that

Kerry Guard 18:34
well, if you were looking for for New Year's resolutions, maybe start looking into state planning and seeing if that's something that you might need, and if it is, give us a call. Give us a call. We'd love to help you out. Michael, thank you again. Thank you for listening. If you liked this episode, please like, subscribe and share this episode was brought to you the ratoski Law Firm, Michigan's leading asset protection estate planning, Medicaid and Elder Law Firm. And again, if you'd like our help with estate planning and asset protection needs, please call 248-955-2842, again, that's 248-955-2842,

have a wonderful holiday season. Everyone. Take care.