Articles Posted in Director and Officer Liability

For those of us attorneys who have devoted substantial time to and assisted clients with asset protection planning over the years it is welcome news that Michigan has adopted the Qualified Dispositions in Trust Act, effective February 5, 2017. Continue Reading

Today, with the proliferation of books, articles and seminars focused on asset protection planning, there is scarcely a lawyer about who does not know that limited liability companies have some built in asset protection planning features. Even to the uninitiated, there is a vague understanding of creditors not being able to seize a member’s interest and some awareness of the charging order remedy.
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When clients come to see me for asset protection planning, it is clear that the client has preconceived notions about offshore trusts that are integral to some type of abusive tax shelters or other nefarious activity. This is not surprising. The media recently reported about a man from Niagara Falls, NY who was sentenced to 36 months in prison for selling and promoting an abusive tax shelter scheme that involved offshore trusts and domestic trusts. It is stories like this one that confuse many clients and give them unnecessary concerns about what asset protection planning is all about. As I always tell my clients, the asset protection planning we do for our clients is not designed to shelter income or avoid the payment of income taxes; instead it utilizes legitimate structures with the simple goal of helping these clients legally position their assets in a way which makes them less vulnerable to creditors.
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In Michigan, as well as other states, all corporate directors face risks. As fiduciaries of their corporations they have numerous obligations and assume a myriad of duties they are required to carry out. However, due to the regulatory environment under which they operate, bank directors have significantly greater exposure than directors of non-financial institutions. But there is one thing all directors have in common, personal liability for breach of their duties. Accordingly, bank directors should consult an asset protection planning attorney and complete and implement a plan for asset protection, along with confirming the adequacy of their director’s and officer’s liability insurance coverage, before agreeing to serve on the board.
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