This month, Morton Elder Law is dedicating the blog to all-things related to Estate Planning and trusts. If your research regarding these topics is just beginning, we recommend that you check out the previous articles online: Estate & Asset Protection Planning, To Trust or not to Trust, and Benefits of a Beneficiary Controlled Trust.

While trust rights and options vary from state to state, Mississippi has a new law that can protect you for creditors. It’s called the Mississippi Qualified Disposition and Trust Law (commonly referred to as the Domestic Asset Protection Trusts, in other states.) This trust is designed to protect the given assets for creditors, and also allows you to control principal and income.

History & Impact

The Qualified Disposition in Trust Act is most pertinent to professionals who are in a high-risk profession, such as a physician. Effective July 1, 2014 in Mississippi, sixteen other states have passed similar laws, and several additional states are considering.

Historically, states have not protected trusts from creditors. This change has been made, state by state, in accordance with the increase in liability concerns and lawsuits in recent years.

Bill Basics

1. Under current Mississippi law, at least one of the trustees must be a Mississippi resident.
2. The person who creates the trust cannot be the trustee. However, you can still retain certain rights in regards to the trust, such as receiving updates on the actual receipt of income or principal.
3. There are several specific exceptions to this law that would allow certain creditors to obtain trust assets. For example, not paying child support.

For more specific details of the bill, check out this article by A Gannett Company

Feeling Confused?

Spend your time in other ways and let Morton Elder Law do the work. We’re experts, so give us a call and we will get you the information you need and the plan to execute it!

~ Ronald Morton