Asset Protection Planning For Personal Property

Asset protection planners and their Michigan clients have just been given a new gift. For many years the Michigan law provided that certain types of designated personal property, for instance stocks and bonds (and now brokerage accounts per applicable case law), if held as tenants by the entireties, is subject to the protections afforded like ownership of real estate. Therefore, if a husband and wife owns IBM stock as entireties property the creditors of only the wife cannot reach her interest in the stock. Similar rules apply to real estate owned in the entireties in Michigan. The problem was how to make sure such personal property was titled in the entireties and not jointly. Most banks and brokerage houses make it difficult to open an account in the entireties…they would tell our clients that joint ownership means the same thing. Now the Supreme Court of Michigan in Zavradinos, 482 Mich. 858 (2008), has decided that there is a statutory presumption that certain specified personal property held as joint tenants by a husband and wife is deemed property held by the entireties and protected from the creditors of one spouse…even if the account is followed by the designation “JTWROS.”