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What's the difference between a will and a revocable living trust, and which do I need?
A will distributes assets through probate - a court-supervised process that takes time and becomes public record. A revocable living trust bypasses probate entirely, keeps your affairs private, and allows for faster distribution to beneficiaries. Many clients benefit from both: a trust to handle major assets and a "pour-over" will as a safety net.
Does a trust automatically protect my assets once I sign it?
No - and this is one of the most common estate planning mistakes. A trust only controls assets that have been properly funded into it. That means retitling real estate, reassigning financial accounts, and updating beneficiary designations. Klug Law Firm ensures every trust is paired with the correct funding documents, deeds, and assignments to make it legally effective.
What is an Irrevocable Life Insurance Trust, and why would I want one?
An Irrevocable Life Insurance Trust (ILIT) holds ownership of your life insurance policy. Because you no longer own the policy, the death benefit is removed from your taxable estate - potentially saving heirs significant estate tax. It's a sophisticated planning tool best suited for clients with larger estates or high-value policies.
How does a Special Needs Trust work, and when should one be created?
A Special Needs Trust allows a disabled individual to receive assets (from an inheritance, lawsuit settlement, or gift) without disqualifying them from Medicaid, SSI, or other government benefits. It should typically be created before any significant assets are transferred - retroactive planning is often impossible once benefits eligibility is affected.
What factors determine which business entity - LLC, corporation, or partnership - is right for my situation?
The right structure depends on your liability exposure, tax goals, ownership structure, succession plans, and how you intend to raise capital. For example, an LLC offers flexible taxation and liability protection for many small businesses, while a corporation may be preferable when seeking outside investors or planning for an eventual sale. Klug Law Firm evaluates your long-term objectives before recommending a structure.
What's the difference between an asset purchase and a stock purchase when buying a business?
In an asset purchase, the buyer acquires specific assets (and selects which liabilities to assume), offering cleaner liability protection. In a stock purchase, the buyer acquires the entire legal entity - including all past liabilities. Each approach carries different tax implications and due diligence requirements. The choice significantly impacts both the purchase price negotiation and post-closing exposure.
What should I do if I receive an IRS audit notice?
Don't respond to the IRS without legal representation. The scope of an audit can expand significantly if it's handled improperly. A tax attorney can help you understand what's actually being examined, respond strategically, and protect your rights throughout the process. Klug Law Firm handles tax compliance audits, employment tax audits, and appeals at both the state and federal levels.
What is an Offer in Compromise, and does it actually work?
An Offer in Compromise (OIC) is a formal agreement with the IRS that settles a tax debt for less than the full amount owed - but only when full collection is doubtful or would cause undue hardship. The IRS rejects a large percentage of OIC applications submitted without professional guidance. Our experience shows that proper documentation and legal framing of your financial circumstances are critical to a successful outcome.
Can a corporate officer be held personally liable for unpaid payroll taxes?
Yes. The IRS can assess trust fund penalty liability against individuals deemed "responsible officers" - including presidents, vice presidents, and others with authority over tax payments. These assessments can be significant and follow individuals personally. Klug Law Firm has successfully defended officers in IRS and Michigan Department of Treasury trust fund cases, including cases where liability was eliminated entirely.
How does Michigan's probate process work, and how long does it typically take?
Michigan probate involves formally validating a will (or establishing intestate succession), appointing a Personal Representative, inventorying assets, paying creditors, and distributing the estate. Informal probate can be relatively straightforward; contested estates or those with complex assets take considerably longer - sometimes years. A properly funded trust avoids probate entirely, which is one of the primary reasons attorneys recommend trust-based planning.
What happens to a Michigan estate if there is no will?
Michigan's intestate succession laws determine how assets are distributed - typically to a spouse, then children, then other relatives in a set statutory order. This legal default may not reflect what the deceased would have wanted, and it does nothing to minimize estate taxes, protect a special needs beneficiary, or facilitate business succession. Dying without a will (or trust) also guarantees probate.
How can an elderly parent qualify for Medicaid to cover nursing home costs without losing everything?
Michigan Medicaid eligibility for long-term care has strict asset and income limits, but legal planning tools - including Medicaid Qualified Trusts and spend-down strategies - can help preserve assets for a spouse or heirs while achieving qualification. Timing matters: Medicaid has a five-year lookback period on asset transfers. Klug Law Firm assists families with Medicaid planning, conservatorship proceedings, and trust structuring to help elderly clients qualify while protecting what they've built.
