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Understanding Revocable Trusts in Missouri

How a Springfield Trust Law Firm Can Help with Revocable Trusts

Revocable trusts are an effective way to avoid probate and provide for asset management in the event of incapacity. In addition, revocable trusts–sometimes called “living” trusts–are incredibly flexible and can achieve many other goals, including tax, long-term care, and asset-protection planning. As such, it’s no surprise that a Springfield trust law firm may encourage you to select this option as part of your estate planning.

What is a Revocable Living Trust?

This is an agreement among three parties: the Trust-Makers, the Trustees (or Trust Managers), and the Trust Beneficiaries. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further “back-up” managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the trust maker’s death. With proper planning, the couple also can avoid or eliminate death taxes on their estate. The Revocable Living Trust may allow them to accomplish all this outside of any court proceeding.

Who Should Have a Revocable Living Trust?

Whether you are young or old, rich or poor, married or single, if you own titled assets such as a house and want your loved ones to avoid court interference at your death or incapacity, consider a revocable living trust. A trust allows you to bring all of your assets together under one plan. Additionally, parents of minor children (those under 18 years of age) should consider the benefits of having a trust in place to ensure their beneficiaries will receive their inheritance at an appropriate time rather than automatically gaining full access and control at the age of 18.

Creating a Living Trust or Revocable Trust in Missouri

Whatever you place into trust during your life will pass to your beneficiaries at your death without going through probate, avoiding the cost, delay, and publicity of probate. In addition, in the event of incapacity, a co-trustee can step in and manage the trust property without any fuss. While you can also accomplish this through a durable power of attorney, banks and other financial institutions are much more comfortable with trusts. They have been known to reject durable powers of attorney that are more than a few years old or to require that the drafting attorney certify that the power of attorney has not been revoked.

The secret to making revocable trusts work is to fund them. This means retitling assets, whether real estate, bank accounts, or investment accounts, in the name of the trust. All too often, attorneys draw up estate-planning documents, advise clients to fund their trusts, and then nothing happens. Trusts have no relation to assets that are not retitled. However, if you execute a “pour-over” will along with your trust, saying that at your death all of your assets will be distributed to your trust, your wishes as to the ultimate distribution of your estate will be carried out (assuming said assets have no designated beneficiaries). You just won’t avoid probate and will not have as strong protection in case of incapacity.

The logistics of funding your trust properly can feel daunting, and without proper funding your estate plan will not function as it was originally intended. Working closely with your estate planning attorney to ensure your trust is properly funded is a crucial step in creating and maintaining your estate plan.

Issues to Keep in Mind While Creating a Living Trust

The following are some of the issues revocable trust documents cover, as well as decisions you might need to make:

  • Who will serve as Successor Trustee if you become incapacitated or upon your passing?

Contact a Springfield Revocable Trust Lawyer Today for Trust Creation and Assistance

These and more issues need to be decided for all trusts. More complex trusts designed for tax and asset protection purposes present even more choices and get even longer and more complex. The same is true for trust administration. To draft a revocable trust, contact the Springfield trust law firm of LifeGen Law Group.