Trust Funding

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Trust Administration in Missouri…

Trust Administration in Missouri…


               Over the years, I have had the honor to serve as a trustee of a few living trusts, as my clients have requested.  It is an honor for these clients to choose me to help execute their estate plans and to work with their chosen trust beneficiaries in Missouri.

As a trust lawyer O’Fallon Missouri, it is interesting to see how things work in reality after a client has passed away.  I’ve always been pleasantly surprised at how much easier the process is than probate and a much less stressful process at that.

When a client passes away and I am the successor trustee, my job is to immediately secure all of the trust assets and to ascertain who are the beneficiaries of the trust.  It’s also my job to collect all the mail of the client to learn about any debts they may have.  This usually means having their mail forwarded to my office so that I can keep tabs on any amounts owed.

Because a revocable trust becomes irrevocable when the grantor (creator) dies, I have to obtain a tax identification number (TIN) from the IRS.  With the trust documents and the TIN in hand, I can visit the client’s bank of choice and access all funds held by the trust.  If the funds are payable on death to the trust, the process is a little different but I will still create a trust account to hold all the liquidated assets of the trust estate.

Assets like houses and cars have to be accessed and determined whether they are to go directly to a beneficiary via the trust.  If so, I make arrangements to work with that beneficiary to transfer that asset to them.  In a recent case, there was a mortgage against the property but very little cash.  The house was very nice but needed some money put into it to get it on the market.  Finding the right balance for this kind of situation is part of the job of the trustee.  In this particular case, we opted to stage the house but not to do things like paint it – we figured we could sell potential buyers on the fact that they could get it painted the color they want.  It turned out to be a great strategy.

Communication with beneficiaries is an important part of being a trustee.  In addition to providing a copy of the trust document to all beneficiaries, it’s important for the trustee to be proactive in letting beneficiaries know what’s going on and when they can expect their distribution of funds (or property) from the trust estate.

Finally, most trust documents empower the trustee to hire just about anyone they need to administer trust business, including financial advisors, attorneys and accountants.  It’s important that the trustee not moonlight as they are a fiduciary responsible to maintain trust funds for the beneficiaries.  Any loss attributed to malfeasance (investing in penny stocks resulting in financial loss, for example) by the trustee can result in personal liability.

Trust administration is a very complex area of law and requires the expertise of a trust administration lawyer O’Fallon, Missouri.


FREE Missouri Estate Planning Guide

FREE Missouri Estate Planning Guide

Free Missouri Estate Planning Guide


Funding your living trust…

Funding Your Living Trust

This blog entry explains the vital concept of funding your living trust, including explanation of the process and why it is so important.

What does “funding” mean when it comes to living trust?

In order to understand the concept of funding, imagine your trust as an empty box.  In order to avoid probate, we must fill the box with all of your assets, i.e. we must fund your living trust.  When you sign your living trust at our office, the box will be empty.  So, our job is to both help you fund the living trust for some of your assets and instruct you as to how to fund the remaining assets into the trust box.  This process is where attention to detail plays a major role.  We provide the details and make it easy for you.

How does a living trust get funded?

The process is relatively straightforward and depends on the types of assets you have.  However, the assets that must be funded in your living trust are your titled assets, i.e. real estate, bank accounts, IRA and 401(K) retirement accounts, brokerage accounts, cars, boats and trailers.  Basically anything with a title or that is set up as an account with a financial institution.
We also need to fund your personal property…everything not listed above, including furniture, jewelry, tools, clothing.  We draft a document that handles this aspect of funding.

How does Legacy Law Center help me with funding my living trust?

Our firm always funds

1.  Your home(s) / real property

2.  Your personal property

Your home(s) and other real property are funded by the drafting and recording of deeds.  We draft the documents, you sign them, we record them, we mail them to you once they are recorded.  Done.  If you have three homes, we draft and record three deeds.  Not a problem.

We also handle the funding of your personal property – everything you own that does not have a title – jewelry, tools, furniture, keepsakes, art, sporting goods, clothing, photos…basically everything in your house.

Your personal property is funded into your living trust with a document that we draft and you sign the day you sign your living trust.

What about funding everything else into my living trust?

For everything else, you will need to do a little bit of legwork.  But don’t fret.  We will provide detailed instructions on how to fund everything into your living trust, including your retirement accounts (401K / IRA / Roth IRA), regular investment and securities accounts, your bank accounts and any other types of titled assets like certificated stocks, savings bonds, boats / trailers / airplanes.  If you have a financial advisor, they can also help you with the instructions and make it easy.  If necessary, we’ll call your financial advisor from our office and set up an appointment for you to meet with them to handle the paperwork for those accounts.

And we keep an eye on you after you have signed the documents at our office.  We’ll call a couple of months later to see if everything has been funded and the trust box is full with all of your assets.  If not, we can help you complete the process. More than likely, however, the trust box will be full and we’ll be congratulating on a job well done.

Avoiding probate with a living trust in Missouri…

One of the most confusing things about estate planning is the living trust.  For one thing, it can have several different names, including revocable living trust, revocable trust, and sometimes just “trust”.  A living trust is called a living trust because it is set up during your life.  It is also revocable because you can change the terms at any time, as long as you have capacity.

A living trust is an agreement which lays out provisions by which assets owned by trust are managed, who can manage them and when you die, who gets the assets, if they ever get them at all.

A major selling point (one of many actually) of the living trust is that it can help you avoid probate.  Probate is the process by which your assets are administered through the court.  It’s a complex, ugly, time consuming and expensive process.  Bottomline is something you want to avoid.  Ask just about anyone who has ever dealt with the process and they will likely immediately agree and tell you a convoluted story about what a PITA (pain in the ____) it was.

So just how does a living trust help you avoid probate?   Well, just having a trust by itself won’t do the trick.  To avoid probate with a living trust in Missouri, you need to FUND the trust.

What is funding?

As a concept, think of your trust as a giant box.  When you sign your trust, you are going to fund it was something (called a “res”).  For my clients, we fund the trust with all of their personal property.

As a concept, think of your trust as a box.  Funding the trust is putting all of your assets in the trust box.


trust box

In Missouri, a beneficiary deed can be used to put your home into the trust.  That document says that when you die, your trust owns the home.  Thus, the trustee manages the home and decides whether to sell it, keep it, rent it or whatever is necessary.

Your bank accounts can be re-titled to change from “Bob Smith and Mary Smith” to “The Smith Living Trust Dated _________, 2014”.   There are easy methods to transfer the other asses into your trust (IRA, stocks, boats, life insurance).  The bottomline is that if you die with a trust that is really an empty box, all of your assets are going to end up in probate.

Legacy Law Center spends a lot of time with clients explaining not only how their trust works, but as you saw above, just as importantly, HOW TO FUND YOUR TRUST.

A fully funded trust will avoid probate and save your family a lot of headaches, time and money.



Simple estate planning in Missouri…



Complex Planning

Estate planning in general is pretty complex.  However, depending on the needs of a client, it doesn’t necessarily have to be.

I’ve stated before that there are four cornerstones of any estate plan:  living trust and/or will, healthcare power of attorney, living will and financial power of attorney.

For a lot of folks, a simple will does just fine.  A simple will is generally defined as a will containing no trusts with a standard distribution scheme from the testator (the person making the will).

As an example, if husband and wife have two grown kids, relatively simple assets and husband’s will states that when husband dies, everything goes to wife, unless she has predeceased, then to the children equally, that would be a simple will.

No trust is necessary because there is no concern about estate taxes and simple assets to avoid probate.  If the family owns a home, a beneficiary deed can be drafted and recorded to ensure the home avoids probate upon the second spouse’s death.

Powers of attorney are complex documents but in the simplest of explanations allow you to name someone to make healthcare and financial decisions on your behalf if you become incapacitated and cannot do so yourself.  These are vitally important documents to have.  In the example above, husband would ordinarily name wife to make decisions on his behalf if he was unable to do so, then either or both of his kids as an alternate in the event that wife was not able to do so.

Because simple estate plans have less provisions and less documents, they are easier for an attorney to draft and cheaper to create.

Simplified estate planning is usually not a good fit for families with more assets, combined families due to divorce and re-marriage and families with a history of fighting or where members don’t get along.