LIVING TRUSTS: COMMON MISUNDERSTANDINGS
Estate Planning Attorney St. Peters, MO
As any experienced estate planning attorney St. Peters, MO residents trust might tell you, it is important to start planning your estate while you are still in good health. Unfortunate events may occur, leaving your loved ones with asset litigation issues in addition to their grief. The Legacy Law Center has been helping families plan their estates since 2012. Our attorneys have experience in developing estate plans for a variety of clients’ needs.
It is highly recommended to plan your estate ahead of time to avoid a potentially lengthy probate court process. In many cases, living trusts or revocable trusts may be used to plan an estate. However, these documents are not perfect for everyone. An estate planning attorney St. Peters, MO can provide from our firm may be able to help you decide what plan best suits your wishes.
A living trust might be beneficial for managing your estate. For more information, you can always contact a estate planning attorney in St. Peters, MO for a consultation. In the meantime, here are a few aspects of living trusts that many people do not know.
Who is involved in a living trust?
A living trust, sometimes referred to as a revocable trust, is a contract that may be adjusted or revoked throughout your lifetime and it is used to plan an estate. A living trust can generally be divided between three parties: the grantor, the trustee, and the beneficiary.
- The grantor is the individual who writes the trust and who initially owns the estate.
- The trustee is the party responsible for managing the assets within the trust. Managing could refer to buying, selling, or loaning assets within the trust.
- Finally, the beneficiary is the party eligible to inherit the assets within the trust.
The grantor, trustee, and beneficiary are usually all the same party initially. After passing, a successor trustee will take over the management of the assets and the successor beneficiary or beneficiaries will be eligible to inherit the estate.
One major benefit of a living trust is that assets within the trust are not subject to probate. This is appealing to many since the probate process can be lengthy and costly. However, depending on the state, if the deceased had developed a proper will, the probate process may actually be relatively short and affordable.
A living trust can sometimes be expensive to develop and to maintain. A last will and testament, however, can be significantly more affordable. If your state offers a smooth probate process, a will could be the better option. An estate planning attorney St. Peters, MO has to offer can review the two options with you and help you understand more about each one.
Living Trusts and Assets
Assets within the living trust are still subject to creditors. The successor trustee may open a probate estate in order to begin the time requirement for creditors to collect. After death, creditors may be given an allotted amount of time to file claims toward the estate; if the time expires, the creditors will have to accept the losses.
Only certain assets may be included in a trust. For example, you may not include a retirement plan in a living trust.
It is not uncommon for some assets to be forgotten in the formulation of a trust. Any assets not included in the trust are subject to probate court. In cases where assets are left out of the living trust, the family will be required to endure the probate process in order to receive those assets.
Consult With an Estate Planning Attorney St. Peters, MO Families Depend On
Though there may be misunderstandings when it comes to living trusts, they may still be a viable tool when planning your estate. An St. Peters estate planning attorney from the Legacy Law Center may be able to sit down with you and discuss options that best suit your wishes.
Every estate is different and complying with state and local laws is imperative, so the advice from one of our estate planning attorneys may be able to save you time and money in the long run. Give us a call and schedule a consultation with an estate planning attorney St. Peters, MO trusts from the Legacy Law Center.
How is a will different from a trust?
If you are in the process of creating a plan for your family after your demise, you are likely considering whether you should have a will in addition to or instead of a trust. Although they are similar in that both wills and trusts identify beneficiaries, a St. Peters, MO estate planning attorney can explain that they differ significantly in other areas. Since trusts and wills are not the same thing, many people choose to execute both in an effort to ensure that all areas of the estate are handled after they pass. It is imperative that you educate yourself when deciding what is best for you and your family. It is also recommended that you seek advice from an estate planning attorney for St. Peters, MO who can answer any questions in addition to making sure that your wishes are executed appropriately.
Elements of a Will
A will is a legal document that ensures your wishes are granted after you pass. A will includes assets, beneficiaries and the identification of a guardian for minor children. A will is a clear-cut way of making sure your estate is properly distributed among the heirs identified by you and intended to take care of your family after you have passed. Unlike a trust, a will is likely to go through the probate process.
The probate process oversees the transference of property from the deceased to the beneficiaries. In the case of a well-written will, probate may just be a formality that involves paperwork. The downside of probate court is that the process can sometimes take a long time, especially if there is a disagreement among the family members. A reliable estate planning attorney in St. Peters, MO can help you determine if a will is right for your family.
Elements of a Trust
Trusts transfer assets from the individual to the trust, therefore avoiding probate and taxes. Trusts are legally binding documents that identify how and when the estate will be distributed to the named beneficiaries. Unlike a will, the trust can go into effect immediately. The creation of a trust is much more involved than a will, but they do have their merits to consider. The elements can vary depending on the type of trust, of which there are many. The two primary types are revocable and irrevocable.
Revocable trust- a revocable trust is how it sounds- it allows flexibility with changes, modifications or dissolution. Although the assets are transferred to the trust, they are still vulnerable to potential creditors who would need to file a petition to have access to them.
Irrevocable trust- in a nutshell, an irrevocable trust transfers all of your assets out of your estate and you no longer have control over them. The upside is that the estate is no longer subject to taxes, lawsuits or creditors.
How would an attorney be able to help?
When it comes to caring for your family, it is important to make sure that you cover all of the important details when deciding how to distribute your estate. An estate planning attorney serving St. Peters, MO who is experienced in such matters will make sure that the document you choose is comprehensive and well-executed. In addition, if you choose to adjust or modify the document due to asset, debt or beneficiary changes, your estate planning attorney for St. Peters, MO will know the necessary steps to maintain legality and integrity according to your wishes.
Irrevocable Trust Lawyer
Irrevocable trusts are a crucial element of estate planning, tax avoidance, and protection of assets. At one time, irrevocable trusts were used by the wealthy and elite, but today anyone with assets can benefit from them. Mastering an irrevocable trust takes time which is why some people avoid them even though they can be their best tool for the most effective estate plan. If you’re considering an irrevocable trust, but would like to find out if it’s right for you, consult with an estate planning attorney in St. Peters, MO from Legacy Law Center.
What is an Irrevocable Trust
An irrevocable trust is a type of trust which is created by the Grantor, and once created, it is impossible to revoke and reclaim the assets. Unlike a revocable trust, this type of trust is permanent.
At a basic level, once an asset is given to the irrevocable trust, it cannot be taken by creditors or anyone else. No one actually owns the asset, but rather it is owned by the trust.
Setting Up an Irrevocable Trust
An irrevocable trust must be created by a Grantor. This person brings the trust into existence and will be responsible for signing it. A Trustee must be appointed at the time of the trusts creation, and this person will be responsible for managing the trust and overseeing it’s terms. Once the trust has been created, the Grantor can give the trust assets which will be managed by the trustee on behalf of the beneficiaries.
Why Choose an Irrevocable Trust
An estate planning attorney for St. Peters, MO can tell you that there are a number of advantages to choosing an irrevocable trust, including:
- The trust can own almost any asset
- It protects the Grantor and Beneficiaries from divorce, legal problems, and creditors
- The assets can be kept in the family forever
- Assets can be removed from the Grantors taxable estate
- Death taxes can be avoided
Common Types of Irrevocable Trusts
There is not just one irrevocable trust; rather, they come in many shapes and sizes, and can fit to a broad range of situations. Below are some irrevocable trusts a St. Peters, MO estate planning attorney at our firm may use:
- Irrevocable Life Insurance Trust
- Spousal Lifetime Access Trust
- Disclaimer Trust
- Dynasty Trust
- Grantor Trust
- Grantor Retained Annuity Trust
- Qualified Domestic Trust
- Qualified Personal Residence Trust
- Education Trust
- Charitable Remainder Annuity Trust
- Bypass Trust
- Credit Shelter Trust
- Marital Trust
- AB Trust
- Pet Trust
The Need for a Trust Lawyer
Nearly all Grantors will need a trust lawyer to create the irrevocable trust, and almost all trusts will give the Trustee funds to hire a lawyer who can advise, counsel, and represent him or her. In general, it would be a wise choice to retain an estate planning attorney serving St. Peters, MO as soon as possible. This is especially true if you have just been named the Trustee of an irrevocable trust. In doing so, any disputes, estate litigation, or wrongful action can be avoided.
At Legacy Law Center, our trust lawyers have been advising clients on making sound decisions for an estate and irrevocable trust for decades. Guided by experience, knowledge, and a zealous passion for estate law, we can help you to make the right choices for your future and your heirs. Call us now for a free consultation with a trusted estate planning attorney in St. Peters, MO.