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
Should I Remove a Trustee from My Trust?
The job of a trustee is a critically important one. Trustees generally function as legal owners of the trust they oversee, as they are granted the power and responsibility to manage the assets affected by the trust and to distribute assets while respecting the trust’s terms. As a result, it may be important to replace a trustee from time to time. For a variety of reasons, a current trustee may not be serving a trust’s best interests and therefore should no longer be granted the authority to manage it. Consulting with an estate planning attorney in St. Peters, MO can help you to navigate such a difficult decision.
Mismanagement, Neglect and Hostility
Not everyone takes the job of serving as a trustee seriously. Some trustees allow their responsibilities to lapse and simply neglect to carry out the duties that are required of the position. Others could mismanage assets, either intentionally or unintentionally. Under any of these circumstances, replacing the trustee in question may be a good idea. Everyone makes mistakes and lets things slip from time to time. However, the assets contained within your trust are valuable and should be treated with a great deal of care and respect. It is generally a good idea to entrust this position to someone who is up to its challenges and responsibilities.
It should also be noted that trustees may be replaced for a variety of questionable behavior, even if it is not illegal or related to disrespecting the terms of a trust. For example, if a trustee is hostile towards the trust’s beneficiaries and makes their lives unnecessarily stressful, this alone may serve as grounds to seek a replacement. An estate planning attorney in St. Peters, MO can examine questionable behavior with you and recommend what steps to take next.
Changes in Personal Circumstance
If your trustee has died, it is important to speak with your attorney about formally securing a replacement. It is not enough to simply appoint a new trustee in an informal way. The legal documentation associated with your trust will need to be updated using legally enforceable mechanisms.
Similarly, if you opt to replace your trustee due to a change in personal circumstance, this process must be done formally. Oftentimes, trustees are replaced following divorce or a family falling out. Other times, a trustee’s illness, serious injury, need for substance abuse treatment or other personal challenge may result in solid reasons to seek a replacement. Once you have chosen a new trustee, please consult your estate planning attorney St. Peters, MO about formally making the switch.
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.
If you are interested in revising your estate plan, would like to remove a trustee from your trust or generally have questions about estate planning, please consider reaching out to a St. Peters, MO estate planning attorney. Legal questions rarely have straightforward answers. As a result, it is usually not a good idea to commit to a plan of action related to a legal situation until you have spoken with an attorney who is experienced in similar matters. Once you have explained your particular circumstances to an attorney, he or she will be able to advise you of your legal options so that you can make a decision that is as informed as possible.
Estate Planning Attorney St. Peters Missouri
One of the most important tools in estate planning is making a will. Depending on the type of assets a person has, a will may be the only thing they need to do, while others may consider trusts and other legal options for their estates. No matter the size of your estate, it is important to have a St Peters Missouri estate planning attorney helping you with these documents in order to ensure they are drafted correctly according to the laws of Missouri.
When a person is drafting a will, they will need to choose the person they want to be the executor of the estate. The person who is chosen as the executor should be someone that the person trusts completely to protect their assets. The executor can be a trusted family member or friend. You can also choose an estate attorney St. Peters, MO offers or financial institution to be the executor if you feel that would be a better choice for your family.
As an estate planning attorney St. Peters Missouri can explain, the duties of an executor include the following:
- Locating and making an inventory of all the decedent’s assets and property
- Notifying any creditors and paying any outstanding debts or financial obligations using funds from the estate
- Oversee and manage all assets and property while the estate is moving through the probate process
- Distribute property to the decedent’s family, including their surviving spouse and dependents, and any other beneficiaries named in the decedent’s will or as required by law
Being an executor requires focus, organizational skills, and dedication because there are administrative responsibilities, legal filings, and deadlines that need to be met in order to probate the estate properly. Although a family member can be chosen as an executor, one of the things to consider is that the months following the death of a loved one can be a very emotional one. After all, it is never easy to go through the grieving process, but then to add the responsibilities of probating an estate may add too much stress to that family member.
The person chosen should also understand what your wishes are for your estate and this will make it easier for them to carry out your wishes. There is also something else to keep in mind when choosing your executor. No matter how concise your will may be, there may still be family members who will dispute what your final wishes were. The executor is the person who is responsible for mediating these disputes and hopefully avoid costly and long-drawn-out probate if the disputes spill into the courtroom and contesting the will.
I Don’t Consider Myself Wealthy. Is Estate Planning for Me?
An estate planning attorney St. Peters, Missouri offers might tell you that the short answer is “yes.”
It is a common misconception that estate planning is only for the wealthy, small business owners, or for other people with a laundry list of assets that will need to be divided among their heirs after they pass. However, estate planning is something that you should consider, regardless of what you will leave behind when you die. An estate planning attorney in St. Peters, Missouri from Legacy Law Center would be pleased to help you accomplish this.
Legacy Law Center: We Can Guide You Through the Process
It is no surprise that death can place a huge burden on your loved ones. In addition to dealing with grief, your friends and family will also be spending a great deal of time dealing with the logistical and legal aspects of your passing. From arranging funeral expenses to getting a death certificate, the number of tasks on the list of someone who is only beginning to heal from a loss can seem crushing. Taking time before your death to outline what will happen to your assets will save your family precious time and energy in the wake of your passing. An experienced estate planning attorney St. Peters, Missouri families trust, like one from Legacy Law Center, can guide you through the estate planning process and tell you exactly what kind of planning makes the most sense for you. A little time spent now will save your family a time-consuming and potentially expensive and emotional process after your death.
A big reason people with smaller estates may want the assistance of an estate planning attorney St. Peters, Missouri locals turn to is to seek advice regarding how to avoid “probate.” Many people have a will, which will lays how how their assets will be distributed at the time of their death. In most cases, however, a will must go through probate before the assets may be distributed. Probate is a court process in which a judge will authenticate a will, determine the deceased person’s assets, make sure all of the deceased person’s debts are paid from the estate, and then, finally, transfer remaining assets as directed by the will. This process can take time, depriving your loved ones of access to the money or things that you left to them. The process can also be expensive and will generally require that court costs be paid from your estate before the assets are distributed.
Fortunately, there are several ways to avoid the probate process, but you will need to take steps now. A St. Peters estate planning attorney from our firm can provide guidance about which options to avoid probate make the most sense for you. Perhaps you will want to create a living trust. If so, you will need to make sure your beneficiary information is complete on all life insurance policies, retirement accounts, and bank accounts.
An Estate Planning Attorney St. Peters, Missouri Community Members Rely On
Avoiding probate can save your loved ones time and money, even if you don’t think you have much to leave behind. Death is often accompanied by an unexpected financial burden, such as funeral expenses, or a reduction in household income. Your effort now to reduce the financial burden on your heirs through estate planning could make an important difference to your family in the even of your death. Call an estate planning attorney St. Peters, Missouri residents choose from Legacy Law Center to discuss how to avoid probate and other estate planning options.
Call a St Peters Missouri Estate Planning Attorney
If you need to set up your estate plan, contact Legacy Law Center and meet with an estate planning attorney St. Peters Missouri clients recommend and find out how we can help. Call our office today.
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.