Trust Funding Lawyer Missouri

Ever hear a story like this before?

A person you know has a trust, they die and their estate ends up in probate. Everyone is confused because they thought the whole point of having a trust is to avoid probate in the first place. The affairs of the person who passed away are a mess and a lot of money, time and energy is spent to resolve them.

Sound familiar? The problem was that the person did have a trust, which is terrific, but the trust was not properly funded.

What is trust funding?

In order to avoid probate, a revocable living trust must “fund” all of the trust assets into the trust after its creation. Trust funding is the process of funding all of the assets into the trust to avoid probate.

Creating a trust and funding a trust are two separate things. A trust funding lawyer can help you create a trust. However, most if not all attorneys will only help you fund some of your assets into your trust, usually your home.

Are there different methods of funding a trust?

Yes, assets can be funded into the trust prior to the death of the settlor or after the death of the settlor.

What’s the difference?

The basic difference is the method of funding. Funding assets into a trust prior to the death of the settlor usually means re-tilting the ownership of the asset into the name of the trust.

Funding assets into a trust after the death of the settlor usually means by use of beneficiary designations, payable on death (POD) and transfer on death (TOD) designations.

What are some examples?

In Missouri, one example is a TOD designation on your vehicle. A form can be completed which says that the vehicle is owned by Jack and Jill Smith, as husband and wife, with a TOD designation to “Jack and Jill Smith, as trustees of the Jack and Jill Revocable Living Trust.” Once the form is filled, a new title for the vehicle is issued, and upon the passing of Jack and Jill Smith, ownership of the vehicle transfers to the successor trustees of Jack and Jills trust, who will then distribute the vehicle, subject to any liens, to the trust beneficiaries named in their trust.

Why is trust funding so complicated and why don’t trust funding lawyers do it for you?

The problem with trust funding is that it is very detail oriented and often time consuming. For this reason, most attorneys cannot justify charging their clients at their hourly rate to do the funding for them. To do so effectively would probably cost anywhere between 50% and 100% of the cost of the trust itself. Attorneys aren’t being lazy, they just know clients don’t want to pay them to do something that a client can theoretically do themselves.

Instead, many trust funding lawyers provide a set of funding instructions. Those instructions, however, are complex and most people have no experience funding trusts.

Adding to the complexity is that the policies of banks and financial institutions vary widely. If you are attempting to create a POD designation for your bank account, you may encounter a teller at a bank who has never done this before, or who thinks they know how to handle this issue but actually does not.

This is why trust funding is considered somewhat of a “black hole” of estate planning. Clients want to protect themselves with a trust and attorneys want to provide that protection, but the protection is only complete when a trust is funded, which is the second part of the equation and just as complex as creating a trust.

So how can Legacy Law Center Help?

We have streamlined the process and our system allows us to complete funding for clients at a lesser cost than most firms. Our firm offers clients two solutions for funding. The first is the traditional set of instructions on trust funding, as most firms do. However, unlike most firms, within six months of signing your documents, we will meet to see where you are with funding. There is no charge for this meeting, but it ensures that your progress has been reviewed and at the end of the meeting, you’ll know what needs to be done to complete the funding. At the end of the meeting, you may decide to let us handle the funding for you. We charge a flat rate per item that needs to be transferred.

The second solution is to use our staff right away and pay a flat rate per item that needs to be transferred.

Another attorney completed my trust, but we never funded it. Can your firm fund it for us?

Yes, as long as you have a copy of all of the trust documents and know which items still need to be funded.

If I Have A Living Will, Do I Need A Trust?

Many people wonder if they need a trust if they already have a living will. A trust can essentially cover items of monetary value that a living will can’t. However, there are some limitations to a trust which is why many people add a will. For starters, a trust only covers things you specifically transferred into your trust. A will, on the other hand, can cover assets you haven’t transferred over yet.

A living trust also can’t handle complex matters like how you want your children to be cared for until they become adults. A living trust also can’t take care of any outstanding debts you may have. In short, in many situations, a living will complement a trust and vice-versa.

What are some advantages of a trust over a living will?

While everyone’s situation is different, many people elect to draft a trust for the following advantages over a living will:

Privacy: After a person passes away, their will becomes public. A trust remains private, and only the trustee and the person’s beneficiaries may access it.

You can avoid taxes: People pursue a trust over a living will for many of their assets because a trust allows them to avoid hefty estate taxes. It’s important to note, however, that these estate taxes only significantly affect those considered very wealthy.

More flexibility time-wise: Generally, a will tries to distribute all of a person’s assets at the sametime. Many people see this as an advantage, but for people wanting to control the rate of how their property gets distributed, a trust is the better option. For example, a trust can stipulate that they want their spouse to live in their house before it transfers to their children. Another example could be setting up monthly or yearly payment plans for their children before they mature enough to handle these payments themselves.

Is it possible to have a trust contested?

Just like with a living will, it’s possible to have your trust contested. Just like with a will, a trusted, when drafted with help from an attorney, is hard to contest. However, it’s possible to contest a trust in certain situations successfully. One situation can be if there’s evidence to believe that the trust maker drafted the trust while they were forced, influenced by an outside party, mentally incapacitated, or deceived.

Does it cost more to draft a trust than a living will?

Since a trust is generally more complicated than a living will, it’s usually more expensive to draft one. However, while you may need to pay more to draft your trust in the short term, in the long run, a trust can be cheaper than a living will. One reason is that a trust can help you avoid the probate process. The probate process can be extremely expensive, cause a lot of time, and put added stress on your surviving loved ones. When working with a Missouri trust funding lawyer, be sure to ask them if they recommend a living will or trust for your needs.

Trust Funding Lawyer Missouri