Trusts Lawyer Missouri
A trust is an agreement that determines how a person’s property is to be managed and distributed during his or her lifetime and also upon death.
A revocable living trust normally involves three parties:
Settlor (sometimes called a “Grantor” or “Trustor”) – This is the person who creates the trust, and is usually the only person who provides funding for the trust. More than one person can be a settlor of a trust, such as when a husband and wife join together to create a family trust.
Trustee – This is the person who holds title to the trust property and manages it according to the terms of the trust. The settlor often serves as trustee during his or her lifetime, and another person or a corporate trust company is named to serve as successor trustee after the settlor’s death or if the settlor is unable to continue serving for any reason.
Beneficiary – This is the person or entity that will receive the income or principal from the trust. This can be the settlor (and the settlor’s spouse) during his or her lifetime and the settlor’s children (or anyone else or a charity the settlor chooses to name) after the settlor’s death.
A trust is classified as a “living” trust when it is established during the settlor’s lifetime and as a “revocable” trust when the settlor has reserved the right to amend or revoke the trust during his or her lifetime.
When a trust is revocable, the settlor can revoke the trust (or even terminate it) at any time during his or her lifetime. This enables the settlor to take into account any change of circumstances such as marriage, divorce, death, disability, or even a “change of mind.” It also gives the settlor the peace of mind that he can “undo” what he has done.
A revocable living trust may be considered the principal document in an estate plan, but a will should accompany a revocable living trust. This type of will referred to as a “pour over” will, names the revocable living trust as the principal beneficiary. Thus, any property which the settlor failed to transfer to the trust during his or her lifetime is added to the trust upon the settlor’s death and distributed to (or held for the benefit of) the beneficiary according to the trust instructions. A properly funded revocable living trust avoids the cost, complication, and expense of probate altogether. Assets are also transferred more quickly and in private, rather than through the public process of a probate administration.
Revocable living trusts also allow for estate tax planning. While Missouri currently does not have an estate tax, the federal government does, and for clients worried about paying estate tax after their death, a revocable living trust can contain estate tax planning language to minimize estate taxes. Real estate, businesses, and other assets can continue to be actively managed by a successor trustee in central administration in much the same way as a settlor would have done before the settlor died or became incapacitated.
For example, a trustee can use trust assets to pay utility bills to keep the pipes from freezing, property maintenance expenses, and real estate taxes until the real estate is sold or distributed. The trustee might work out property distribution issues, such as some beneficiaries wanting the real estate while others want money.
The successor trustee can be a trusted relative or friend or can be a professional trustee such as a trust company or the trust department of a bank. Missouri law does not require an individual serving as successor trustee to be a Missouri resident.
Since the activities of the successor trustee are not ordinarily supervised by a court or other independent third party, the selection of the successor trustee should be carefully considered. Contact Legacy Law Center trusts lawyer Missouri today and we will be happy to help you!
What Five Factors Should You Consider Before Choosing a Successor Trustee?
When appointing a successor trustee, a Missouri trusts lawyer may recommend you have these five considerations in mind:
- Where the Successor Trustee Lives and If They’ll Have Enough Time
While the successor trustee doesn’t necessarily need to be near your beneficiaries to handle their obligations, it does make the process easier. Handling a trust takes a lot of time, and planning and ensuring your beneficiaries obtain your possessions can take months or more—especially if contention arises. As such, a successor trustee with a shorter commute time will be more effective. Additionally, you’ll want to consider if the trustee will have enough time to devote to their obligations.
- If They Understand Your Family’s Dynamics
Often, a person will name a beneficiary like an heir as a successor trustee. Other times, however, they may decide to elect a more neutral third party. Regardless, any successor trustee must understand your family’s dynamics. Of course, a lot of this will be laid out in your trust, but as most people know, there are some factors regarding family intra-dynamics that a trust or will can’t explain.
- Someone Who Is Trustworthy and Responsible
A successor trustee is responsible for settling a trust after a person passes away or becomes incapacitated. Their duties may include settling outstanding debts and ensuring beneficiaries receive the right possessions. As such, you want to name someone who is trustworthy, responsible, and possibly business-savvy. Ideally, they may also have some legal knowledge, but this isn’t always necessary as they’ll most likely work with a Missouri trusts lawyer. For these reasons, it’s vital to give extensive thought to who you name as your successor trustee. While many people choose a beneficiary, you don’t have to. While it might sound only natural to elect a beneficiary to handle your trust, there’s no rule that says you have to. In fact, it’s better if you don’t if you believe you don’t have a beneficiary than can handle your trust’s complex legal matters.
- Someone Effective At Communication and Handling Contention
Ideally, your trust won’t be contested by disgruntled family members who don’t understand why they weren’t included in the trust or who believe they should have received more. Unfortunately, contention can arise, and sometimes this contention can result in litigation. However, having a successor trustee who can effectively communicate, de-escalate a situation, or even be assertive, if possible, can go a long way in resolving these issues. Effective communication is also good even when there’s no contention—family members may simply have questions or be confused about how the entire process works.
- If They Feel Comfortable Handling the Role
Lastly, while some potential successor trustees may have all the required experience and skills, they may not want the job. It’s best to elect someone who feels comfortable handling the role and wants the job. If you’re planning to select a particular person to be a successor trustee, be sure to speak with them in advance to ensure they actually want the role. You should also speak with a Missouri trusts lawyer.
