The use of a Revocable Trust in estate planning serves several functions, one of which is the avoidance of probate. In addition, the Revocable Trust ensures privacy, may reduce estate taxes, avoids guardianship proceedings, and provides protection of assets for children. The Revocable Trust is a document created to hold all assets on behalf of the Grantor or maker of the Trust. The Revocable Trust allows the Grantor to name the Trustee to handle the assets during his lifetime and after his death. Typically, the Grantor names himself or his spouse as the Trustee of the Trust during his lifetime. After the Grantor’s death, he may name his spouse, another family member, or a corporate Trustee to handle the trust assets and distribute them in accordance with the provisions of the Trust.
Avoiding probate by creating a Revocable Trust allows an individual to keep his or her affairs private and not subject to public inquiry. In addition, the Revocable Trust avoids the expenses associated with the probate of a Will, and delays in distribution of assets.
In order for an individual to avoid probate by using a Revocable Trust, the individual must re-title all of his assets to the name of the Revocable Trust. Any assets titled in the individual’s name will be governed by the individual’s Will or the State of Missouri, and will need to go through a probate proceeding to be distributed.
With a revocable trust, an individual maintains the right to add and subtract assets as he wishes. He also retains the right to change the terms of the trust or to revoke it entirely at any time. This flexibility allows an individual, for example, to change the beneficiaries, the ages at which they are to receive assets, the proportions of the trust fund they are to receive, and the trustees. Generally, revocable trusts become irrevocable when the person creating the trust dies.
A Revocable Trust allows an individual to avoid having to go through a court governed guardianship proceeding in the event the individual becomes incapacitated and cannot care for himself or handle his own financial affairs. If an individual is not competent at any time before his death, the trustee of his revocable trust will automatically begin acting as the caretaker of his property, negating the need for the guardianship proceeding. This can avoid the expensive and embarrassing public guardianship proceeding, where the individual’s children have to prove that he is not able to manage his own affairs. A revocable trust combined with a power of attorney can provide the most complete protection available. In addition, there are no annual reports or accountings to be filed with the probate court, and the whole process remains very private and not subject to public disclosure.
Additionally, a Revocable Trust allows the creator to establish lifetime trusts for her children. The benefits of establishing lifetime trusts for children include protection from the trust assets from the child’s creditors, known or unknown. If the child is sued for any reason, the assets set aside in trust are protected from a judgment. In addition, the assets are protected from a spouse in the event of a divorce. A lifetime trust for children also may reduce income and estate taxes, and is not subject to probate upon the child’s death. The trust also allows a parent to set specific stipulations on how and when assets are distributed to a child, such as upon completion of college or attaining a certain age.
Contact me, a dedicated Saint Louis County Estate Planning Attorney.
For your other reference needs, see my Resources page.
Jennifer A. Coke, Attorney at Law, at The Coke Law Firm in St. Louis, MO, serves clients throughout St. Louis City and St. Louis County including Tower Grove, the Central West End, the Loop, and cities of Chesterfield, Creve Coeur, West Port, Ballwin, Kirkwood, Shrewsbury, Glendale, Clayton, Brentwood, University City, Sunset Hills, Webster Groves, Town & Country and many other local municipalities in Missouri.
The Coke Law Firm
Jennifer A. Coke, Attorney at Law
