Living Trust Attorneys in Chesterfield, MO
When it comes to estate planning tools, living trusts are quite popular for their many advantages and can be valuable to help you achieve a variety of estate planning goals. Learn the basics of creating, funding, and managing living trusts from our Chesterfield living trust attorneys and see why it may be best to work with a trusts lawyer to make the process easier.
How Does a Living Trust Work?
A living trust is a separate entity created to hold the assets of a trustor and transfer them to beneficiaries after the trustor’s death. A living trust is named that way because it is created and funded by the trustor during their lifetime, as opposed to a testamentary trust that is only created and funded through a decedent’s last will and testament after the trustor passes away.
Some types of living trusts can be changed or canceled at any time while the trust creator is alive, while others cannot easily be changed without the approval of each beneficiary. A living trust allows for greater control over asset distribution and eliminates the need for probate, as trust property can be transferred directly to its named beneficiaries after the grantor’s death.
What Kind of Assets Can Be Placed in a Living Trust?
There are a wide variety of assets that can be placed in a living trust. Most commonly, people funding a living trust choose to add assets such as real estate, investment or financial accounts, life insurance proceeds, and even personal property such as art, collections, jewelry, and items with a high value, such as high-end furniture and even musical instruments.
Other items, such as retirement accounts, medical savings accounts, and any bank account that you are actively using, should not be placed into a trust. It is worth mentioning that if you are creating a revocable living trust, the trust assets continue to be part of your taxable estate and may still be subject to estate taxes when you pass away. On the other hand, items placed in an irrevocable living trust are no longer counted as part of your taxable estate as they are technically owned by the trust.
Are There Different Types of Living Trusts?
There are several different types of living trusts that can fit most any estate planning goal. Many living trusts can be classified as revocable or irrevocable. A revocable trust can be modified, changed, or terminated at any time. An irrevocable trust, on the other hand, cannot be changed or canceled without the prior authorization of all trust beneficiaries. Assets placed in a revocable trust are no longer counted towards the trustor’s taxable estate.
A common example of a living trust is an asset protection trust, which is created to protect the trust creator’s assets from creditors or lawsuits. This type of trust can be irrevocable or revocable and typically has strict guidelines and regulations. There are also special needs trusts, which help provide for the special needs of a family member who may have a disability or chronic illness, ensuring they receive proper care and enjoy a good quality of life without affecting their eligibility for government benefits. Another common example is a charitable trust, which is created to benefit a charitable organization or cause. The trust owner can receive tax benefits for charitable giving, and the trust can continue to benefit the chosen charity after the trust creator’s passing.
How Do I Know Which Type of Living Trust to Choose?
Choosing the right type of trust may seem like an overwhelming task. Even after spending hours researching online and learning all about trusts, you may still be feeling confused and unsure of where even to start. The truth is there is no one-size-fits-all approach when it comes to estate planning. Trusts can be used to fulfill a variety of needs and estate planning goals, so the right kind of trust for you will depend on what you wish to achieve with your estate plans in the long run.
The best way to get started is to talk to an experienced living trust lawyer. Your lawyer can make sure you have a good understanding of all the advantages and disadvantages of a living trust, discuss your personal goals and preferences for estate planning and make recommendations based on your unique profile.
Call Our Chesterfield Living Trust Attorneys Today!
At Mid-America Law Practice, LLC, our living trust attorneys have helped clients select, create and fund their trusts with transparency and ease. We will help you determine whether a trust fits into your overall estate planning strategies and what type of trust will work for you. We can also help you should a dispute with your trustee or beneficiaries arise. No matter how simple or complex your estate may be, taking the time to protect it and safeguard your legacy is absolutely crucial. If you are considering adding a trust to your estate plans, need help managing it, or simply would like answers to estate planning questions, reach out to our law firm in Chesterfield, MO, by calling (314) 347-3567 to request a free consultation.