St. Louis | St. Charles Trust Attorney
Lawyers Providing Trusts, Wills and Estate Planning Services
Trusts are not exclusively for exceptionally wealthy people. While trusts do provide a number of advantages for high net worth people, trusts also provide many protections and advantages most people can utilize, regardless of financial status.
In short, a trust is a document that transfers assets of the grantor, the individual executing the trust, to his/her beneficiaries. The trust is administered by a trustee who is bound by this document to execute the wishes of the grantor as stated in the trust. Trusts offer many benefits, including:
- Minimizing Inheritance Tax
- Avoiding Costs Associated With Probate
- Reducing Legal Complications
- Protecting Assets From Litigation
To accommodate the unique circumstances of individuals, there are many different trusts, each with its own distinct advantages. Selecting the right trust for you involves understanding your goals for your family and also for your financial future.
Categories Of Trusts
- Revocable Trusts
- Irrevocable Trusts
- Living Trusts
- Testamentary Trusts
This trust is one that can be terminated or changed by the grantor at will.
This trust is one that cannot be terminated or changed once it’s executed.
This trust is created to function while the grantor still has many productive years left and can be used to limit exposure of assets to litigation as well as to avoid probate and the costs associated with it.
This trust is one that is created through a will and as such, must go through the probate process.
Types of Trusts
As mentioned above, the unique requirements and circumstances of individuals also call for unique types of trusts.
- Simple Living Trust
- Self-Declaration Trust
- Support Trust
- Charitable Trust
- Charitable Remainder Trust
- Spendthrift Trust
- Insurance Trust
This is the trust recommended to most people. This trust transfers ownership of assets to the trust. The grantor still has control of the assets during his/her lifetime. The grantor also has the ability to change or terminate the trust if he/she so chooses, and so is considered a revocable trust as long as the grantor is alive.
This is a type of living trust. It is established to provide income for the grantor for the remainder of his/her life. It also includes a provision for the distribution of his property at the event of his/her death.
This trust is used to provide specific support to the beneficiaries identified in the trust. The support can only include the cost of education and healthcare, and general support. No other support is allowed. Trustees are bound to only provide support for the categories stipulated and no more.
This trust provides significant estate and capital gains tax advantages. The support given to the specified charity can be distributed in a lump sum or in annual payments.
A subcategory of the Charitable Trust, this trust provides support for the grantor for the remainder of his/her life. A charity will act as the trustee to manage and invest assets to produce income for the grantor. The charity owns all property stipulated in the trust.
This trust can protect the assets identified in the trust by putting limitations on the beneficiary’s ability to access assets or funds in the trust. Instead of paying the beneficiary directly, this trust pays money to third parties for the benefit of the beneficiary. The trustee also has the ability to deny payments altogether. Since payments are not made directly to the beneficiary, this trust can protect the beneficiary from creditors because creditors will have no access to the assets or funds of the trust.
This trust is irrevocable, and is designed to become the beneficiary of the grantor’s insurance policy or policies. It is used to take care of probate and federal estate tax expenses.
Simple Living Trust For The Average Person
As stated above, the simple living trust is a revocable trust until the death of the grantor. At that time, it becomes an irrevocable trust, and the trustee executes the wishes of the grantor as stated in the trust. Benefit: it allows the trustee to bypass probate court when it comes to the distribution of assets as stated in the trust. All the trustee needs to carry out the wishes of the grantor is the death certificate of the grantor and a certified copy of the trustee document.
To protect assets not covered by the trust, there is the pour-over will. With this will, at the time of death of the grantor, all remaining assets will be added to the trust and can then be handled by the trustee.
The Importance Of Naming A Trustee
As you can imagine naming a trustee is very important when you have a trust. A married couple with children will normally have both parents named as trustees. In the event of the death of one of the parents, the remaining parent becomes the sole trustee. At that time, it is extremely critical that the remaining trustee names a successor trustee. When both parents are deceased, the trust can be executed in two ways. In the first method, the trust is divided into shares and the children (beneficiaries) receive equal shares to the trust. The second method, which is preferred, gives trustees more control of the trust and flexibility when dealing with unexpected emergencies or events. In this method, the trust is operated as a single fund until the children reach a specific age as specified in the trust. At that time, the beneficiary will be given his share in the trust.
Trusts play a vital part in your estate planning whether you are an average person or one of more comfortable means. With the many different types of trusts available, there is one to meet the individual goals of every one planning for the future. Trusts allow you to secure the financial future of your beneficiaries and at the same time protect them from reckless overspending. With a trust, you can leave a lasting gift to your favorite charity, and still have the ability to support yourself as long as you need it.
Contact estate planning attorney Greg Robinson at 636-532-9500 in
St. Louis or 636-946-4979 in St. Charles County to arrange for a FREE initial consultation.
Estate planning attorney Greg Robinson provides estate planning, asset protection and business law services for communities in the greater St Louis and St Charles Counties, including Chesterfield, Town & Country, Ballwin, Ellisville, Wildwood, Creve Coeur, St. Charles, St. Peters, O’Fallon and Wentzville.
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