Gregory E. Robinson, P.C.

Video Transcript

Hi folks. Thanks for stopping by. My name is Greg Robinson. Today I’d like to talk to you about a living trust.

There are three positions on the trustee. The first position is that of the grantor. That’s the position of the person who creates or writes the document. The second position on the team is that of the trustee. The trustee manages the assets according to the terms contained in the trust itself. And the third position on the team is that of the beneficiary. That’s the best position to be in because you get the benefits of the assets in the trust. So there are three positions on the team. The grantor, also known as the trustor, the trustee, and the beneficiary.

I’ve always compared a living trust to a safe. Everyone knows that a safe holds and protects assets, but in order for a safe to be of any value to you, you actually have to transfer your assets and put them in the safe. The same analogy applies to a trust. In order for a trust to protect you, you actually have to take your assets and transfer them into your trust. For example, if you own a house, you would typically transfer your house into the name of the trust by using a deed. In Missouri, we typically use a general warranty deed.

The trust protects us in various events in our life. For example, the trust can protect us if we become disabled. It protects us from a court imposed conservatorship. If we die, a trust protects us from going through probate. And additionally, the trust can hold our assets and distribute them out to our beneficiaries according to, what we believe, to be the best terms for the beneficiaries. Additionally, everyone knows that when we die if we have assets in our individual name, our assets have to go to probate.

The same analogy applies to a trust. We know a trust is an inanimate object just like a safe and a safe can’t die or get sick, so the assets that are in our trust are protected from going through probate. And one of the biggest benefits of a trust is the ability to control the distribution of the assets to the beneficiaries.

There are many different ways to distribute the assets. Rather than making the distribution at ages, some people choose to distribute the assets out to the beneficiaries over a period of years from their date of death. Trusts are very flexible instruments and I’ve always said that trusts are just like shoes. They have to be fitted to your individual situation and your circumstances. If you have any other questions, feel free to visit our website at gregoryerobinson.com. Thanks again.

Video Transcript

Hi folks, thanks for stopping by.

Today I’d like to talk with you about some of the fiduciary duties of trustees.

Many books have been written regarding the fiduciary duties of trustees. Law school classes focus on fiduciary duties of trustees. When the trustees fail to adhere to their fiduciary duties they put themselves potentially in a position of possibly having to defend a breach of fiduciary duty lawsuit.

Missouri has adopted its version of the Uniform Trust Code. In states that have adopted the UTC, there is typically a state statute setting forth the requirements to create a trust.

To create a valid trust in MO, the settlor must have the capacity to create a trust, the settlor must indicate an intention to create a trust, and if the trust is a non-charitable trust, which for most people is a living trust, the trust must have a definite beneficiary, the trustee must have duties to perform and the same person cannot be the sole trustee and sole beneficiary.

I would like to focus my comments today on the trustee’s duties. As I mentioned, there are a myriad of sources that discuss trustees duties. I will only focus today on some basic duties of trustees.

Once a valid trust has been created there are typically five duties imposed upon a trustee.

In no particular order, the first duty imposed upon trustees is the duty of loyalty. The MO statute states in part, a trustee shall administer the trust solely in the interests of the beneficiaries. I chose the duty of loyalty as the first duty to discuss today because it is such a well known and probably the most fundamental duty of the trustee.

The trustee has a duty of loyalty to the beneficiaries of the trust regarding the trust property. A trustee cannot place his or her personal interests above those of the beneficiaries. For example, a trustee might breach his duty of loyalty to the beneficiaries by buying property from the trust for himself. Or a trustee might breach his duty of loyalty if he had a duty to buy a specific piece of property for the trust and decided to buy that property for himself.

The trustee cannot allow his personal interests to compete with those of the beneficiaries of the trust. The trustee who has an adverse interest and has breached his duty to the beneficiaries usually will have to resign.

Some states, like MO, have a statute that typically would allow the trustee not to be liable for breach of a fiduciary duty if the breach were disclosed to the beneficiaries; the beneficiaries consent to the conduct constituting the breach, release the trustee from the liability for the breach or ratify the transaction, which constituted the breach.

The second duty imposed upon trustees is the duty to be prudent. MO’s statute states, that a trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.

Again, the duty of prudence is one of the fundamental duties of a trustee. A trustee’s action or inaction will not be judged in hindsight but, as stated above, by considering the purposes, terms, distribution requirements and other circumstances of the trust.

The third duty that is imposed upon a trustee after a trust has been validly created is the duty to act and carry out, or administer, the terms of the trust.

Mo’s statute states in part, upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries. Trustees do not have a duty to accept a trusteeship. The trustee named in the document can decline to serve. If however the trustee accepts the trusteeship, the trustee has a duty to administer the trust diligently. The trustee must read the governing trust instrument and carry out the intentions of the settlor as expressed in the document.

The fourth duty imposed upon trustees of a validly created trust is the duty to give personal attention to the trust. The trustees relationship with the beneficiaries is s personal one, the entire administration of the trust cannot be delegated. MO does allow however, a trustee to delegate to an agent duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances. The ability to delegate to an agent is derived from the Uniform Prudent investor Act. One of my upcoming videos will discuss the investment duties of a trustee in more detail and the influence of the Uniform Prudent Investor Act in the investment duties of trustees.

The last duty of a trustee that I wanted to discuss with you today is the duty to account to the beneficiaries. The trustee’s duty to account to the beneficiaries is a fundamental feature of the trust relationship. The duty to account encompasses a broad array of obligations imposed upon the trustee. For instance the trustee has a duty to keep records of the administration of the trust. Additionally, the trust property must be kept separate from the trustees own personal property.

An interesting and controversial duty imposed upon trustees in MO is the duty to inform and report to the beneficiaries at least annually and provide a report of the trust property, liabilities, receipts, disbursements, including the source and amount of the trustee’s compensation, a listing of the trust assets and their respective market value.

The concept of providing all available information to the beneficiary is to allow the beneficiary to protect his or her interests.

There are many duties imposed upon trustees. I have only attempted to scratch the surface with you today.

If you have questions about the duties of a trustee, or if you are serving as a trustee, please feel free to call our office to schedule a time with us to discuss your concerns.

Thanks for stopping by.

Video Transcript

Hi folks. Thanks for stopping by. My name is Greg Robinson and today I’d like to discuss with you the law of non-compete agreements in the state of Missouri.

In Missouri, the courts engage in this balancing process. They balance the interests of the employer in protecting its trade secrets and customer contacts, against the interest of the employee having mobility between employers and to provide for his or her family. The Missouri Supreme Court has stated that employers have a legitimate interest in engaging a highly trained workforce without the risk of losing customers and business secrets after an employee leaves his or her employment.  

The Missouri Supreme Court has also said that employees have a legitimate interest in having mobility between employers and to provide for their families and to advance their careers. So Missouri courts balance these competing interests by enforcing non-compete agreements in limited circumstances. Non-compete agreements will be enforced if they are reasonable and, according to the Missouri Supreme Court, that reasonability is if it is no more restrictive than as necessary to protect the legitimate interest of the employer. Consequently, to be no more restrictive, it must be narrowly tailored geographically and temporally.

Missouri Supreme Courts have stated that restrictive covenants will not be enforced to protect employer against mere competition. Restrictive covenants will only be enforced to protect an employer against undue competition and to protect the employers trade secrets and customer contacts.

In determining whether to protect customer contacts, the courts of Missouri have stated that they will look at the quality, frequency and duration of an employee’s exposure to an employer’s customers. Even when restrictive covenants are reasonable in space and time, covenants not to compete are only enforceable if their scope is reasonable to protect the employer’s legitimate interests without unduly restricting the employee’s freedom to move between employers and to provide for his or her family.

Thanks for stopping by. If you have any questions, please feel free to contact us.

Below are videos attorney Greg Robinson has developed to help you learn more about asset protection, business law and estate planning topics.

Estate Planning:

• Probate Process
• Duties of Personal Representative - Part 1
• Duties of Personal Representative - Part 2
• Avoiding Probate with a Living Trust
• Power of Attorney
• Five Fiduciary Duties of Trustees

Business Law:

• Protecting Personal Assets by Forming a Corporation
• Buy-Sell Agreements
• Non-Compete Agreements

Video Transcript

Hi folks. Thanks for stopping by. My name is Greg Robinson. Today I’d like to discuss with you a last will and testament and the probate courts. The person who creates a will is typically called the testator. If you die having executed a will, it is said that you die testate. If you die without having executed a will, it is said that you die intestate. However, even if you die without having executed a will, the laws of the state in which you reside have a plan of distribution for you called statues of intestate distribution.

The will controls the assets in the decedent’s individual name. However, some types of assets, such as IRAs and life insurance policies, are governed by beneficiary designations. The beneficiary designation of a life insurance policy or the IRA would control not the terms of the bill.

The will is effective upon the death of the decedent. Many times people will call our office stating that their spouse is disabled and that the individual has executed a will. And they inquire whether or not they have the authority under the terms of the will to take certain action on the disabled persons behalf. Again, a will is only effective upon the death of an individual. A power of attorney is a document which gives an individual authority to act on his or her behalf if the individual should become incapacitated. If you have questions on powers of attorney, feel free to view our video on powers of attorney.

An individual who has the custody of the will has the duty to admit it to probate court upon the death of the decedent. Probate is actually a Latin word that means to prove. And in this case what we are proving is that the will is actually the will of the decedent.

Once the will is admitted to probate court, if there are assets in the decedents name that exceed 40,000 dollars, a personal representative will be appointed on behalf of the decedent. That personal representative is named in the testators will. Additionally, the testator, in his will, will typically dispense with having the personal representative by a bond and also allow the personal representative to serve independently, without being supervised by the probate court.

Once a personal representative has been appointed, he or she has a duty to inventory the assets of the estate, pay the debts of the decedent, and eventually distribute the assets to those individuals who are named under the decedents will. The advantage of having the will probated is that the personal representative is overseen by the probate court.

One of the disadvantages of probate court is that it is expensive. For example, the personal representative and the attorney are both paid on a graduated fee schedule. Another disadvantage of probate court is that it is time consuming. In Missouri we have both a six month and a one year statute of limitation, which must be satisfied before the assets can be distributed to the beneficiaries. Another disadvantage of probate court is that the assets, which are shown on the inventory, are a public record. Anyone can come down to probate court and review the inventory which has been filed by the personal representative.

An easier way to pay the bills and transfer assets to the beneficiaries and avoid the probate process, is through the use of a living trust. If you have questions about living trust, feel free to view our video discussing same. If you have any questions on probate, feel free to give us a call. Thanks once again.