Why Living Trusts Are So Effective

A living trust is an extremely flexible estate planning tool and be used for a number of reasons. Sometimes a living trust is used as a will substitute in order to avoid the expense and delay of probate. Unlike a will, a living trust is a private document. A will is a public document and a copy of it can usually be obtained from the local probate court. A trust, however, is a private document and is not typically filed with the probate court. If title to the asset has been transferred into a living trust, that asset would avoid the probate process upon the death of the grantor.

The key to making a trust work is the transfer of title of the assets to the trustee. When the grantor of the trust creates a trust and transfers the title of the assets to the trustee, upon the grantor’s passing, the successor trustee holds title on behalf of the beneficiaries and the assets titled in the trust do not have to pass through probate.

A living trust is an especially effective vehicle when an individual owns real estate in two different states. By transferring the title to the real estate in both states to the trustee, the grantor avoids probate in the state in which he or she resides, as well as the state where the other property was owned.

Another common reason for using a living trust is to protect against a probate conservatorship proceeding upon the disability of the grantor. For example, if an individual creates a living trust and then subsequently has a stroke and becomes disabled and unable to manage his or her financial affairs, the assets in the trust can be managed by the successor trustee – not by a court appointed conservator. The assets are not owned in the grantor’s individual capacity, but rather, by the trustee, or successor trustee, of the grantor’s trust. Upon the grantor’s disability, the successor trustee assumes the trusteeship and manages the assets in the trust for the benefit of the grantor and consequently, the assets titled in trust can avoid the delay and expense of a court imposed conservatorship.

Another common reason for creating a living trust is to hold assets in the trust upon the grantor’s passing for the benefit of minor children or grandchildren. Creating a trust and choosing a successor trustee who will manage the assets for the minor children or grandchildren allows the grantor to provide for the beneficiaries’ college expenses, and their health, maintenance, support and the trust can also be drafted to provide for advanced educational degrees.

Additionally, by holding the assets in trust after the grantor’s passing and incorporating a spendthrift provision in the trust allows the assets in the trust to be protected against the beneficiaries’ creditors and their spendthrift propensities. Missouri law provides that the interest of a beneficiary which is held subject to a “spendthrift trust,” is sufficient to protect the assets from the creditors of the beneficiaries. 

As individuals age it is also quite common for a parent to establish a living trust and name a son or daughter to serve as a co-initial trustee. The son or daughter named as a co-initial trustee will assist the parent with the management of the assets and the payment of the parent’s liabilities.

Our attorneys offer a Complimentary Consultation to learn about your specific circumstances, answer your questions and provide you with a recommended action plan for your specific needs.  There is no obligation and no cost.
SCHEDULE CONSULTATION
 

Schedule Consultation

Follow Us

We invite you to follow us on social media:

 

icon facebook


icon linkedin


icon youtube

CMG

Office Location

Gregory E. Robinson, P.C.
1422 Elbridge Payne Rd
Suite #170
Chesterfield, MO 63017
TEL: 636-532-9500
 

Disclaimer

The choice of a lawyer is an important decision and should not be based solely on advertisements. Neither the Supreme Court of Missouri nor The Missouri Bar reviews or approves certifying organizations or specialist designations.

The information presented in this website by Gregory E. Robinson, P.C. is intended as general information and is not legal advice. You should contact an attorney to learn how the law applies to your specific situation. We welcome your phone calls as well as electronic inquiries.

Use of this web site, communicating through this web site or use of electronic email does not create an attorney-client relationship. Email is not a secure form of communication, please do not send confidential or sensitive information.

The information in this web site is not guaranteed to be correct, complete, or current. We make no warranty, expressed or implied, about the accuracy or reliability of the information at this website or at any other website to which this site is linked.

Images on the site include simulated portrayals of lawyers, clients, scenes and events.

The copyrights in all text, images, screens and other materials provided on this Site are owned by Gregory E. Robinson, P.C., and/or by third parties.