How Can Trusts Help Avoid Probate And Protect Assets?
Thinking about what will happen to your property after you're gone can be difficult. You may want your home, savings, investments, or other assets to pass to the people you care about without unnecessary delays or disputes. It's also common to worry about what would happen if you became unable to manage your affairs yourself.
Estate planning can raise difficult questions, but a comprehensive estate plan, including a comprehensive will and supplementary trusts, can give your family clear direction on how to administer your estate and provide for your loved ones.
At Foulk Law Firm LLC, we help individuals and families consider whether a trust could support their estate planning goals. Depending on the type of trust and how it's created and funded, a trust may help keep certain assets out of probate while providing instructions for how they should be managed or distributed.
Located in Brentwood, Missouri, we serve clients throughout St. Louis, St. Charles, and Jefferson County in Missouri, as well as Madison, Saint Clair, and Monroe County in Illinois. Reach out to us today to schedule a free consultation and discuss your estate planning goals.
How Trusts Can Help Avoid Probate
Probate is the court-supervised process used to administer certain assets after someone dies. The process typically involves validating the deceased's will, identifying and valuing assets, paying debts and taxes, and distributing the estate property to the deceased's beneficiaries. The process can take time and may involve court filings and other administrative requirements.
However, a properly established and funded living trust may allow certain assets to pass to your beneficiaries without going through probate. In a revocable living trust, for example, you can generally transfer ownership of selected assets to the trust while retaining control over them during your lifetime. You can also typically amend or revoke the trust while you have the legal capacity to do so.
After your death, your successor trustee can generally administer the trust property according to the instructions you've provided. Because the assets are owned by the trust rather than by your estate, those assets may not need to pass through probate.
However, creating a trust doesn't automatically keep every asset outside probate. Assets that weren't properly transferred to the trust may still have to go through probate. Other assets, such as certain retirement accounts and life insurance policies, may pass according to beneficiary designations rather than through the trust.
An experienced Missouri estate planning attorney can review your assets and explain which ones may need to be transferred into the trust and which may be handled through other estate planning tools.
Trusts and Asset Protection Strategies
Probate avoidance is only one potential reason to establish a trust. Depending on the type of trust you choose, the document may also provide ways to manage and protect assets for you or your beneficiaries.
Revocable trusts generally allow you to retain substantial control over the funded assets during your lifetime. Because you still control the property, a revocable trust typically doesn't provide the same type of protection from your creditors that certain irrevocable trusts may provide.
Irrevocable trusts require you to give up control over your funded property in exchange for potential benefits. Depending on how it's structured and applicable law, an irrevocable trust may help protect assets from certain future claims or support specific tax or family planning objectives. Both trust structures may be able to address several concerns, including:
Long-term asset management: A trustee can manage property according to instructions you've established, rather than passing everything to your beneficiaries immediately.
Protection for beneficiaries: Certain trust provisions may help protect assets for beneficiaries with financial, personal, or other concerns.
Incapacity planning: A trust can provide instructions for managing trust property if you can no longer handle financial matters yourself.
Family wealth planning: Trusts can establish conditions and timing for distributions to your children, grandchildren, or other beneficiaries.
Specific asset goals: Certain trusts may be designed around particular property, investments, business interests, or other assets.
The protections available depend heavily on the type of trust, the language used in the document, and the circumstances surrounding the transfer of assets. A Missouri trust lawyer can help you determine whether a particular trust structure fits the protection you're seeking.
What Makes a Trust Effective?
A trust is more than a document you sign and file in a cabinet. For a trust to accomplish its intended purposes, its provisions and associated assets need to work together. If you establish a trust but fail to transfer ownership of appropriate assets into it, those assets may not receive the intended probate benefits. The exact process for transferring ownership varies depending on the type of property.
Your choice of trustee also matters. Your trustee will be responsible for managing your trust property, following the terms of the document, communicating with beneficiaries, and making the necessary distributions. You may select an individual, professional fiduciary, or another appropriate option depending on your circumstances.
Contact an Experienced Estate Planning Attorney in St. Louis, Missouri
Trusts can help avoid probate for properly funded trust assets while providing instructions for asset management and distribution. Certain trust structures may offer additional benefits for asset protection, incapacity planning, and long-term family planning. The important question is whether the particular trust you're considering fits your goals and circumstances.
At Foulk Law Firm, LLC, our attorney, Donald Foulk, can help you determine whether a trust could benefit your estate. Located in Brentwood, Missouri, we serve clients in St. Louis, St. Charles, and Jefferson County, Missouri, as well as Madison, Saint Clair, and Monroe County, Illinois. If you're considering a trust or want to review an existing estate plan, contact us to schedule a free consultation.