We often get clients who say, “I’d like to set up a Trust.” Yet, what type of trust you want to set up will depend on your situation.
One big advantage of most Trusts is they can help your heirs avoid probate court and, in many instances, can help keep your affairs private. Many trusts are not part of the probate court system and never become a matter of public record.
5 Common Types of Trusts in Missouri are:
- Testamentary Trusts. Testamentary Trusts have no power or effect until the Will of the deceased is probated. Although a testamentary trust will not avoid the need for probate and will become a public document as part of your Will, it can be useful in accomplishing many estate planning goals. The most common use we see of these are where individuals want an inexpensive estate plan with provisions for minor children.
- Revocable Trusts. Revocable Trusts are often referred to as “Living Trusts” because they are created while you are alive. Revocable Trusts are the most popular type of Trust. With a revocable trust, the person establishing the trust (this person is known as the grantor, trustor, or trustmaker) maintains complete control over the trust and may amend, revoke or terminate the trust at any time. Revocable trusts are generally used for asset management, probate avoidance, and some tax planning.
- Protection Trusts. Sometimes called a Medicaid Asset Protection or MAP Trust. Protection Trusts are crafted for a specific purpose, to protect the property inside (often a home, real estate, or farm land) from creditors and/or nursing homes. Because of its ability to protect real estate and other assets, Protection Trusts are becoming more and more popular, especially for individuals who do not have long-term care insurance.
- Supplemental Needs Trusts. Supplemental Needs Trusts are often called Special Needs Trust. They enable the donor to provide for the continuing care of a disabled spouse, child, relative or friend while allowing the beneficiary to also receive public benefits.
- Pet Trusts. More and more, clients are telling me they want a plan that ensure their pets will be well taken care of following their death. The Uniform Trust Code contains specific provisions allowing trusts to care for your pets after your death.