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.
Over-controlling daughter-in-law? Lazy son-in-law? These are just two reasons why parents may want to keep a daughter-in-law or son-in-law out of their estate.
Other common reasons include: (i) the fact that the in-law spends too much money; (ii) the in-law has their own kids; (iii) the in-law will inherit from their own parents and grandparents; (iv) some parents want to keep everything in the “bloodlines” because they inherited from parents and grandparents; others just don’t like their in-laws; and (v) others fear that their children will get divorced in the future and lose their inheritance.
These concerns are real. And parents have several options to address these concerns in an estate planning program. Part of the reason we strongly recommend clients seek out an attorney focused on estate planning and elder law is because they will have the knowledge to help you tailor a plan to your needs and concerns.
One option is simply leave the inheritance to the child – outright. Some parents reason that an inheritance is the separate property of the child so that should take care of it. However, inheritances that children receive are often, either intentionally or unintentionally, commingled to the extent that it loses its separate property status.
A second option parents have is to leave their child’s inheritance to a trust for the benefit of the child. If the parents name the child as the trustee, the child’s spouse could exert influence over the child and force the child to take excessive distributions from the trust. But some parents tell me, “Let’s leave it to a trust for our child and name our child as the trustee. If our child screws it up, so be it. We did what we could do to try to protect him without taking away his access to his inheritance.”
A third option is to leave your child’s inheritance to a trust, but name a 3rd party as the trustee of the trust – in essence restricting your child’s access to his or her inheritance. By restricting your child’s access to the trust, you are restricting your child’s spouse from influencing your child to access the trust. You may even wish to name your child’s children as the principal beneficiaries of the trust so that when your child later passes away, remaining trust assets would stay in the bloodlines benefiting your grandchildren. Your child’s withdrawal or distribution rights become key components to this program.
There are many factors that play into how you leave an inheritance to your children. An expert can help you choose the best option for you and your family.
Missouri Estate Planning Attorney
In March, I moved law offices. As anyone who has ever moved knows, it takes a little bit of time to get unpacked and set up. Yet, after several weeks of late nights and working weekends, we are full-speed ahead at our new location at 2007 Independence Street in Cape Girardeau.
This afternoon I have a young client coming in. In fact, she just celebrated her 18th birthday. So you may be asking yourself, why would a young woman need to come see an estate planning and elder law attorney shortly after her 18th birthday?
The reason: because her deceased father didn’t do any estate planning, now his 18-year-old daughter has to handle getting his affairs in order. Perhaps that sentence is a little blunt, perhaps even harsh. Yet, it is also true.
An Estate Plan serves as a blue print for you and your family. It puts you in control. Yet, without it, you may leave a mess that your loved ones have to sort out.
As so often is the case, the father in this scenario didn’t have a great deal of wealth. By most economic standards, he would have been considered lower middle class. Yet, regardless of one’s wealth, there are a few foundational estate planning documents everyone needs: A Durable Power of Attorney, a Healthcare Directive, and some type of transfer instrument like a Will or Trust. By not having these, the little property he did pass on to his children created a legal mess… complete with underage beneficiaries, unintended beneficiaries, and completely unnecessary court costs and probate fees.
Planning is better – not only for you, but especially for your loved ones.
Recently I worked with a family who had a family farm just outside Cape Girardeau county. They told me they had three main estate planning concerns.
First, they had two kids. They wanted to make sure that when they were gone, their son and daughter would be treated fairly. It was also important to them that no decision regarding their property could be made without both their son and daughter agreeing to it.
Second, they had about 150 acres. The husband’s father had gone spent several years in a nursing home so he had first-hand experience with his family having to “spend down” their hard-earned savings to pay for his nursing home care. The husband wanted to know what was available so that his wife and kids wouldn’t have to go through a similar experience.
Third, they were involved in a small business and wanted to arrange their affairs so that if they were sued, that no one could take their home away from them.
There are certain types of revocable trusts, irrevocable trusts, and limited liability companies that can be set up in Missouri which can help families solve these problems.
Last week we held 2 estate planning workshops – one in Cape Girardeau and one in Jackson. The major purpose of these workshops is to educate individuals about what happens with no planning and the difference planning can make. I have yet to have someone attend the workshop and tell me that they didn’t learn something of benefit to them.
At the most recent workshop we covered topics that we often get questions about:
What happens to me and my property if I can’t manage it anymore?
What is probate?
I’ve got a Last Will & Testament. I’m fine, right?
What is a trust and why are they so popular?
How can I protect my property from the nursing home?
Our next workshop will be in April. If you would like to attend, call our office at 573-334-5125 or send us an email at email@example.com.
As an attorney focused on Elder Law, many clients ask me, “How much does a nursing home around Cape Girardeau cost?”
The answer is that it depends on which facility you go into. Different facilities have different rates… and they change frequently.
As of November 1, 2016, here is the cost of skilled nursing facilities in Cape Girardeau County. If you know of someone who is concerned that they will lose most or all of their hard-earned assets due to nursing home costs, we can help. Just call.
makerspace: noun (mākərˌspās) sometimes also referred to as hackerspace, hackspace, and fablab, a place where people with shared interests, especially in computing or technology, can gather to work on projects while sharing ideas, equipment, and knowledge.
Good things are happening in downtown Cape. It began with the award winning renovation of Broadway (http://goo.gl/eHTpPR) and has continued as many new businesses have opened up shop. I’m very excited for the next phase of development in downtown Cape, the Marquette Tech District (http://goo.gl/JlUquW and http://goo.gl/9PGZxm).
As part of that development, I have been able to assist a new Makerspace with getting off the ground, including setting up a Missouri Nonprofit Corporation for them. I invite you to get to know Cape Crucible Inc. (https://www.facebook.com/capecrucible/) and see the cool things they are doing.
When possible (and most of the time it is possible), we charge our clients flat fees for estate planning work. That way, our clients will know exactly how much it will cost to have their will, trust, or other estate planning documents prepared.
A Canadian court had this to say about legal services, “A person requiring legal advice does not set out to buy time. Rather the object of the exercise is to buy services.” Our focus is on delivering you the services you want, in the most efficient manner possible.
We prefer flat fees for 4 main reasons:
Flat Fees Creates Predictability for the Client. Before you choose what services to have us perform, you will know what it will cost. This is much better than receiving a bill in the mail after the fact and being surprised at the number of hours a project took.
Flat Fees Incentivize us to Work Efficiently. Under the billable hour model, attorneys have a disincentive to leverage past work. Sometimes, you even see attorney’s reinventing the wheel simply because they get to charge for the time they spend “reinventing”. With flat fees, our focus is on working efficiently to provide you with the services and outcome you desire.
Flat Fees Focus on Value. Our focus is on delivering value to each and every one of our clients. Value means delivering peace of mind today and saving time, money, and energy in the future.
Flat Fees Lead to Early Assessment and Evaluation of Case. Before entering into a flat fee billing agreement, we will thoroughly assess the matter. We will review and evaluate each known step in the process, determine how much work will be required, and what contingencies may arise. Our flat fee will reflect the amount of work required, the complexity of the matter, the skill set needed, and the value provided. The benefit to you is that you get a clear picture at the beginning of the case, rather than when are half way through the matter.
Flat fees are just another way we deliver value to our estate planning clients throughout Missouri. To learn more, feel free to contract our Cape Girardeau office at 573-334-5125.