5 Common Types of Trusts in Missouri

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.

Trusts - Trustee, Assets, Property, Law, Benefits

5 Common Types of Trusts in Missouri are:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

Introducing Cape Crucible Inc. – A Nonprofit Makerspace in Cape Girardeau

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).

Cape Crucible Inc. - Logo
Cape Crucible Inc. – Logo

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.


4 Ways Flat Fee Billing Benefits Estate Planning Clients

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.

3 Common Types of Asset Protection

Clients often ask what steps can be done to protect their assets. My typical response: “what type of asset protection are you interested in?” Most clients aren’t quite sure how to respond… they are unaware that there are different types of asset protection available. The 3 most common types of asset protection I help clients with are:

  1. Asset Protection from Medicaid. Medicaid is a health program administered through the states. Missouri’s version of Medicaid is called Mo HealthNet. Medicaid provides very valuable care for those with limited financial resources. This is often the case with elderly individuals who go into a nursing home. Since nursing home care is expensive (thousands of dollars per month), elderly individuals are often very interested in steps they can take to protect some of their assets for their loved ones. The most common tool we use for this is called a Medicaid Asset Protection (MAP) Trust. One common use of a MAP Trust is to protect real estate so that it passes to a client’s children instead of having a lien placed on it by Medicaid.
  2. Asset Protection from Business Liabilities. Most business owners have the fear of “What if…”. “What if my employee does something and as a result I am sued?” “What if my product injures someone?” “What if a customer is injured on my property?” The answer to those “What ifs” is to plan. Part of that planning is certainly insurance. Yet, another part is structuring your business (businesses) the correct way to minimize liability. Whether your business is an LLC, S-Corp, or C-Corp, there are steps we can take to minimize an owner’s personal liability for business incidents.
  3. Asset Protection from Lawsuits. Almost daily you hear about someone getting sued. Sometimes the claims have merit. Other times the claims are frivolous and a waste of time, energy, and money. Planning ahead is important to minimize your personal liability. Especially if you are in a higher risk profession (doctor, pharmacist, lawyer, etc.), planning today is critical for asset protection tomorrow. This planning ranges from the simple (titling assets or establishing LLCs) to the complex (offshore trusts with professional trust protectors).

Protecting assets is doable… the initial steps are straight forward and simple… the key is asking the question and getting started before you need it. There is no silver bullet for asset protection. Instead, think of it as layers of protection. Get started building your layers of asset protection today.

What are the Requirements for a Valid Last Will & Testament in Missouri?

In Missouri, there are 5 requirements for a will to be valid:

  1. It must be in writing;
  2. It must be signed by the testator (the person making the Will) or by someone by his direction and in his presence;
  3. Testator must be over age 18;
  4. Testator must be of sound mind; and
  5. It must be witnessed or attested to by two or more competent witnesses who also sign the will in the presence of the testator,

Most Wills today are also self-proving. This means that the testator and the two witnesses appear before a notary public and state something substantially similar to:

  1. The testator signed and executed the instrument as his last Will;
  2. The testator willingly signed or willingly directed another to sign for him;
  3. The testator executed it as his free and voluntary act for the purposes therein expressed;
  4. That each of the witnesses, in the presence and hearing of the testator, signed the Will as witness; and
  5. That to the best of the knowledge of each witness, the testator was at that time eighteen or more years of age, of sound mind, and under no constraint or undue influence. (see RSMO 474.337).

Having a self-proving will simplifies and expedites the probate process.

Clients sometimes ask how they can revoke a prior Will. Missouri statute 474.400 contains the answer:

“No will in writing, except in the cases herein mentioned, nor any part thereof, shall be revoked, except by a (1) subsequent will in writing, or by (2) burning, (3) cancelling, (4) tearing or (5) obliterating the same, by the testator, or in his presence, and by his consent and direction.”

Clients often contact me asking for an appointment to make a Will. While visiting together, it becomes clear that what they are really interested in is avoiding probate. Often, much to the client’s surprise, they learn that a Will does not avoid probate. I’ll repeat that again because it is so important: a Will, by itself, does not avoid probate. To avoid probate, consider a Revocable Living Trust and Beneficiary Designations.

Special Needs Trusts in Missouri

Here are answers to a few of the commonly asked questions regarding Special Needs Trusts (SNT) in Missouri.

What is a Special Needs Trust?

A special needs trust is a trust designed for beneficiaries who are disabled, either physically or mentally. It is written so the beneficiary can enjoy the use of property that is held in the trust for his or her benefit, while at the same time allowing the beneficiary to receive essential needs-based government benefits.

Most Special Needs Trust beneficiaries are eligible or actively seek eligibility for Supplemental Security Income (SSI) and Medicaid (in Missouri, Medicaid is called Mo HealthNet) which are each needs-based programs. Needs based programs require the beneficiary have limited “available resources” (income and assets).

Without a Special Needs Trust, a gift to a disabled loved one will likely be considered an “available resource” thereby making the loved one ineligible for the government benefit until after all of the beneficiary’s available resources has been spent down to a minimal amount such as $1,000.

How does a Special Needs Trust help?

A special needs trust allows a trustee (a trusted individual or organization, someone other than the beneficiary) to control and manage the trust property on your loved one’s behalf. Because your loved one has no control over the money, SSI and Mo HealthNet administrators do not consider the trust funds as “available resources.” A parent could set aside millions of dollars in a special needs trust for a child and still have the child qualify for SSI and Mo Healthnet. In most cases, the amounts are much more modest.

Most special needs trusts are designed for Supplemental Care. This means the SNT exists to supplement available government benefits, not to replace them.

What can a Special Needs Trust pay for?

A lot. Here is a partial list of what the funds in a Special Needs Trust can be used for:

  • Appropriate recreational activities, hobbies and vacations
  • Educational and training opportunities
  • Hire personal assistants to help the beneficiary with activities of daily livings (ADLs)
  • Purchase a vehicle for the beneficiary, often a customized or handicap-accessible van
  • Pay for additions or renovations to the beneficiary’s residence so that it is safe and accessible
  • Professional services for the beneficiary including attorneys and accountants
  • Purchase and care of a service animal for the beneficiary

2 Main Types of Special Needs Trusts

There are 2 main types of Special Needs Trusts: (1) self-settled, and (2) third-party. Third-party Special Needs Trusts are by far the more common.

A Self-Settled Special Needs Trust is funded with the beneficiary’s own assets. Federal law imposes special requirements on these trusts including that it must have a reimbursement / payback provision for Medicaid.

A Third-Party Special Needs Trust is one that is funded with assets not belonging to the beneficiary. It is common for parents to set these up for a child or grandparents for a grandchild. It does not have the reimbursement / payback requirement that a self-settled special needs trust does. The result is that all of the property remaining in a third-party special needs trust at the death of the disabled beneficiary may be distributed as the trust agreement directs.

If A Loved One is Disabled, Ask How a SNT Can Help

Helping preserve assets for the care of disabled child or grandchild is rewarding work. If you have questions about how a Special Needs Trust can benefit you or a loved one who lives in Missouri, please ask. Asking the question and learning about your options to care for a loved one can make a world of difference in the options available to them and how your funds are spent.

Probate Fees in Missouri

When one’s estate passes through probate in Missouri, there are a number of fees that the estate will face. There can be (1) bond premiums, (2) cost of publication in a local newspaper, (3) court costs, and the largest expense (4) attorney fees.

By statute, Missouri law establishes a minimum fee schedule for estates passes through probate. The fees are a percent of the money and personal property in the estate. It can also include any real estate sold during probate.

The minimum attorney fees in Missouri probate are as follows:

Size of Estate Fee
Less than $5,000 5%
$5,001 – $25,000 $250 + 4% of amount over $5,000
$25,000 – $100,000 $1,050 + 3 of estate over $25,000
$100,001 – $400,000 $3,300 + 2 ¾% of estate over $100,000
$400,000 – $1,000,000 $11,550 + 2 ½% of estate over $400,000
Over $1,000,000 $26,550 + 2% of estate over $1,000,000


The statute is 473.153. It can be found here: http://www.moga.mo.gov/mostatutes/stathtml/47300001531.HTML

Plus, the law allows the personal representative to take an amount equal to the attorney’s fee. The result is for an estate of $150,000, one may face $9,350 of expenses. Planning is better!

The Benefits of Beneficiary Deeds in Missouri

One of the most common instruments I prepare for clients is a Beneficiary Deed.

What exactly is a Beneficiary Deed?
A Beneficiary Deed, allows an owner of real estate to execute a deed that names a beneficiary who will own the property after the death of the owner without going through probate.

During the owner’s lifetime, the owner retains full power and control over the property. The Beneficiary Deed must be recorded before the death of the owner to have effect. The property owner can make changes to a Beneficiary Deed at any time by recording a subsequent Beneficiary deed.

For example, John owns a primary residence in Missouri. John wants his son to inherit the residence if he dies. John signs and records a Beneficiary Deed, effective upon his death, naming the son as beneficiary. When John dies, assuming he still owns the home, the son has to only record a death certificate and the property is his. During John’s lifetime, the son has no rights to the property. John may sell the property without permission of his son.

Greystone Ridge prior to development. Cape Girardeau County, Missouri.

Benefits of using Beneficiary Deed:
The primary reason for using a Beneficiary Deed is to avoid Probate after the death of the owner. Probate is a court-supervised process and hence is complex, time consuming and expensive. The Probate process usually takes 6 months and costs much more than executing a Beneficiary Deed.

A Beneficiary Deed allows the owner to retain/enjoy full ownership of the property until death.

Revision or changes to a Beneficiary Deed can be made easily through revocation or subsequent filing.

There is no consideration needed when creating a Beneficiary Deed.

Beneficiary Deeds may reduce future tax burdens by taking advantage of a “step-up” in basis.
Why choose a Beneficiary Deed instead of a Joint Deed?
Some people file a Joint Deed to add heirs to the property. Doing so has a few pitfalls. For Example, Mary owns a property that she bought for $200,000 which is now worth $400,000. Mary adds her daughter on the deed as a joint tenant. Now the daughter owns a portion of the house. Mary can’t sell the property without the daughter’s consent/signature. If Mary had owned the house in her own name and sold the house there would be no income tax. Now since she owns the house jointly with her daughter, the daughter could also be liable to State/Federal taxes. Also if the daughter has any debt/bankruptcy, lawsuits, or judgments against her, the creditor can file a lien or force the sale of the house. This can be avoided by filing a Beneficiary Deed naming the daughter as the Beneficiary. The property transfers to the daughter only upon the death of the mother.
A Beneficiary Deed does not act as a cloud on title when selling the home to a third party.

Missouri is one of a handful of states in the country where a Beneficiary Deed can be executed and it has become an easy and convenient estate planning tool for clients. A beneficiary deed is an easy and cost effective way to avoid probate. So when utilized correctly Beneficiary Deeds offer the owner of real estate one of the easiest, most beneficial ways of transferring property to a specified beneficiary outside of probate or a trust.

In Missouri, a Last Will and Testament Leads to Probate

Often I have clients schedule an initial consultation to discuss having a Last Will and Testament drafted for them. While I am happy to do this for clients, upon further discussion, most clients realize that what they actually want is something different than a Will.

Last Will and Testament image

A Will is great for nominating guardians for minor children. Having a Will is also far better than passing away intestate (that is, without a Will) where default Missouri law controls the management and distribution of your estate rather than it being distributed according to your desires.

Yet, a Will often leads to Probate Court. This is the very thing that most of my clients want to avoid. After all, probate court (1) costs money, (2) consumes your loved one’s time, (3) leaves some decisions up to the local probate judge, and (4) is a matter of public record.

A much better plan is to avoid probate. And in most situations, in Missouri, avoiding probate is not that difficult to do. Clients can avoid probate by using all or some combination of the following:
1. a Revocable Living Trust (RLT) agreement,
2. a Beneficiary Deed for Missouri real estate,
3. a Gift Deed for personal property,
4. Payable on Death provisions for bank accounts,
5. Transfer on Death provisions for vehicles and boats, and
6. Beneficiary Designations for retirement and financial accounts.

Might it cost a little bit of money now to avoid probate later? Probably. Yet, avoiding planning now is being penny wise and pound foolish. One great thing about estate planning is the peace of mind it brings to my clients, that their affairs are in order and their wishes will be carried out.

Missouri CaseNet

We have a public system of justice and Missouri has a great way to allow the public to access most court records: Missouri CaseNet (www.courts.mo.gov). CaseNet is Missouri’s online access to public court records. It is available to anyone seeking information on court cases at those courts that are part of CaseNet.

From an attorney standpoint, I love CaseNet. It allows me to electronically file documents, and to access previously filed documents from any location where I have access to the internet. It is a huge improvement from having to file documents in person or via fax.