Most people include more than just a Last Will and Testament in their estate plan. After a Will, which serves as the cornerstone of any comprehensive estate plan, trusts are among the most common addition to a plan. A trust can be a testamentary trust or a living trust. Understanding more about a living trust in St Louis Missouri may help you decide to include one (or more) in your estate plan.
A testamentary trust is one that does not take effect until your death. An inter vivos trust, or living trust, becomes effective when all the elements of creation are present and the trust is funded. A living trust can accomplish numerous goals and offers a wide variety of benefits to an estate plan. Consider some of the most common types of living trusts and what they can do for an estate plan:
- Special needs trust – this living trust allows you to provide financial assistance to a special needs loved one without that assistance causing your loved one to be disqualified for much needed assistance from federal and state assistance programs such as Medicaid and SSI.
- Asset protection trust – this type of trust can protect your assets from creditors or can protect assets from a beneficiary who might not manage those assets well. It can also be used to protect assets if the need arises down the road to qualify for Medicaid benefits.
- Revocable trust for incapacity – an incapacity plan can definitely benefit from a living trust. The way this one works is that you create a living trust and appoint yourself as the trustee. You then appoint a spouse/adult child/parent as the successor trustee. After that you transfer important assets into the trust such as your home and cash. If you suddenly become incapacitated the successor trustee takes over automatically. By doing this, you give your spouse/adult child/parent immediate access to and control over important assets should you become incapacitated, thereby eliminating the need to petition a court for control and access to those assets.
If properly drafted a living trust in St Louis Missouri can also provide your estate with tax benefits as well as probate avoidance. If your living trust is an irrevocable living trust, for example, all assets you transfer into the trust become estate property, meaning you no longer own the asset. This, in turn, means your estate will not have to pay estate taxes on the value of the asset when you die. Furthermore, assets held in a trust are not included in the probate of your estate, saving your estate both time and money when the time comes.