When you create your estate plan you will likely use additional estate planning tools and strategies beyond just a basic Last Will and Testament. Deciding which additional tools and strategies are right for your plan is something you should only do with the assistance of your Missouri estate planning attorney. Learning more about the various options, however, is something you can do all by yourself. For example, a revocable family trust is a popular estate planning tool that you might consider including in your comprehensive plan. Of course, you need to know how a revocable family trust would fit into your estate plan before deciding whether or not to include one.
What Is a Trust?
A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. The beneficiaries of a trust may be individuals, entities, or even family pets. A trust may also have both current and future beneficiaries.
Testamentary vs. Living Trusts
All trusts are fist divided into two general categories – testamentary and inter vivos (living) trusts. A testamentary trust is a trust that does not actually take effect until your death. Parents of minor children, for example, might create a testamentary trust to hold assets for their children if in the event they die while the child is still a minor. Because the trust is not needed otherwise there is no reason for the trust to take effect during the parent’s lifetime. A testamentary trust is always a revocable trust because it does not take effect until your death. Just like your Will, it can be changed or revoked up to the time of your death. Living trusts, as the name implies, are trust that do take effect during the lifetime of the Settlor of the trust. A living trust can be either revocable or irrevocable. Revocable simply means that the Settlor is able to modify or even revoke the trust at any time and for any reason whereas an irrevocable trust cannot be modified or revoked by the Settlor for any reason once the trust becomes active.
How Might You Use a Revocable Family Trust?
A revocable family trust can be used to accomplish more than one estate planning goal. As a “family trust” it can be used to protect, and even grow, the assets you intend to keep within your family. The terms of the trust can also be used to distribute assets to future generations at appropriate times instead of in lump sums. Those same terms can be used to guide and direct future generations by only allowing the trust assets to be used for specific purposes, such as education. The same revocable family trust can also serve as an excellent incapacity planning tool. When you create the trust you can name yourself as the Trustee of the trust and then name a spouse or other family member as the successor Trustee. As the primary Trustee, you will continue to control the trust assets as long as you are able to do so. If, however, you ever become incapacitated, the successor Trustee you appointed will take over as Trustee automatically, without the need for court intervention or approval. The family assets held in the trust, therefore, remain in the family and under the control of a family member chosen by you ahead of time.
If you are unsure whether or not a revocable family trust would be a positive addition to your overall estate plan, take the time to discuss your options with your Missouri estate planning attorney.
If you have additional questions or concerns regarding a revocable family trust, or about estate planning in general, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.