A Missouri resident who creates a trust is referred to as the settlor. This person will both create the legal entity and put assets into it. Once the trust has been created and funded, the settlor doesn’t have to do anything else. However, this person may also be the trustee as well as one of the trust’s beneficiaries.
The settlor generally has the ability to make changes to a revocable trust at any time, but there may be limits to that power. For instance, a secondary trustee would take authority over the trust in the event that the settlor becomes mentally incapacitated or other stipulations have been met. The settlor can terminate a revocable trust and take back all of the assets that the trust still owns.
If an irrevocable trust is created, the settlor cannot change its terms. Instead, the trust’s language will be strictly followed by the trustee, but the settlor may retain influence as the trustee will want to honor the settlor’s wishes as closely as possible. Such a trust will generally be established for somebody else’s benefit.
Trusts can serve many estate planning purposes and can be tailored to meet the goals of the settlor. One advantage of a trust is that its assets avoid the lengthy, expensive and public probate process when the settlor dies. An estate planning attorney can also point out that another feature of a trust that a will does not have is that the distributions to a beneficiary can be scheduled to occur upon the occurrence of specific milestones rather than in a lump sum. This can be attractive to a settlor who is concerned that a certain beneficiary would be profligate with the proceeds.
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