Missouri residents may be familiar with trusts, which have been in the news recently due to the deaths of Joan Rivers and Robin Williams. While popular with wealthy individuals, persons of more modest means may also find it advantageous to set up a trust as part of their estate plan.
Placing assets in trusts does more than enable beneficiaries to avoid costly probate, and naming a family member as administrator may provide additional cost savings. Certain types of trusts allow an individual to designate how and when the assets will be distributed. The owner of the trust may wish to retain control and access the trust until such time that it may be necessary for an administrator to take over because of incapacitation. It is also possible that a trustee may administer the funds if the owner becomes ill.
Some individuals believe that setting up a trust is difficult, since it involves altering the designation of asset ownership from the name of the owner into the trust. However, there are ways to simplify the process. Assets may be designated as payable or transferable to the trust upon death. This may be used to fund a trust without making immediate changes. These designations are not subject to probate and avoid delays, while assets not assigned to a trust may have to go through the probate process.
Trusts may be used to provide significant reduction of estate taxes and ensure secure provisions for the future of the family, including minor children and disabled dependents. An attorney experienced in trusts may structure a document to provide for future needs and distribution of assets as a useful addition to a will.
Source: Daily Finance, “3 Myths About Trusts That You Can’t Afford to Believe”, Dan Caplinger, September 20, 2014