Bolinger Law Firm, LLC – St. Louis Trust Attorney

A trust is one of the most effective estate planning tools because it provides unparalleled flexibility and control over the disposition of your assets. Additionally, trusts avoid the probate process, provide asset protection and are highly effective at minimizing estate taxes. Trusts come in many different varieties, including revocable, irrevocable, and trusts providing for pets or individuals with special needs. At Bolinger Law Firm, LLC, an estate planning attorney will disclose to you all of the relevant considerations and develop a trust that accomplishes your wishes.

In a trust agreement, there are typically three different parties to the agreement: the Grantor, the Trustee and the Beneficiary. The first party to the trust agreement is the called Grantor, also sometimes referred to as the Settlor, Trustmaker, Trustor or Donor. The Grantor is the creator of the trust and is usually the one who contributes assets to the trust. The Grantor can be an individual or it can be multiple individuals, such as a husband and a wife. Additionally, the Grantor dictates the terms, beneficiaries and distribution patterns of the trust agreement. The second party to the trust agreement is the Trustee. The Trustee holds title to the trust assets and administers those assets according to the terms of the agreement specified by the Grantor. The Trustee owes certain fiduciary duties to the beneficiaries of the trust agreement, including the duty of loyalty and the duty of care. The third party to the trust agreement is the Beneficiary. The Beneficiary of the trust is the party that receives the trust assets through various forms of distributions. The Grantor may place restrictions on when the Beneficiary may receive distributions of the trust assets, including age and educational restrictions.

The most commonly utilized trust instrument is a Revocable Living Trust. A Revocable Living Trust is a trust created by the Grantor during his/her lifetime where the Grantor also serves as the Trustee, therefore controlling the management and distributions of the trust assets during his/her life. Thus, the Grantor maintains the same rights and control over the trust assets as a sole owner enjoys. In the trust agreement, the Grantor names a successor Trustee that, upon the Grantor’s death or incapacity, carries out the trust affairs in accordance with the terms proscribed within the trust agreement. As the name indicates, a Revocable Living Trust is revocable during the lifetime of the Grantor, but typically becomes irrevocable upon the Grantor’s death. A Revocable Living Trust is a great estate planning tool because it provides unparalleled control over the disposition of your assets, avoids the probate process and protects you during your incapacity. Call us today at (636) 386-8322 to speak with a St. Louis estate planning attorney or schedule an appointment.

Frequently Asked Questions

If I have a Revocable Living Trust, do I still need a will?

Yes, you still need a will called a “pour-over will.” A pour-over will acts as a safety net and captures all of the excess property that is improperly titled or without a valid beneficiary. Thus, at the Grantor’s death, the pour-over will captures the excess property that is not properly titled in the name of the trust and transfers the property to the Grantor’s trust. Although a pour-over will requires a probate proceeding, it is less expensive and time-consuming because most of the assets should pass outside of the probate process if properly planned.

What are the different kinds of trusts?

There are many different types of trusts utilized to achieve various objectives. For example, irrevocable life insurance trusts provide for beneficiaries without the proceeds of the insurance policy being included in the decedent’s gross estate. A special needs trust ensures that property transferred to a special needs beneficiary does not disqualify that individual from governmental assistance. Additionally, a pet trust provides for the care of pets after your death. Furthermore, charitable trusts allow you to provide for charities and causes dear to your heart. Trust agreements allow you to accomplish various objectives while also ensuring support for loved ones and virtuous causes.

Who administers the Trust?

The Trustee is the individual(s) or corporation in charge of administering the trust assets in accordance with the terms of the trust agreement. The Trustee owes certain duties to the beneficiaries of the trust. When establishing a trust, it is important to go over the trust document with the Trustee to explain and resolve any issues prior to their occurrence.

Who should be trustee or successor trustee?

It is a challenge determining an appropriate person to manage your trust assets. Depending on the type of trust, you can nominate yourself or another individual(s)/corporation. When making this determination, it is important to nominate a Trustee that is trustworthy, organized, business savvy and dependable. A Trustee must understand the trust agreement and act according to the powers granted within the agreement. Additionally, it is important to consider the potential trustee’s age, abilities, personal attributes and business acumen.

In a Revocable Living Trust agreement, the Grantor is typically the Trustee. This allows you to maintain control over your affairs while living. Upon your death, the trust agreement will name a successor trustee that administers the trust pursuant to the terms proscribed in the trust agreement.

What is” funding” a Trust?

“Funding” a trust is the process of placing the legal title of assets in the name of the trust. Failing to fund the trust properly leaves the trust without any property and strips the trust agreement of its essential purposes. Once a trust is established, it is imperative that any asset subsequently acquired designates the trust as the legal title-holder. In the event that property is not properly placed in the name of the trust, the pour over will captures this excess property and transfers the assets into the trust at your death. As previously noted, a pour-over will does not avoid probate so this property is subject to probate fees. Therefore, it is critical to correctly title and transfer property into the trust to ensure proper administration of the trust and the maximum reduction in probate fees.