Trusts come in many “flavors,” they can be simple or complex, and serve a variety of legal, personal, investment or tax planning purposes. A Revocable Living Trust (RLT) is an estate planning option that allows you to transfer ownership of your assets to a trust and keep your affairs private. Different trusts complement your life and family needs. A Revocable Living Trusts means that the Grantor (you) may change the trust term or terminate the trust during your life time. It is a flexible estate planning document. In Missouri, the Revocable Living Trust may also be called a Qualified Spousal Trust.
At the most basic level, a trust is a legal entity with at least three parties involved: the trust-maker, the trustee (trust manager), and the trust beneficiary. Oftentimes, all three parties are represented by one person or a married couple. In the case of a revocable living trust, for example, a person may create a trust (the trust-maker) and name themselves the current trustees (trust managers) who manage the trust assets for their own benefit (trust beneficiary).
Depending on the situation, there may be many advantages to establishing a trust, including avoiding probate court. In most cases, assets owned in a revocable living trust will pass to the trust beneficiaries (or heirs) immediately upon the death of the trust-maker(s) with no probate required.
Certain trusts also may result in tax advantages both for the trust-maker and the beneficiary. Or they may be used to protect property from creditors, or simply to provide for someone else to manage and invest property for the trust-maker(s) and the named beneficiaries. If well drafted, another advantage of trusts is their continuing effectiveness even if the trust-maker dies or becomes incapacitated.
Reach out to Your Estate Ally attorneys to find out if you and your family could benefit from establishing a trust.
