There are many types of trusts, including the following: revocable living trusts, irrevocable trusts, testamentary trusts, and special needs trusts.
Trusts can be simple or complex, as they serve a variety of legal, personal, investment, and tax planning purposes. 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. Often, 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, settlor, grantor or trustor) and name themselves the current trustees (trust managers) who manage the trust assets for their own initial, exclusive benefit (trust beneficiary).
One advantage of establishing a trust is 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 may also result in tax advantages, both for the trust-maker and the beneficiary. They may also 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 incapacitated or disabled. If well-drafted, another advantage of trusts is their continuing effectiveness, even if the trust-maker dies or becomes incapacitated.
A power of attorney is a legal document giving another person (the attorney-in-fact) certain legal rights (powers) to control the property of another (the grantor of the power). The powers depend on the established terms of the document. A power of attorney may either be broad or limited and specific. All powers of attorney terminate upon the death of the maker. When the intent is to designate a backup decision-maker in the event of incapacity, then a durable power of attorney should be used, either alone or in conjunction with a revocable living trust. A durable power of attorney, by its express terms, can empower the attorney-in-fact immediately upon its execution, or delay its effectiveness until such time as a designated event (i.e. substantial disability) springs its effectiveness. Durable powers of attorney should frequently be updated because banks and other financial institutions may hesitate to honor a power of attorney that is more than a year old.
An advance directive is a document that specifies the type of medical and personal care you would want, should you lose the ability to make and communicate your own decisions. It commonly provides direction to medical care practitioners as to the treatment course to take at the end of life. Anyone over the age of 18 may execute an advance directive, and this document is legally binding in Missouri. A Healthcare Power of Attorney specifies who will make and communicate medical care decisions for you, including the ability to direct withholding and/or withdrawal of medical care at the end of life—for example, if you were in a coma with no reasonable chance of recovery.
A document that goes hand-in-hand with your advance directive is a HIPAA authorization that allows your medical providers to communicate details of your medical condition and course of treatment specified individuals. Without this authorization, your doctor may refuse to communicate with your hand-picked decision maker.
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There are many legal strategies involved in estate planning, including wills, revocable living trusts, irrevocable trusts, durable powers of attorney, and health care documents. New clients often say that they do not have an estate plan, and they are surprised to learn that their estate will be distributed after death according to Missouri's laws of intestacy. The intestacy code is not a plan voluntarily chosen by many, especially those survived by family. Most are relieved to learn that a properly drafted estate plan will replace the terms of the State’s estate plan with your own.
A Last Will and Testament is one part of a comprehensive estate plan. If you pass without a will and have assets titled in your sole name, you are said to have died "intestate." State laws will then determine how and to whom your assets will be distributed, oftentimes in ways and to persons you never intended.
However, there are some things you should know about wills:
Joseph serves individuals, families, and business owners throughout Missouri, but particularly within St. Louis, St. Louis County, St. Charles County, and Jefferson County.
Joseph R. Burcke, L.L.C. is a full-service estate planning law firm that focuses on fundamental estate planning. Our areas of expertise include:
It is in your best interest to plan your estate to resolve your concerns and to avoid the probate process for both guardianship and decedent estate administration. Joseph R. Burcke, L.L.C. welcomes you to his professional family of well-informed and satisfied clients. We provide personalized service and dedicate ourselves to protecting your interests, along with developing wills, trusts and estate plans that exceed your expectations.
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