One of the most important goals of estate planning is ensuring that your loved ones are cared for after you’re gone. One tool that can help streamline this process is a revocable trust. In many cases, potential clients aren’t aware of the benefits that a revocable trust offers. However, if you use these trusts correctly, they offer one of the best ways to avoid lengthy, expensive probate processes.
What Is a Revocable Trust?
A revocable trust is a legal arrangement where a person, known as the grantor, places their assets into a trust managed by a trustee. The unique feature of a revocable trust is that it can be changed or terminated at any time during the grantor’s lifetime. This flexibility allows the grantor to control the assets and make necessary changes.
The trustee, often the grantor at first, manages the assets within the trust. However, if the grantor becomes incapacitated or dies, a successor trustee or co-trustees will manage or distribute the assets. By creating the terms of your trust, you can outline how to manage the trust and select a successor trustee or co-trustees you can count on.
How Does a Revocable Trust Help Avoid Probate in Missouri?
According to The American College of Trust and Estate Counsel, one of the primary benefits of a revocable trust is its ability to avoid probate. Probate is a legal process after someone passes away, during which their will is validated, and their estate is distributed. This process can be lengthy, expensive and public, which many people wish to avoid. Right now, in the City of St. Louis Circuit Court, full probate estates typically take 12 months or more to process. And in the St. Louis County Circuit Court, full probate estates take anywhere from 6 to 12 months.
By placing assets in a revocable trust, the assets are no longer considered part of the grantor’s estate upon death. The trustee or successor trustee instead directly manages and distributes the assets according to the trust’s terms. This bypasses the probate process entirely, saving time, reducing costs and maintaining privacy for the grantor’s beneficiaries.
What Steps Should You Take to Set Up a Revocable Trust in Missouri?
Setting up a revocable trust in Missouri involves a few key steps:
- Drafting the Trust Document: This legal document outlines the terms of the trust, including who will manage the trust (the trustee) and who will inherit the assets (the beneficiaries).
- Funding the Trust: This step involves transferring ownership of your assets into the trust. For instance, you may retitle your home or bank accounts in the trust’s name. This step is crucial for ensuring that the trust covers the assets and avoids probate.
- Choosing a Successor Trustee: Designate someone, or multiple persons, you trust to manage the trust if you become incapacitated or after you pass away. This person or persons should be responsible and capable of managing financial matters.
- Regularly Review and Update the Trust: Life circumstances change, and so should your trust. Reviewing and updating your trust periodically is important to ensure that it reflects your current wishes and situation.
Avoid Probate and Secure Your Family’s Future
If you want to learn more about how a revocable trust can benefit you and your family, consider booking a call with Formula Law. An experienced St. Louis estate planning attorney can help you understand your options and create a plan tailored to your unique needs. Don’t leave your family’s future to chance—reach out today!
Key Takeaways:
- Avoids Probate: Assets in a revocable trust bypass the lengthy and costly probate process, saving time and money.
- Maintains Privacy: Unlike a will, a revocable trust is a private document that keeps your estate details confidential.
- Provides Flexibility: You can modify or revoke the trust anytime during your lifetime, offering control and adaptability.
- Prepares for Incapacity: Designates a successor trustee to manage your assets if you become incapacitated, avoiding court-appointed guardianship.
- Simplifies Asset Management: Streamlines managing and distributing your assets according to your wishes.
Reference: The American College of Trust and Estate Counsel (ACTEC) (Apr 11, 2019) “How Does a Revocable Trust Avoid Probate?