A comprehensive estate plan includes a will and often various types of trusts. These allow the trust maker to transfer their property to loved ones while protecting the assets from excessive taxes and other transfer fees. Using a trust can also allow your family to avoid the probate process after you pass away, as an experienced attorney could explain. Schedule a consultation with a lawyer to learn about the types of trusts in St. Charles County.
The Primary Types of Trusts in St. Charles County
The type of trust a person sets up will depend on their personal needs and what they wish to accomplish. The most common trust types in St. Charles County include the following.
Revocable Living Trusts
A revocable trust is a living trust, and the legal arrangement gives someone authority to make financial decisions about how the beneficiaries spend or receive the assets. People may set them up to prepare for later in life, to plan for incapacitation, and to retain control of their assets while alive. Another benefit of the revocable trust is that the trust maker can alter, change, or cancel the trust at any time.
Irrevocable trusts hold assets and pass them to beneficiaries according to the trust maker’s wishes. The trust can help reduce estate and transfer taxes. However, the trust maker does not have the option to make changes after they fund the trust.
A charitable trust is a legal document and arrangement people can make to allocate funds they wish to transfer to a charity upon death. The trusts have many potential benefits, such as tax advantages and allowing the trust maker to take regular payments from the trust while they are still alive.
Special Needs Trust
Special needs trusts are legal agreements that allow a trust maker to continue providing financial care to a person with special needs after death. The trust allows the individual to collect the payments without affecting their eligibility for Social Security benefits or other public assistance.
Life Insurance Policy Trusts
Another type of trust in St. Charles County is the life insurance trust. Trusts provide powerful ways to secure the future for families and loved ones. These legal arrangements name trustees and beneficiaries and are often funded by life insurance policies. According to the Missouri Revised Statute § 456.005, the proceeds of a life insurance policy can be made payable to a trust upon the policyholder’s death.
The trust maker can determine whether they want to set up the legal arrangement as an irrevocable life insurance policy trust or a revocable life insurance trust. Both options have their benefits. However, many choose the revocable trust because they can make changes later down the road if they choose to do so. A lawyer in St. Charles County could answer questions and help determine the most effective type of trust for the situation.
Call a St. Charles Attorney to Discuss Types of Trusts
A sound estate plan allows you to preserve and distribute assets to your beneficiaries upon death. While everyone has heard of a Last Will and Testament, a trust can be another beneficial tool in your estate plan.
A thorough estate plan, including trusts, can allow you to transfer assets to your beneficiaries as you wish and help your loved ones avoid disputes after your death. Call a lawyer to discuss the types of trusts in St. Charles County that may fit your needs. If you have questions or want to learn more, contact our firm today.