Wills and Trusts

Choosing the right estate planning documents depends on your specific needs and goals. This section clarifies the distinctions between Wills and Trusts in Missouri.

Last Will and Testament

In Missouri, your Last Will and Testament must be probated within one year of your death to be effective. Many people are unaware of this and may mistakenly believe that having a Will avoids probate, which is the opposite of what actually happens.

• Court Approval Required: A Last Will and Testament in Missouri requires probate court approval to be valid. Probate is a legal process that can take time and incur expenses.
• Limited Distribution Options: Wills offer a less flexible approach to distributing assets. They typically distribute everything at once, which may not be ideal for minor beneficiaries or complex situations.
• Does Not Avoid Probate: Having a Will alone does not bypass probate. If there is anything in your sole name without a named beneficiary, then upon your death the Will must go through probate.

Trusts

Trusts are frequently discussed as important tools for estate planning. There are various types of trusts used for different purposes, but the most well-known and widely used by the average client is the standard Revocable Living Trust.

• Avoids Probate: Assets held within a trust avoid probate, saving time and money during the estate settlement process. It is important to ensure that your assets are owned by your trust or that your trust is listed as the named beneficiary upon death in order for all of your assets to completely avoid probate.
• Flexible Distribution Options: Trusts allow for more intricate distribution plans. You can specify how and when beneficiaries receive assets, such as spreading out payments over time or holding funds for a minor’s future needs.
• Requires Asset Titling: To ensure all assets avoid probate, they must be titled in the trust’s name or list the trust as the beneficiary upon your death.
• Pour-Over Will Recommended: A “pour-over Will” is recommended alongside a trust, which is a Will leaving everything to your trust upon your death. This type of Will ensures any assets not properly titled in the trust are transferred to the trust after your death.

Do You Have to Give Your Financial Institution a Copy of Your Trust?

When you name a trust as the owner or beneficiary upon death on any account at a financial institution, they will ask you for a copy of your trust. You can choose not to give them the full trust document, but you still need to provide the main terms of the trust by giving them a Certification of Trust. This document must meet the requirements set forth in Section 456.10-1013 of the Revised Statutes of the State of Missouri. An attorney can help you create a proper Certification of Trust.

How to Avoid Probate

Probate can be expensive and time-consuming. There are several ways to avoid probate.

• Trusts are an effective way to avoid probate. Since a trust is managed outside of the court, it does not require the opening of a probate estate. 
• Non-probate transfers and proper titling of assets. These transfers can be achieved by naming beneficiaries to automatically receive an asset upon death. It usually involves naming a transfer on death (TOD) or pay on death (POD) beneficiary on the title or ownership of the asset.
• A beneficiary deed can be used for real estate, which is a special type of deed only effective upon the death of the owner of the property. 
• Joint ownership. If a financial asset is jointly owned, the surviving owner will automatically become the sole owner upon the other owner’s death. Real estate requires specific language added to the deed stating that there is a right of survivorship between the joint owners.

Trusts provide flexibility as they allow for multiple contingency plans in case beneficiaries pass away before the owner, enable distributions of money over time, and allow for leaving money for the benefit of minors. 

However, if you don’t need any complicated distribution plans, traditional naming of beneficiaries and ownership techniques may be enough to meet your goals.
Important Note: Regardless of your chosen method, it’s essential to have a Last Will and Testament as a backup plan. This ensures any unforeseen assets are addressed after your death.