Frequently Asked Questions
about Estate Planning in Missouri

What is Probate?

Probate is the court process that looks after people who cannot make their own personal, healthcare and financial decisions. These people fall into three general categories: minor children (under age 18 in most states); Incapacitated adults; and people who have died without legal arrangements to avoid probate. Probate proceedings can be expensive and time-consuming. Additionally, the court proceeding and associated documents are all a matter of public record. Many people choose to avoid probate in order to save money, spare their heirs a legal hassle, and keep their personal affairs private.

What is Joint Tenancy with Rights of Survivorship?
(in some states “Tenancy by the Entirety” when between spouses)

This is the most common form of asset ownership between spouses. Joint tenancy (or TBE) has the advantage of avoiding probate at the death of the first spouse. However, the surviving spouse should not add the names of other relatives to his or her assets. Doing so may subject the assets to loss through the debts, bankruptcies, divorces and/or lawsuits of any additional joint owner. Joint tenancy ownership also may result in unnecessary death taxes and capital gains taxes on the estate of a married couple.

What is a Will?

The last will and testament is the document a person signs to provide for the orderly disposition of assets after death. Wills do not cause assets to avoid probate. Wills have no legal authority until the will-maker dies and the original will is delivered to the Probate Court. Still, everyone with minor children needs a will. It is the only way to nominate the new “parent” of an orphaned child. Special testamentary trust provisions in a will can provide for the management and distribution of assets for your heirs, though a trust created during your lifetime is often preferred. Additionally, assets can be arranged and coordinated with provisions of the testamentary trusts to avoid death taxes.

What is a Living Will?

Sometimes called an Advance Medical Directive, a living will allows you to state your wishes in advance regarding what types of medical life support measures you prefer to have, or have withheld/withdrawn if you are in a terminal condition (without reasonable hope of recovery) and cannot express your wishes yourself. Oftentimes, a living will is executed along with a Durable Power of Attorney for Healthcare, which gives someone legal authority to make your healthcare decisions when you are unable to do so yourself.

What does Intestacy mean?

If you die without a Will (intestate), the legislature of your state has already determined who will inherit your assets ,and when they will inherit them. You may not agree with their plan, but roughly 70 percent of Americans currently use this impersonal planning method.

What are Beneficiary Designations?

You may avoid probate on the transfer of some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate (non-probate transfer laws) vary from state to state. Some common examples of such beneficiary designations include life insurance death beneficiaries; POD/TOD designations on investment accounts, bank accounts, and vehicles; and beneficiary deeds.

What is a Durable Power of Attorney and when do I need one?

A Durable Power of Attorney allows you to appoint someone you know and trust to make your personal healthcare or financial decisions when you are unable. If you are incapacitated without these legal documents, then your family will be forced to petition the probate court to name someone as a guardian and conservator. This is the court proceeding where a judge determines who should make these decisions for you and requires that person remain under the ongoing supervision of the court. Naming a power of attorney agent keeps you in control, even when you can no longer manage your own financial or healthcare decisions, by allowing you to choose who you want to serve in that role.

What is a Revocable Living Trust?

This is an agreement with three parties: the Trust-Makers, the Trustees (or Trust Managers), and the Trust Beneficiaries. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further “back-up” managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the trust-maker’s death. With proper planning, the couple also can avoid or eliminate death taxes on their estate. The Revocable Living Trust may allow them to accomplish all this outside of any court proceeding.

Who Should Have a Revocable Living Trust?

Whether you are young or old, rich or poor, married or single, if you own titled assets such as a house and want your loved ones to avoid court interference at your death or incapacity, consider a revocable living trust. A trust allows you to bring all of your assets together under one plan. Additionally, parents of minor children (those under 18 years of age) should consider the benefits of having a trust in place to ensure their beneficiaries will receive their inheritance at an appropriate time rather than automatically gaining full access and control at the age of 18.