Estate Planning Resources

The following descriptions are general in nature regarding estate planning, probate, trusts, powers of attorney, living wills and certain information pertaining to the current state of estate tax. No attempt is made to give specific legal advice and an attorney should be consulted before making decisions regarding any matter pertaining to the topics presented:

Probate

The Probate Court process is required to determine who owns the assets of a deceased person (Decedent), regardless of whether a person dies with or without a Will, IF an asset:

    • Is held just in the deceased person’s name without a beneficiary designation.
    • Is not held jointly with right of survivorship with any other person.
    • Is not subject to a beneficiary designation, e.g. life insurance, securities.
    • Is not held in a Living, Revocable, or Irrevocable Trust.

A probate estate must basically be kept open for a minimum of 6 months and 10 days and often 12 months after it is officially opened.

It is generally much better to go through the Probate process with a Will than without a Will.  For example, without a Will, a beneficiary under 18 will receive his entire inheritance upon attaining age 18.

Wills

Wills do NOT avoid probate.

  • Wills affect any asset in a person’s name which is not held jointly in a Trust, or is not designated to go by a transfer of death (TOD), or payable on death (POD) or by other beneficiary designations.
  • Wills can appoint the Personal Representative (Executor/Executrix) who is in charge of gathering your assets, paying your final bills, and distributing your assets according to your wishes, under the purview of the Probate Division (Court).  One has a choice in a Will of electing independent or supervised administration.
  • Wills can designate the Guardian for children under 18. The Guardian is in charge of the children’s physical well-being and the children will usually live with him or her.
  • Wills can designate the Trustee for funds one elects not to distribute to a beneficiary immediately on one’s death.
  • Wills must be probated which will cause attorneys fees and court costs to be incurred.
  • Missouri Statutes adopted by the Legislature calculate the minimum Probate fees to the attorney. The Missouri Statutes set the minimum attorney’s fee for probating an estate between 2% and 5%. The attorney’s fee per statute, for a $100,000 estate is $3300. The attorney’s fee on a $1,000,000 estate is $26,500.
  • Wills must be probated in the County in which the Decedent resided and a Probate proceeding must occur in any County and State in which real estate was owned.

Should a person rely on a “legal form”? Legal forms cannot substitute for the advice and counsel of an experienced attorney who has the ability to pose questions and propose solutions pertaining to a particular situation.

Living Trusts

  • Trusts avoid probate.
  • In nearly every case, the use of a Trust will avoid the delay caused by probate and will save the family of the deceased money which would have otherwise been spent on attorney’s fees and court costs.
  • Names Trustee to manage assets in the event of incompetence unlike a Will (instead of a Court-appointed Conservator).
  • Can accomplish estate tax planning to avoid estate tax without probate. Can ensure that assets remain under someone’s control for the benefit of your child or other beneficiaries for a specified period of time after your death.
  • Can protect assets in a second marriage without Probate.
  • Can now easily protect assets of husband and wife through a Qualified Spousal Trust.
  • Decrease likelihood of the Court’s appointing a Conservator in case of incompetence. 
  • Are almost always far, far less expensive to administer than a Will because the assets in the Living Trust avoid probate.
  • Usually distribute the assets to family members or other beneficiaries much more quickly than a probate estate.
  • Do not require ongoing fees.
  • Do not make you see your attorney more often.
  • Can allow for detailed custom planning particularly if you become incompetent.

Powers of Attorney

A Financial Power of Attorney: Definitely decreases and probably eliminates the risk of having a Court-appointed Conservator which is expensive for family, requires annual accountings, can cause severe family emotional upset, and requires the alleged incompetent to be served legal papers by the County Sheriff in almost all cases.

Financial Powers of Attorney appoint one or more persons to handle the following for you in addition to items not listed:

  • Sign contracts
  • Conduct banking transactions
  • Open and close accounts
  • Sign deeds
  • Sell your house
  • Sue in your name
  • Handle many other financial transactions
  • Deal with Medicare and Insurance Companies
  • Speak with attorneys
  • Handle affairs outside your Trust which you could handle if you were competent

You may tailor your Financial Power of Attorney to:

  • be valid only in the event if you become incompetent or if you are missing or held hostage (called a “Springing Durable Power of Attorney”). It “springs” into effect upon these events.
  • be valid now and if you are incompetent, or in the event you are missing or held hostage (Durable Power of Attorney). Does not “spring into effect”.
  • contain other customized provisions which should be discussed with an

Healthcare Powers of Attorney

Upon attainment of age 18, no one can make health care decisions for you without special provisions in place.

A Healthcare Power of Attorney appoints someone to carry out your intent regarding healthcare decisions in the event you are unable to do so. If you expressed your intent in a Living Will, the person appointed (Attorney-in-Fact) should make the best decision possible under the circumstances specified in your Living Will or the given circumstances.
You should provide your Attorney-in-Fact with a copy of your Living Will.

Provisions can also be made regarding body part donations, burial, cremation, HIPAA consents, living arrangements and other matters.

Living Wills — Missouri Basics

A Living Will is a statement of your intent regarding healthcare in the event you become incapable of expressing your desires.  [Share copies of your Living Will with your family and the Attorney in Fact named in your Healthcare Power of Attorney.]

Under Missouri Law, the Living Will statute speaks of your condition as being “terminal” and your death not being prolonged by procedures that merely prolong the “dying process”.  No mention is made of feeding or hydration tubes.  However, you may add special provisions to your Living Will regarding these and other procedures.

Under the statutes, a “terminal condition” is an incurable or irreversible condition which, in the opinion of the attending MD, is such that death will occur within a short time regardless of the application of medical procedures.  “Death-prolonging procedure” is a medical procedure or intervention which would serve only to prolong artificially the dying process and death will occur within a short time whether or not procedure or intervention is utilized.

Federal Tax Law

  • Current Estate Tax Exemption — $5.43 million; can leverage to $10.86 million
  • “Permanent Portability – is anything “permanent in tax law? – current limit $5.43 ($10.86 million per couple)
  • Unified Estate/Gift Tax Law – $5.43 million
  • Gift tax Exclusion 2015 – $14,000
  • Do we still need two trusts: the “credit shelter” and “marital” or QTIP”?  Still provide many advantages.
  • Protection against future
  • Take advantage of portability
  • Second marriage
  • Customized planning

A partial walk down memory lane just for your pleasure.

Year Estate Tax Exemption
1997  $600,000
2002  $1,000,000
2004  $1,500,000
2008  $2,000,000
2009  $3,500,000
2010  unlimited
2011  $5,000,000
2014  $5,340,000
2015  $5,430,000

 

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You can download a copy of this resource for your own records. This should not be considered legal advice. Everyone’s situation is different and should consult an attorney for accurate, specific legal guidance.