Death is certain. Missouri law governs estate planning, which is a category that covers many different methods of ensuring that your assets are distributed in accordance with your wishes at death. A detailed estate plan will also accurately communicate your wishes to family members in case of your death, or of a mental or physical incapacity that prohibits you from making decisions. Under Missouri law, there are both probate and non-probate transfers available to transfer your assets to your beneficiaries.
The estate planning lawyers of Kennedy, Kennedy, Robbins & Yarbro, LC, can help you through the process of drafting appropriate estate planning documents. The process will include meeting with your attorney to discuss and accurately inventory your assets; making plans for distribution of assets and plans for medical treatment.
Estate planning is not only for the wealthy. All of your assets are included in your estate at death, unless transferred by a non-probate transfer such as a beneficiary deed, transfer on death (TOD) designation or pay on death (POD) designation. The total dollar value of your assets can be quite large, when you include your home, investments, retirement savings, and life insurance policies you own, in addition to vehicles, personal property items and family heirlooms.
The most simple estate plan is a will. A will directs the transfer of your assets after death. Statistics show that roughly half of all Americans die without having made a will. If you die without a will, your assets will be transferred pursuant to Missouri’s intestacy statute, which provides a “default” will. The probate court will transfer your assets to your heirs in set percentages, which may or may not be as you wish. If you have no heirs and die without a will, your assets may escheat to the state of Missouri. A will becomes important if you have small children because it gives you the opportunity to designate a guardian to provide for the care of your minor children.
At your death, a will is probated. Probate is a legal term, which means to “prove” a will. During probate, the court determines if your will is in conformity with Missouri law, and if so, then directs that your assets be transferred in accordance with your directions. Depending upon the size of your estate, probate may take anywhere from 30 days to more than a year. Estate planning can help stream line or avoid probate.
Your will is handled through probate by a personal representative. The personal representative should be someone you trust. Most people choose their spouse, an adult child, a relative, or a friend. In some cases, a bank, trust company or attorney may be selected.
A second common estate planning tool is a revocable living trust. A trust directs how property is to be managed and distributed during your lifetime and upon death. The individual who makes the trust is called the Grantor. More than one person can be the grantors of a trust, such as a husband and wife who jointly create a family trust. The person who holds the assets in the trust is called the Trustee. The grantor often serves as trustee during his or her lifetime. The person or persons who will receive the assets at the death of the grantor is called the Beneficiary.
A trust is ordinarily revocable at any time during the grantor’s lifetime. This allows the grantor to take into account any change of circumstances such as marriage, divorce, death, disability or to reconsider beneficiaries. Upon the death of the grantor, the trust cannot be changed.
The assets of a revocable living trust are not probated. The distribution of assets is thus a private matter between the trustee and the beneficiaries, and no public record is made. Property can often be distributed to the beneficiaries quickly, unlike a normal probate. Also, probate court approval is not necessary to sell an asset in a trust, thus avoiding further delay.
Another estate planning tool is the power of attorney. A power of attorney allows you (called the principal) to appoint someone else (called the agent or attorney-in-fact) to act on your behalf. There are three different types of powers of attorney:
1. A limited power of attorney gives the agent whatever powers the principal chooses for a specific period of time (e.g.,30 days) beginning when it is signed.
2. A durable power of attorney stays in effect for the principal’s lifetime – beginning when it is signed.
3. A springing power of attorney is triggered by a specific event, such as when the principal becomes incapacitated.
Signing a power of attorney does not prevent you from handling your affairs. You are only allowing someone else to act on your behalf if the conditions of the instrument are met. A power of attorney may be revoked at anytime. All powers of attorney automatically end at the principal’s death. After the principal’s death, the agent no longer has power to act and the affairs are handled by the personal representative of the principal’s will or by the trustee of the principal’s trust. Like a personal representative, your agent should be someone you trust.
A power of attorney may also direct your medical care. You may direct your agent to make medical decisions for you, including the right to specify the provision of medical care or the withdrawal of medical care.
Estate planning is never complete. You should regularly review your estate planning with your attorney as your needs change.
If you need legal assistance, or for further information about an estate planning need, please contact us or call Kennedy, Kennedy, Robbins & Yarbro, LC, at (573) 686-2459. Our commitment is to earn your confidence by answering all questions and providing quality representation.