Our Business and Estate Planning FAQs

In 2018, each person can make a tax free gift of $15,000.00 in value per donee.  Accordingly, a husband and wife could gift $30,000 to each of their children as a tax free gift in 2018.  As a reminder, if you make a gift by check, the check needs to be deposited and cleared prior to the end of the year. 

How to Avoid Probate

Wills or Revocable Living Trusts

In simplest terms, Wills require probate, whereas revocable living trusts—when properly funded— avoid the probate process. Wills can be robust documents containing tax saving and asset protection strategies. However, wills memorialize the testator’s instructions for distributing assets at death only. Wills—absent the availability of a summary/small estate affidavit—require probate.

Revocable living trusts, on the other hand, become effective immediately upon creation and are vehicles for the management of assets of the trust creator (also called the settlor or grantor) during his or her lifetime, including during periods of incapacity and at death. Revocable living trusts also make it easier to distribute assets without court involvement at death. A trust can avoid probate when it owns all of the decedent’s assets or is otherwise the recipient of the assets upon his or her death using other probate-avoidance tools such as those discussed below. 

When a decedent's trust does not own all, or become the recipient of, a Grantor’s assets at his or her assets at death, pour-over will is used to funnel any probate assets into the trust. Pour-over wills should be intended as a backup strategy.

Learn more about Revocable Living Trusts by downloading our Free Report, "Understanding the Basics of Revocable Living Trusts in Missouri."

 

Probate, also called estate administration, is the judicial process by which a decedent’s assets (his or her estate) are distributed to his or her heirs or other devisees. Probate codes and procedures can vary from state-to-state.

If a decedent had a will, he or she is deemed to have died “testate,” and the will governs

the distribution of his or her assets. If a decedent did not have a will, he or she died “intestate,” and the decedent’s state’s laws of intestacy will determine who will get his or her assets.

NO!  In Missouri, if you are sued, your child's college account (also known as a 529 plan) can be taken! 

BACKGROUND:

College savings plans pursuant to Section 529 of the Internal Revenue Code (“529 Plans”) can be a valuable vehicle to invest money for the higher education expenses of a child (or other beneficiary).  529 plans are designed to encourage savings for the college or post-graduate education of younger generations. Contributions to a 529 account grow income tax-deferred and distributions for specified higher education expenses are free from federal income tax.  

One of the many benefits of a 529 college savings plan is that the account owner will retain control over the account, including the unilateral right to take back the contributions to the account or to change the designated beneficiary to another family member at any time.  In addition, the beneficiary of the account (i.e. a child or grandchild) usually does not have the right to access the money in the 529 account.  Because the 529 account is an asset of the account owner, a 529 account is subject to the claims of creditors of account holders who are residents of the State of Missouri regardless of whether the 529 account is established through the State of Missouri or another state. 

MISSOURI RESIDENTS-CREDITORS CAN INVADE THESE ACCOUNTS!  Unlike qualified retirement plans (401(k) plans), IRA and Roth IRA’s which offer certain protections pursuant to the Missouri homestead statutes, there is no protection afforded to 529 accounts from creditor claims of the account owner.  Accordingly, if the account owner is faced with a judgment, the creditor has the ability to attach the 529 account to satisfy their judgment, a result which could be devastating to you and your loved ones.  Federal law provides some protection for Missouri residents who are owners of 529 accounts if the account owner is in bankruptcy.  Absent a bankruptcy, Missouri residents who are owners of 529 accounts (whether such accounts are MOST accounts or another states college savings plan) are exposed to losing their 529 accounts to a judgment creditor!

INTRODUCING THE 529 EDUCATIONAL SAVINGS TRUST:  Missouri’s 529 college savings plan (MOST) (as well as most other state college savings plans) allow a trust to be the owner of a 529 college savings plan.  The combination of a 529 college savings plan and a specially designed 529 Educational Trust can provide divorce and creditor protections and allow the client to retain the ability to use the funds in a financial emergency.  In addition, the client can move the asset between siblings (or other family members) to meet the client’s planning objectives.   College savings plans are touted, often appropriately, for their tax deferral and other benefits of saving for college costs.  However, it is important to sit down with your estate planning attorney to make sure that the ownership of these plans correctly carries out your planning objectives.  If you are concerned about asset protection, estate taxes, control and other issues then you should consider a 529 Educational Savings Trust.

Call us today at 314 966-7766 to learn more about our 529 Educational Savings Trust.

In Missouri, if you become disabled and lose the capacity to deal with your finances yourself, someone will have to establish a conservatorship over your finances. Doing so is expensive. If you have prepared a revocable trust or a durable power of attorney, a conservatorship is not needed and the person you have designated will handle your finances.

Can’t my spouse just take over my financial matters? Your spouse is able to manage joint accounts only. He or she cannot sign on your behalf for financial accounts under your name alone unless you have prepared a revocable trust or a durable power of attorney naming your spouse as the person who will handle your personal financial matters.

When applying for Medicaid in Missouri, the state will “look back” to see if any gifts have been made in the past five years.  Missouri will not just let you give away your property or your money to qualify for Medicaid.  Any gifts or transfers for less than fair market value that are made during the “5 year look back” period may cause a delay in Medicaid eligibility.

 

Yes. If you have children, you are not required to leave them any portion of your estate. A common misunderstanding is that you must leave each child at least one dollar. Today, your Will may simply state, “I have intentionally failed to provide for my son, Josh.”

The Kaiser Law Firm handles the following types of cases:

• Estate Planning: Wills & Living Trusts
• Real Estate Transactions
• Family-Owned Businesses & Farms
• Powers of Attorney & Living Wills
• IRA & Retirement Planning
• Asset Protection & Business Planning
• Special Needs Planning
• Trust Administration & Probate

 

YES.  You will need to hire an attorney to assist you in the probate process if the probate estate is over $40,000.  The probate estate consists of assets that a decedent owned in his or her own individual name and which do not pass by a valid beneficiary designation. 

No. This is a very common misconception. There are several reasons to have a revocable trust. However, asset protection planning and nursing home protection are not reasons to have a revocable trust. Under federal Medicaid law and under most states laws, your revocable trust is considered your asset and must be "spent down" before you qualify for long term care in a nursing home. Also, because your revocable trust is your asset, it can also be reached by your creditors if you get sued.

If you want to learn more about asset protection in Missouri, download a free copy of our report, 10 Questions You Should Ask About Protecting Your Assets in Missouri. 

Missouri law permits the formation of a limited liability company (LLC) that may then establish one or more series.

Missouri law provides that an individual series is not liable for the debts or obligations of any other series of the LLC.