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Will and Trust Preparation
The preparation of a Will, which is really a set of instructions to one's Personal Representative detailing how an individual wants his or here estate to be managed and ultimately distributed, requires a comprehensive knowledge of the Missouri Probate Code. A property drafted will can do much to avoid family confrontations and the need for a will contest. Parents with minor children need to make sure that they appoint a guardian for the child or children in the event both parents die. Once the will has been prepared and signed in accordance with Missouri law it can only be formally amended by the preparation of and signing of a Codicil or an entirely new Will. Clients are always instructed never to write anything on the original Will document as this could have serious legal consequences. When a person dies, the Last Will is filed with the Probate Court and the individual's estate is administered and ultimately distributed pursuant to the terms of Missouri Law and the directions contained in the Will itself. Once the Will has been administered and the estate assets distributed the Will has served its function and has no further legal effect. A will governs property that is held in an individual name and has no effect over beneficiary designations, property held jointly with one or more persons or property held in a trust.
A trust, as juxtaposed to a Will, is a legal instrument which can be created within a Will or as a separate instrument. Its primary purpose is to manage an individual's assets while he or she is alive and also after death. While the administration of an estate in probate will end within a specified time, a Trust can continue for the benefit of an individual's beneficiaries over many, many years. Assets that are in a trust which is created during an individual's life can be distributed without the necessity for a probate proceeding, thus saving considerable time, money and public exposure.
Probate Administration
Probate administration begins when a person dies and his will is filed in probate court with an application requesting the will be admitted to probate and that the person designated in the will as personal representative be appointed by the Court. Under Missouri law, a decedent's estate must be opened within one year after the person dies. If this is not done (and often a will might not be discovered for years) then the alternative procedure is a procedure called determination of heirship. A probate estate must remain open for at least six months and ten days, but normally the average estate remains open considerably longer, especially if it is large and requires the filing of a federal estate tax return. Claims against a deceased person?s estate must be filed, generally within six months from the date of first publication of Notice that an estate has been opened. In Missouri, the administration can be accomplished independently or under Court supervision. Both the attorney and the personal representative are entitled to compensation based on the value of the personal property of the decedent and the proceeds of the sale of any real estate the decedent owned during his or her life.
Will and Trust Controversies
Will and trust controversies involve law suits in which the validity of a will or trust is challenged, usually b y a disappointed family member. While there are numerous grounds for such suits, such as forgery, fraud, mistake or improper execution, the most common grounds are the testator's incapacity (mentally not capable of understanding what he or she is signing) and undue influence (the particular will was procured by someone in a position of trust - to the decedent - and controlled the decedent to such an extent that the will is really a document containing the wishes of the influencer rather than the testator). There is a very short statute of limitations within which a will contest must be filed. This is usually six months after the date the estate was opened. There is no specific trust contest statute in Missouri so the rules are pretty much the same as the rules for contesting a will.
Guardianships
In the case of a minor child (one under the age of eighteen years), his or her guardians are the parents. If a child has no parents living, the court must appoint a guardian to make decision for that child. If a young man or woman has special needs and lacks the ability to take care of himself or herself in whole or in part, a guardian must be appointed. Missouri's guardianship laws direct the courts to grant only such authority to the guardian as is necessary under the circumstances and to allow an individual the maximum amount of freedom in conducting his or her affairs as he or she is legally capable of. Ascertaining that degree is often the subject of controversy between the individual and someone who believes that individual needs total control.
Conservatorships
In Missouri, a conservator is what was formally called "guardian of the estate." If an individual or a minor has assets in excess of a very minimal amount, the court will require, in addition to a guardian of the person, the appointment of a conservator to manage the incapacitated or minor person's assets subject to court supervision. Annual accountings to the court are required. If it is possible to establish a trust for that person, this is a far more flexible way in which to manage the incapacitated or disabled person's financial needs.
Federal Estate, Gift and Generation Skipping Transfer Tax Planning
There are three federal transfer taxes: Federal Estate Tax, Federal Gift Tax and Federal Generation Skipping Transfer Tax. These are excise taxes on the right to transfer property to another either during life or at death. In 2001, Congress passed and the President signed what is now known as The Economic Growth and Tax Relief Reconciliation Act of 2001. What the Act purports to do is repeal the estate tax and generation skipping transfer taxes over a period between 2001 and 2010. In actuality the taxes are repealed only with respect to the estates of decedents dying in the year 2010. After that, unless Congress does something to make the repeal permanent, those taxes return to their levels in 2001. This year and in 2006, each person has an exemption of $1,500,000. In 2007 and 2008, the exemption rises to $2,000,000 and in 2009 to $3,500,000. There is one such exemption that applies to the estate tax and one to the generation skipping transfer tax. The gift tax was not repealed and each person has a lifetime exemption from that tax of $1,000,000. Transfers between spouses are tax-free. These taxes can be minimized, and, in some cases eliminated through proper use of trusts. Because the law is in an uncertain state because Congress cannot agree on the repeal issue, planning in this area becomes tricky and fraught with hidden snares, traps and pitfalls. The planning issue is exacerbated by the fact that many clients' wealth is amassed in various qualified retirement plans such as IRAs, 401(k) plans and pension plans. The rules regarding the taxation of distributions from these plans are complex and require specialized attention.
Estate Planning for Non-Traditional Families
Society and its rules are changing rapidly. Increasingly the issue of relationships between persons of the same sex has become the topic of much heated debate in all fifty states and in the United States government. Non-traditional families also include partners of the opposite sex who cannot marry without loss of certain hard earned benefits. Many of the benefits and exemptions which apply to persons in traditional married relationships do not apply to those in the non-traditional category because thirty-nine of the fifty states have enacted what are called defense of marriage acts, meaning that a marriage is a legal relationship only between a man and a woman. This may well eliminate those who believe they are in common law marriages because they have lived together for a long period of time. Missouri does not recognize common law marriages and is one of the states that has enacted a defense of marriage act. Special planning is necessary for these people and an understanding of the legal issues involved is critical and complex. For instance, the simple creation of a joint tenancy could result in a taxable gift for the non-traditional couple where the same result would not obtain in a traditional marriage.
Determination of Heirship Proceedings
In Missouri, a probate estate MUST BE OPENED WITHIN ONE YEAR OF A PERSON'S DEATH. If it is not, and assets are discovered, regardless of what type of assets, a determination of heirship proceeding may have to be commenced to assure that persons entitled to those assets actually get them.
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