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BTC Bank

Guide to Trust and Estate Planning in Missouri

Whether or not we want to face it, it’s important to create a plan for what will happen at the end of our life. The assets we own, the dependents we care for, and even the healthcare decisions we may face should all be part of this plan. Having an estate plan takes the stress and financial burden off those that we leave behind. Choose to protect the legacy you’ve built with a thoughtfully designed estate plan from BTC Bank. The following trust and estate planning tips will help you decide if an estate plan is right for you.

What is an Estate Plan?

An estate plan is a comprehensive plan for your health and finances. It can include a will, health care power of attorney, financial power of attorney, and trusts. An estate plan clearly defines what will happen to your assets, how your end of life care will be handled, and who will be in charge of making decisions if you are incapacitated.

Who Needs an Estate Plan?

While the term “estate” may sound fancy, the truth is that everyone can benefit from an estate plan regardless of wealth. An estate plan simply communicates your wishes for end-of-life decisions in a clear, legally-binding document. Decisions about your health care, long term care, finances, and children shouldn’t be ambiguous. By clearly stating your wishes, you will save your surviving loved ones the stress and burden of trying to decide what you would have wanted.

Do I Need a Lawyer?

Crafting an estate plan is a complicated, detailed process that requires the knowledge of legal framework and local estate rules. While an attorney is not necessary, we recommend consulting with a local expert to make sure all your wishes are covered and legally provided for. BTC’s Trust Department offers Missouri estate planning help designed to meet the needs of the communities we serve. We’ll make sure your estate plan is comprehensive and uniquely tailored to suit your family’s situation.

What is a Power of Attorney?

When you grant someone the power of attorney (POA) you give them the ability to legally make decisions on your behalf. When it comes to planning your estate, there are two types of POA’s to consider. A medical power of attorney grants someone you trust the authority to make decisions about the health care you do (or do not) receive. A financial power of attorney grants someone you trust the power to make decisions regarding your assets and investments.

These are important roles, and you should choose someone whose judgement you trust. If you were to become incapacitated, having a POA in place can be crucial. Power of attorney’s allow decisions to be made on your behalf and can be necessary to carry out your wishes when you can’t communicate.

Is a Will Enough?

A will is a document that states your desires. While it takes the guesswork out of allocating your assets, a will does not legally transfer them to another name. Assets that are mentioned in a will have to go through probate in order to be legally transferred to another person. The probate process is time consuming and can cost 3-8% of your estate. Although a will is a good place to start, having a trust may be a better option for your family.

The Difference Between a Will and a Trust

A will states your desires, and a trust is a legal arrangement to redistribute your assets. By creating a trust before you pass away, you start the process of giving away your assets. The trust holds the assets of your choosing and distributes them according to your wishes. Taking this action before your death can eliminate taxes on these assets and lower your overall taxable estate. There are two main types of trust:

Revocable Trust: You can change your mind or reassign assets in a revocable trust.

Irrevocable Trust: Once you assign assets to an irrevocable trust, they no longer belong to you.

There are many subcategories of trusts, each with their own tax benefits. Creating a trust ensures a smooth transition of assets and avoids the time and expense of probate court. A knowledgeable BTC trust advisor can help you find the right trust for your needs.

Estate Laws in Missouri

When you die without having a will in place, it’s called dying “intestate”. When this happens, the state decides how to distribute your estate. Missouri’s intestacy laws include an inheritance hierarchy that divides specific portions of your estate amongst living relatives. In order to avoid having the government decide where your assets go, start creating your estate plan today.

Missouri does not have an estate or inheritance tax, but your assets could be subject to taxes from another state or federal taxes upon your death. The trust advisors at BTC Bank can help you navigate local Missouri laws to make sure you leave a legacy that avoids excessive government fees and taxes.

How to Create an Estate Plan

When you’re ready to start your estate plan, an advisor will guide you through some basic steps. You’ll need to identify your assets, determine your beneficiaries, sign your plan, and securely store your documents. An estate plan is not a static document. Don’t forget to update your assets and beneficiaries should they change over time.

Identifying Your Assets

Assets are things you own of value. Examples include: cash, investments, businesses, real estate, retirement accounts, pensions, life insurance policies, and personal property such as cars, boats, and antiques. You can find asset identification forms online to help you get started.

Determining Your Beneficiaries

Beneficiaries are the individuals who will receive your assets. They could inherit all or a portion of your estate depending on your wishes. Typically beneficiaries are immediate family members or close relatives and friends. When you create a trust you can specify not only your beneficiary but also a specific use for the asset, such as money for a grandchild to use towards college tuition.

Signing Your Trust Documents

Signing rules vary by state, so you’ll want to follow the recommendations of an estate planning expert. Typically a will requires the signature of two witnesses, and a trust must be signed in the presence of a notary public.

Storing Your Documents Safely

Your estate plan is an important set of documents, but you don’t want to hide it away. If something happens to you, you’ll want your family to find and execute your estate plan. A personal safe is a good choice as long as a trusted person has a copy of the key and the safe has a three-hour fire rating.  Most inexpensive safes found at big box stores do not meet this rating.  If you plan on storing your trust documents in a safe deposit box, make sure to have at least one of the successor Trustees named on the box and have them sign into the box at least once.  By having this individual authorized to access the box and having them access it, you will avoid the necessity of a court order to access safe deposit boxes after the owner has passed away. Copies of your plan can be distributed to appropriate family members to ensure there are no doubts regarding your wishes.

Plan for Peace of Mind

It’s a good feeling knowing that your affairs are in order. BTC is now providing top quality trust administration from experienced financial advisors. We are proud to offer Estate & Trust Administration Services, Investment Portfolio Management, and a variety of other trust services at each of our locations across Missouri & Iowa.

Trust services are available at all 13 locations across Missouri in Albany, Bethany, Smithton, Boonville, Buffalo, Carrollton, Chillicothe, Gallatin, Maysville, Osborn, Pattonsburg, Trenton,  and in Lamoni, Iowa.  Call to schedule an appointment or to talk with our Trust Department at 1-877-BTC-BANK. When you need help setting up a trust, BTC Bank is your community partner.

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