Revocable Living Trusts in Kansas and Missouri

If you have started thinking about estate planning, you have probably heard the term “living trust.” A revocable living trust can be a useful tool, but it is not the right fit for everyone. Here is a simple look at how these trusts work in Kansas and Missouri and what to consider before setting one up.

What a Revocable Trust Actually Does

A revocable living trust is a legal agreement you create during your lifetime. You transfer assets into the trust, name yourself as trustee while you are living, and name a successor trustee to take over if you become incapacitated or when you pass away. Because you keep the right to change or cancel the trust at any time, it offers flexibility that other planning tools do not.

The main appeal is avoiding probate. When assets are properly titled in the name of your trust, those assets pass to your beneficiaries without going through the court-supervised probate process. That can save your family time, expense, and paperwork. A properly funded trust also allows your successor trustee to step in and manage your finances if you become incapacitated, which can help your family avoid the need for a court-appointed conservatorship.

Who Should Consider One

A simple will may be enough for a younger person with few assets, no minor children, and accounts that already pass by beneficiary designation. A trust-based plan tends to make more sense for people who:

• Own real estate or other assets that would otherwise require probate.
• Want to plan ahead for the possibility of incapacity.
• Value keeping their financial affairs private.
• Have minor children or financially immature beneficiaries who should not receive an inheritance outright.

State-specific Considerations

Both states have adopted their own versions of the Uniform Trust Code, and the rules are similar in most respects:

Funding is not required at signing. Neither state requires you to put money or property into the trust the moment you sign it. Many trusts simply recite a nominal amount, often ten dollars, with the actual funding occurring later as you retitle assets.

Surviving spouse rights. In both states, a surviving spouse can claim a share of the deceased spouse’s estate even if assets were moved into a revocable trust. Kansas calculates this elective share based on the length of the marriage, up to 50% of the augmented estate. Missouri sets the share at one-third of the estate if there are living descendants, or one-half if there are none. A trust cannot be used to disinherit a spouse without a valid waiver.

Creditors during life. In both states, your creditors can reach trust assets during your lifetime to the same extent they could reach assets held in your own name. A revocable trust is not an asset-protection tool while you are living.

Tenancy by the entirety in Missouri. Missouri married couples who own property jointly as tenants by the entirety should be especially careful. Moving that property into a trust can break the special creditor protection that comes with entirety ownership, unless the trust is specifically structured as a qualified spousal trust under Missouri law.

Privacy. In both states, probate records are generally open to the public, while trust administration typically is not. If keeping your financial affairs private is important to you, that is a real advantage of the trust-based approach.

Is a Revocable Living Trust Right for You?

A revocable living trust can be a great planning tool, particularly if you own real estate, want to plan for incapacity, or simply want your family to avoid the probate process. But a trust is not a one-size-fits-all solution, and getting the details right makes a difference in whether the plan will work as intended.

If you are weighing whether a will or a trust-based plan makes more sense for your situation, our estate planning team would be glad to talk through the options with you.