Types of Trusts in Missouri: Comprehensive Overview
Discover the various types of trusts available in Missouri with Worsham Law Firm. Learn about revocable trusts, irrevocable trusts, special needs trusts, and more to secure your family’s future.
Exploring Missouri’s Trust Options
Trusts are essential to overall estate planning, providing a structured approach to managing and safeguarding assets for the benefit of designated beneficiaries. They offer numerous advantages, such as avoiding probate, reducing estate taxes, and ensuring privacy in the distribution of assets.
Trusts are often tailored to meet specific goals and cater to certain needs, making them a versatile tool for managing wealth and securing financial stability for future generations. Whether it’s a revocable living trust that allows for flexibility and changes during the grantor’s lifetime or an irrevocable trust that offers greater protection from creditors and legal claims, understanding the different types of trusts and their benefits is crucial in creating a comprehensive estate plan.
Worsham Law Firm has extensive experience in estate planning and trust formation, offering clients professional guidance in navigating the complexities of these legal instruments. With a deep understanding of the nuances of trust law, Worsham Law Firm is dedicated to crafting personalized solutions that align with each client’s unique financial goals and family dynamics.

What Is a Trust?
A trust is a legal set-up where one person, also called the grantor or settlor, transfers ownership of assets to another person or entity, called the trustee. The trustee entrusted with managing these assets in the interest of another person or group of persons called beneficiaries.
At its core, a trust separates the rights of control and ownership. The grantor no longer owns the assets directly but retains some level of control, depending on the type of trust.
Trusts can hold a wide range of property and assets, including real estate, stocks, and personal property. This versatile tool is a cornerstone of estate planning.
A trust document outlines the terms of the trust. It specifies the roles of the trustee and the beneficiary, the rules for managing the trust property, and the conditions under which the trust can be modified. A trust document also names a successor trustee, i.e., the person authorized to take over from the trustee if they die or become unable to carry out their duty.
Benefits of Creating a Trust
Creating a trust offers several benefits for managing and distributing your assets. One of the primary advantages of a trust is the avoidance of probate. By using a trust, your assets can be transferred directly to your beneficiaries, bypassing the lengthy and sometimes costly probate process.
Trusts also provide privacy and protection. Unlike wills, which become public records, trusts remain private, ensuring your financial matters aren’t disclosed. Additionally, certain trusts, such as irrevocable trusts, can protect your assets from legal claims and creditors.
A trust can significantly benefit beneficiaries, including minor children. Trusts can be structured to provide for the ongoing needs of minors until they reach a specified age, ensuring their financial security.
Finally, if a trust is set up right, it can help get some of your income excluded when being considered for eligibility for certain benefits, such as MO HealthNet in Missouri.

Revocable Trusts
Revocable trusts are also called revocable living trusts. They offer significant flexibility. They allow the grantor to modify, amend, or even revoke the trust entirely during their lifetime. This contrasts with irrevocable trusts, which cannot be changed once established.
A revocable living trust provides flexibility. It allows you to remain in control of your assets during your lifetime and make changes as needed. This type of trust can be beneficial for managing assets if you become incapacitated, as it can incorporate a power of attorney. It ensures a seamless change in asset management without the need for court intervention, unlike wills that require probate.
One standout feature is the ability to retain control over trust assets. The grantor typically remains the primary trustee, maintaining control over investments and distributions. This level of control is invaluable for ongoing financial management.
Despite these benefits, revocable trusts do not avoid estate taxes. When the grantor dies, assets within the trust are still included in their taxable estate. Consequently, additional estate planning strategies may be needed to reduce tax liabilities.

Irrevocable Trusts
Irrevocable trusts are potent tools for asset protection and estate tax planning. These trusts, once established, cannot be altered or terminated without the consent of the beneficiaries. This ensures stability and protection. An irrevocable trust established in your lifetime is called an irrevocable living trust. However, one established by your will after your death is an irrevocable testamentary trust.
Advantages:
- Asset Protection: Assets within the trust are shielded from creditors.
- Estate Tax Benefits: Reduces the taxable estate, potentially lowering estate taxes.
- Medicaid Eligibility: Properly structured, they can help qualify for Medicaid without depleting resources.
Considerations:
- Inflexibility: Transferred assets cannot be easily reclaimed.
- Loss of Control: The grantor relinquishes control over the assets once placed in the trust.

Irrevocable trusts are beneficial in situations involving significant assets, complex family dynamics, or specific estate planning goals. They ensure that heirs benefit from well-protected, tax-optimized estates.
Special Needs Trusts
Special Needs Trusts (SNTs) are vital for families planning for loved ones with disabilities. These trusts help manage assets and ensure beneficiaries qualify for public benefits.
One of the key benefits of SNTs is that they safeguard eligibility for benefits like Supplemental Security Income (SSI) and Medicaid. Without a properly structured trust, disabled individuals risk losing these essential supports.
Types of SNTs:
- First-Party SNTs: Funded with the beneficiary’s own assets, often from personal injury settlements or inheritances.
- Third-Party SNTs: Funded by family members or others, used primarily for future planning.
- Pooled Trusts: These are managed by nonprofit organizations, pooling funds from multiple beneficiaries.
Trustees play a crucial role in managing and disbursing funds according to the trust’s terms. This ensures the beneficiary’s needs are met without jeopardizing public benefits.
Key Considerations:
- Trustee Selection: It is vital to choose a person or body that is reliable and knowledgeable to manage the trust.
- Compliance: It is essential to work with an experienced estate planning attorney so that the trust complies with federal and Missouri state laws.
- Flexibility: The trust should be structured in a way that is adaptable to changing needs and circumstances.
Charitable Trusts
Charitable trusts provide a structured way for donors to support their favorite charitable organizations while managing their assets efficiently. RSMo §456.4-405 allows for the creation of charitable trusts for:
- relief of poverty
- advancement of education or religion
- the promotion of health
- governmental or municipal purposes
- Other purposes, the achievement of which is beneficial to the community.
Two primary types of charitable trusts are commonly used in Missouri – Charitable Remainder Trusts (CRTs) and Charitable Lead Trusts (CLTs).
CRTs allow donors to transfer assets into a trust, with the income generated benefiting the donor or another non-charitable beneficiary. Upon the end of the trust term, the remaining assets go to the chosen charity.
CLTs flip this arrangement. The charity receives income from the trust during its term, and once the term concludes, the remaining assets return to the donor’s beneficiaries.
Benefits of setting up charitable trusts include potential tax deductions and the fulfillment of philanthropic goals. For instance, a Father and Son who wish to secure lifetime income while supporting a Missouri charity might find a CRT suitable. Charitable trusts can be an effective part of estate planning and asset management for those with a philanthropic vision.

Spendthrift Trusts
A spendthrift trust is a unique type of trust designed to protect a beneficiary from creditors and their own potential spending habits. In Missouri, these trusts are particularly effective in ensuring that the assets within the trust remain secure.
A spendthrift provision in the trust explicitly limits the beneficiary’s ability to transfer or assign their interest in the trust. This means that creditors cannot legally access the trust assets, which provides financial protection to the beneficiary.
Moreover, the grantor can set specific terms under which the beneficiary can access the trust funds. These terms can detail how and when distributions are made, thus giving the grantor significant control.
Common use cases for spendthrift trusts include:
- Beneficiaries who are minors or young adults.
- Individuals with a history of financial mismanagement.
- Those with substance abuse issues.
- Beneficiaries facing potential divorce or legal issues.

Asset Protection Trusts
Asset Protection Trusts (APTs) are specialized irrevocable trusts designed to safeguard assets from creditors. These trusts can play a critical role in financial planning for individuals seeking to minimize risk.
APTs separate ownership and control of assets from the settlor, making it challenging for creditors to claim these assets. This protection is vital for high-net-worth individuals or those in professions with high litigation risk.
In Missouri, establishing an APT involves appointing a trustee who manages the assets for the benefit of designated beneficiaries. The irrevocable nature of the trust means that once assets are placed into the trust, the settlor relinquishes control, enhancing asset security.
Key Benefits:
- Creditor Protection: Assets within the APT are generally shielded from future creditors.
- Estate Planning: APTs can help reduce estate taxes and preserve wealth for beneficiaries.
- Flexibility: Despite being irrevocable, many APTs offer some flexibility in asset management.
Considerations:
- Legal Advice: It’s essential to consult with a legal professional to navigate Missouri’s specific regulations.
- Permanent Transfer: Assets transferred to an APT cannot be easily reclaimed.
- Costs: Setting up and maintaining an APT can be costly and complex.
Asset Protection Trusts need careful planning and professional guidance to ensure compliance and effectiveness in asset shielding. As a premier tool, they provide robust security for assets while aiding in comprehensive estate planning.
Qualified Terminable Interest Property (QTIP) Trusts
A Qualified Terminable Interest Property (QTIP) Trust is a helpful tool in estate planning. This special type of trust helps to ensure that your assets are handled according to your wishes after you pass away, especially when you want to take care of your spouse but also want to control where the assets go after your spouse’s death.
The way it works is that you, first of all, set up a QTIP trust as part of your will or estate plan. Then, you place some of your assets into this trust. When you pass away, the assets in the QTIP trust are used to provide income (like interest or dividends) to your surviving spouse for the rest of their life. Your spouse can benefit from the trust’s income but usually can’t access the principal amount (the original assets put into the trust).
After your spouse passes away, the remaining assets in the trust are distributed to the beneficiaries you specified when you created the trust. This means you get to control where your assets ultimately go, even after your spouse is gone. A QTIP trust is especially useful if you have a blended family and want to provide for your current partner while also providing an inheritance for your children or other relatives from a previous marriage or relationship.
QTIP trusts draw upon the marital deduction, which shields the trust’s assets from federal estate taxes at the passing of the first spouse. Estate tax efficiencies make it an attractive choice for married couples.
Moreover, QTIP trusts allow the grantor to decide the timing and distribution of the remaining assets. This ensures that the surviving spouse is supported without compromising the long-term goals for the inheritance.
Key Benefits:
- Ensures spouse’s financial support
- Defers estate taxes until the surviving spouse’s death
- Gives the grantor control over the ultimate asset distribution

Testamentary Trusts
A testamentary trust is created through a will. This type of trust comes into effect after the death of the grantor.
One primary advantage is the control it offers over the distribution of assets. The settlor can specify precisely how and when beneficiaries receive trust property. For example, real estate and funds can be managed for minor children until they reach a certain age.
One major downside, however, is that probate is still necessary, as the trust must be established through the will. This means assets pass through the probate process before funding the trust.
Choose the Right Trust for Your Needs in Missouri with Worsham Law Firm
Selecting the right type of trust in Missouri involves considering your personal estate planning goals and asset protection needs. Consulting with knowledgeable attorneys and financial advisors is crucial for tailoring a trust to your specific needs and staying compliant with Missouri law.
From avoiding probate to minimizing estate taxes, each trust type offers distinct advantages. At Worsham Law Firm, we are here to help you navigate these choices and create a trust that best fits your circumstances. We can also help you draft other applicable estate planning documents for a more comprehensive estate plan. Book a consultation with us today, and let us get you started on the right path to creating your trust.

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