Simple Suggestions on Missouri Estate Planning
Despite the fact that better than forty percent of our population is over the age of forty, many of us neglect to do any advance planning for incapacity or death. Missouri has enacted many changes in the law over the last thirty (30) years making it easier for people to plan for incapacity and/or death. Many of these changes include avoiding “probate”-that dreaded and archaic method of distributing one’s estate.
While there is no “one size fits all” method to health care and estate planning, consider the following…
Everybody dies with an estate. The focus of many people is the reduction (or elimination) of their estate that goes through probate. Non-probate transfers allow an efficient and economical alternative to probate.
Missouri has very favorable non-probate transfer laws. These laws allow the owner(s) of an asset to retain all title/ownership and control of that asset during their life while allowing for the distribution of the property (outside of the probate estate) upon their death.
The most commonly used methods of these non-probate transfers:
Transfer on Death (TOD) and Payable on Death (POD) designations
Assets which have a title or accounts may be transferred pursuant to a “transfer on death” or “payable on death” designation. By designating a beneficiary on the title or on the account, that person (or people) will receive the asset upon the death of the owner of the account or asset. Probate is avoided, thereby saving time and expense for the beneficiary. Your bank, the administrator of your account, or the local Department of Revenue License Office (in the case of a car, boat, etc. title) can assist you with this process. Additionally, other tangible personal property may be conveyed by a “deed of gift” that expressly states the transfer is not to take effect until the death of the owner. A conveyance by “deed of gift” requires execution by the owner(s) and before a Notary Public.
An owner of real estate may execute a beneficiary deed to transfer real estate to a beneficiary upon the death of the owner (or last surviving owner). The beneficiary deed must be recorded with the Recorder of Deeds in the county where the real estate is located to take effect. The beneficiary does not gain ownership interest in the property while the owner is still alive. Furthermore, the owner may revoke the beneficiary deed, pledge the property as collateral, transfer the property and otherwise treat the property as they theirs in all respects. With a beneficiary deed recorded your designee takes title (and ownership) immediately upon your passing, thereby avoiding the probating of that real estate.
Durable Power of Attorney
Missouri’s law on durable power of attorneys is set forth in Chapter 404 of the Missouri Revised Statutes. A durable power of attorney delegates the authority to an attorney in fact to make non-health care decisions (primarily financial decisions) in the event the person is unable to handle their own affairs. By executing a durable power of attorney a guardianship/conservatorship proceeding may be avoided if one later becomes incapacitated.. In the event a person does not have a durable power of attorney and becomes incapacitated a guardian/conservator may need to be appointed by the Court to make the same decisions that could be made if a durable power of attorney had been executed. Such Court proceedings will result in additional expenses and the possibility that someone the incapacitated person may not have chosen being selected to serve in some official capacity.
Durable Power of Attorney for Health Care
The Durable Power of Attorney for Health Care Act is also set forth in Chapter 404 of the Missouri Revised Statutes. This document provides for the delegation of the responsibility for making health care decisions to an attorney in fact once you become incapacitated. Such a document will also allow you to express your wishes with regard to life prolonging medical decisions. The execution of the Durable Power of Attorney for Health Care will also help avoid the necessity for the appointment of a guardian or conservator.
The more traditional method of distributing assets is through the execution of a will or trust. It is recommended that even if a person avails themselves of the non-probate transfer laws that a will should be executed in the event that an asset is not provided for by non-probate transfer. Furthermore, depending on a person’s unique situation they may want to consider the creation of a trust to protect their assets and/or provide for the distribution of their assets upon death.
Every individual’s needs with regard to a will or a trust are unique. It is recommended that each individual should consult with an attorney so that an estate plan can be tailored to those specific needs.
The choice of a lawyer is an important decision that should not be based solely on advertising.