Mason & Helmers
We Welcome Your Call
  • Phone 651-323-2548
  • Toll Free 877-389-5533

Misperceptions about trusts


There are many misperceptions surrounding trusts and trust administration. For Minnesota residents, these may lead to difficulties and even later trust litigation.

In addition to the falsehood that trusts reduce taxes, trusts do not automatically provide protection against creditors. This is especially true for the living trust or revocable trust. These trusts provide the greatest flexibility and ability for modification or revocation. However, this control over assets makes these trusts vulnerable to creditors.

These trusts are commonly confused with spendthrift trusts, which are shielded from a beneficiary's creditors but not from the trust grantor's creditors. Creditors cannot attach the grantees' share of these trusts before it is distributed to them. However, these trusts are not protected from the grantor's creditors.

Another common misunderstanding is that trusts always avoid probate. Assets in the trust when the grantor dies avoid probate. However, assets that are not contained in the trust when the grantor dies still require probate if they are not titled in the grantor's name.

More specifically, bank and stock accounts, real property and mineral assets and other similar assets will not avoid probate as they are "titled accounts" unless a person specifically includes them in the trust, although it may be possible to transfer these accounts by holding them jointly or by designated them as "payable on death". .

Additionally, many estates still require probate although most of that person's assets were properly placed into the trust. This usually occurs because the grantor does not remember to transfer all their titled assets into the trust.

Protecting assets does not require everyone to transfer them into trusts, however. Persons with smaller estates may transfer their assets or use special types of ownership including joint accounts with survivorship or payable on death accounts. These POD trusts automatically transfer assets to other individuals when the grantor dies.

A lawyer can help create trusts and provide other advice that help protect an inheritance. This estate planning can help avoid disputes and other litigation.

Source: Pauls Valley Daily Democrat, "Misunderstandings about trusts," March 15, 2017

No Comments

Leave a comment
Comment Information

For Assistance with Estate Disputes & Other Matters, Contact Us

To learn more about the firm and how we can assist you,
contact Mason & Helmers in St. Paul, Minnesota. Call 651-323-2548 or 877-389-5533 (toll free) to set up an appointment.

*AV®, AV Preeminent®, Martindale-Hubbell Distinguished and Martindale-Hubbell Notable are certification marks used under license in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell® is the facilitator of a peer review
rating process. Ratings reflect the anonymous opinions of members of the bar and the judiciary. Martindale-Hubbell® Peer Review Ratings™ fall into two categories — legal ability and general ethical standards.

Contact Our Attorneys

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Email Us For A Response
Mason & Helmers

Mason & Helmers
332 Minnesota Street
Suite W-3070
St. Paul, MN 55101

Toll Free: 877-389-5533
Phone: 651-323-2548
St. Paul Law Office Map