During the lifetime of a settlor (i.e., trust-maker), the property of a revocable trust is subject to claims of the settlor’s creditors. Section 456.5-505.1, RSMo. Upon the settlor’s death, most revocable trusts are structured to where the trustee may pay the settlor’s last debts and expenses. Because these expenses can arise down the road and…
Legal Articles
Trust Settlor
A “settlor” — previously and sometimes referred to as a “grantor” or “trustor” — is a person who creates a trust. Most trusts are revocable living trusts in which the settlor, during his, her or their lifetime, serve as trustee and principal beneficiary. Even when the settlor is living and not serving as trustee, the…
Trust Reformation, Mistake
Reformation is usually used in the context of a contract between two parties to correct a mistake and reform the contract to meet the parties’ intentions. It is, in other words, a court ordering a quasi re-writing, amendment and/or modification of a contract or written instrument. By way of example, reformation of a contract based…
Trust Protector: Powers, Duties, Limitations
An increasingly common technique used in trusts is to designate a trust protector. A trust protector is different than the settlor, trustee and beneficiary. Because the trust protector concept is relatively new, there has been uncertainty regarding the trust protector’s authority in trust administration, litigation and breach of trust suits. To address this uncertainty, Missouri…
Trust Fraud Challenge
Lack of testamentary capacity and undue influence are the two most common bases for challenging the validity of a revocable living trust. Though rare, however, it is possible to challenge a trust based on fraud. A trust is void to the extents its creation was induced by fraud, duress or undue influence. Section 456.4-406 RSMo….
Exceptions to Trust Spendthrift Clauses
A spendthrift provision in a trust generally prohibts a creditor from trying to collect a debt of a beneficiary by seizing the beneficiary’s interest in a trust to satisfy the debt. These types of clauses are commonly included in trusts because the trust-creator (i.e., “settlor”) wants the trust money and assets to be used for…
Ambiguous Trusts, Parol Evidence
In interpreting trust documents, you are generally restricted to reviewing only the language and terms of the trust. Indeed, “[a]bsent any ambiguity in the terms of the trust, the intent of the [trust-maker] must be determined from the four corners of the instrument without resort to parol evidence as to the intention.” Kempton v. Dugan, 224…
Modification of Irrevocable Trusts in Missouri
The Missouri Uniform Trust Code set forth a number of procedures by which interested parties in an irrevocable trust can request that the Court modify its provisions. A trust typically becomes irrevocable after the settlor/trust-creator dies or becomes incapacitated. Circumstances change and things unforeseen by the settlor will often arise. To that end, Missouri sets forth…
Trustee Removal Lawsuits, Litigation
If you are unhappy with a trustee, can you remove the trustee? The answer to that question is “yes,” but there needs to be a specific legal basis for it. You will not prevail on a trustee removal case in court simply because you do not like the trustee(s). Section 456.7-706, RSMo governs trustee removal in…