How Can a Trust Help Minimize Estate Taxes in Missouri?
If one of your goals for planning your estate is to minimize taxes, a trust can be a useful tool. Putting your assets into a trust can be an effective way to reduce certain federal tax obligations. This is especially true for high-net-worth individuals in Missouri. Learn all the ways a trust can reduce your estate tax liability by discussing your situation in detail with an estate tax planning lawyer in St. Louis.
What Do Trusts Offer By Way of Estate Tax Protection in Missouri?
Although Missouri does not have a state estate tax, federal taxes will apply to certain estates. These taxes apply only to assets valued above the cap, which is set at $13,990,000 as of 2025 ($27,980,000 for married couples). If your assets are worth more than this amount, you will pay estate taxes only on the amount that exceeds this cap.
Trusts are powerful estate-planning tools, as they can reduce your tax liabilities while providing asset protection from creditors. A trusts lawyer in St. Louis is here to help you. Incorporating certain types of trusts into your estate plan can help you minimize your federal estate tax obligations and preserve your wealth for future generations. However, this strategy will only work if your trusts are properly structured.
Types of Trusts to Consider for Estate Tax Purposes
The right trusts can be highly effective if you wish to minimize your estate tax liability in Missouri, especially if you are a high-net-worth individual. To begin the discussion on how to plan your estate taxes, contact an estate planning lawyer in St. Louis. An estate planning lawyer can walk you through all of the trusts that may be available to protect your assets from taxation, creditors and lawsuits.
Irrevocable Trust
Although a revocable living trust does not avoid estate taxes, an irrevocable trust does. This is the benefit of choosing an irrevocable trust compared to a living trust, despite being unable to modify or terminate it. An irrevocable trust allows you to sign over control of your assets to the trust, which will protect them from being taxed as part of your estate.
Residence Trust
In this type of irrevocable trust, you place real property into the trust’s name. Then, you list yourself and your heirs as beneficiaries of the trust. This allows you to continue living in or using the property, but the trust will become the owner of the property – effectively removing the property from your list of assets for tax purposes.
Bypass Trust
Another type of irrevocable trust, a bypass trust (also called a credit shelter trust), can minimize estate taxes by allowing a married couple to transfer certain assets from a deceased spouse directly to his or her beneficiaries without going through the surviving spouse’s estate. This can allow both individuals to utilize estate tax exemptions.
Charitable Trust
A charitable trust can reduce the value of your estate to minimize your tax obligation by setting aside certain assets for charity purposes. It can also provide an income tax deduction. Plus, donations to charities are exempt from the federal gift tax.
An estate planning attorney can be of assistance if you wish to create, alter or modify trusts for tax purposes. Modifications can have unexpected tax implications if you are not careful. Working with an attorney to achieve all of your estate planning goals is the most effective way to ensure maximum asset and tax protection. Contact us today.