Section 8 Conflicting Goals Create Problems

• Library: Trust and Estate Legislation 2012

As recognized in In re Bellingroehr, 403 B.R. 818, 821 (Bankr. W.D. Mo. 2009) (discussed above in §7), “[i]n the years since the fiction of entirety property was created, revocable trusts have developed as a tool for estate planning which enables individuals to retain the same control over their property as they would have by leaving it in their own names.” The main estate planning purpose of creating a revocable trust is to avoid probate administration upon the death of the settlor of the trust. But in Missouri (and other states with strong tenancy by the entirety ownership), the concern has been that, to avoid probate by using a revocable trust and transferring tenancy by the entirety property to that trust, the creditor protection of tenancy by the entirety could be lost. Bellingroehr indicates that, at least in Missouri, both goals can be accomplished—at least when the transfer is to a joint trust that mirrors the characteristics of entirety property.

Another important goal of estate planning, when applicable, is to avoid federal or state estate...