Trusts are one of the most powerful tools in estate planning. They can protect your assets, reduce what your family goes through after you pass, and give you control over how and when your wealth is distributed. Yet many people in Shakopee and across Scott County put off creating a trust because the process feels overwhelming or unfamiliar.
At Jaspers, Moriarty & Wetherille, P.A., our estate planning and trusts attorneys work with individuals and families to make trust planning straightforward and tailored to each person’s situation. Whether you own a home near the Minnesota River, run a business along U.S. Highway 169, or simply want to make sure a loved one is cared for after you’re gone, a well-drafted trust may be one of the most important documents you ever create.
A trust is a legal document where one person, called the grantor/settlor (the person who creates the trust), transfers ownership of assets to a trustee (the person or institution who manages those assets) for the benefit of one or more beneficiaries (the people who receive the benefit of the assets). Think of it as a set of written instructions that governs what happens to your property, both while you are alive and after you pass.
Unlike a will, a trust can help you avoid probate, which is the court-supervised process of distributing a deceased person’s estate. The probate process can take months or years and involve costs that reduce what your heirs ultimately receive. A properly managed trust can allow your family to bypass that process entirely.
There is no single trust that works for every family. The right structure depends on your goals, your assets, your family situation, and sometimes your health. Our law firm take time to understand your specific circumstances before making recommendations. Below is an overview of the most common types of trusts.
A revocable living trust is the most common starting point for many families. You create it during your lifetime, transfer assets into it, and retain the ability to change or cancel it at any time. You typically serve as your own trustee while you are alive and capable, which means day-to-day control of your assets stays with you.
When you pass away, or if you become incapacitated, a successor trustee you named in your trust takes over. Assets held in the trust can then be distributed to your beneficiaries according to your instructions, without going through probate.
Key benefits may include:
A revocable trust does not, on its own, protect assets from creditors or reduce estate taxes. For those goals, a different structure is often needed.
Once you transfer assets into an irrevocable trust, it cannot be changed and you generally give up control over the assets. Because the assets are no longer legally yours, they may be shielded from creditors, lawsuits, or other claims.
Irrevocable trusts are sometimes used by business owners, professionals with liability exposure, or individuals planning ahead for long-term care costs. The rules around these trusts are detailed and the timing matters considerably. Moving assets into an irrevocable trust too close to a creditor claim or a Medicaid application can create serious legal complications.
A Medicaid Asset Protection Trust is an irrevocable trust designed to hold assets in a way that may allow them to be excluded from Medicaid eligibility calculations. Long-term care is expensive. For many families, the cost of nursing home care or assisted living can deplete a lifetime of savings within a few years. Medicaid (called Medical Assistance in Minnesota) can help cover those costs, but qualifying requires that your assets fall below certain limits.
The timing for a Medicaid asset protection trust is critical. Minnesota law imposes a look-back period, meaning that transfers made within a certain number of years before applying for benefits may be scrutinized and could result in a period of ineligibility. Planning ahead, ideally years before care is needed, gives families the most options. Waiting until a health crisis occurs at St. Francis Regional Medical Center or another local facility significantly limits what can be done.
If you have a child, sibling, or other family member who receives government benefits such as Supplemental Security Income (SSI), SSDI, or Medical Assistance, leaving them a direct inheritance could disqualify them from those programs. A special or supplemental needs trust is designed to hold assets for that person’s benefit without counting against their eligibility for needs-based programs.
The trust can pay for things that government programs do not cover, such as education, transportation, recreation, and personal care items, while preserving the benefits that support their daily needs. Getting the language right in these documents is critical. A small drafting error can have significant consequences for someone who depends on those benefits to live.
Families in Shakopee who have loved ones receiving wavier services through Scott County Health and Human Services or other public programs often find this type of trust to be an essential part of their planning.
For those who want to support a cause they care about while also benefiting their family, charitable trusts offer a structured way to do both. Two common forms are:
Both structures can offer potential tax advantages and may allow you to make a meaningful gift to a cause, a local institution, or a community organization while still providing for your family.
A testamentary trust is created through a will rather than as a standalone document. It does not exist or hold assets during your lifetime. Instead, it comes into effect after you die and your estate goes through probate.
Because it is created through a will, a testamentary trust does not avoid probate. However, it can be a useful tool for controlling how and when assets are distributed after your estate is settled. Parents sometimes use testamentary trusts to hold assets for minor children until they reach a certain age, rather than having a court-managed guardianship account.
A family trust is a broad term that generally refers to a trust structured to hold and distribute assets among family members across one or more generations. These trusts are often used to manage a family business, protect inherited real estate, or ensure that wealth stays within the family rather than passing to a divorcing spouse or outside creditor.
Scott County has seen significant growth in recent years, and many families in the Shakopee area have accumulated meaningful assets, whether through real estate, small businesses, or long-term savings. A family trust can be one way to preserve what has been built and pass it on with intention.
A dynasty trust is a type of family trust designed to last for multiple generations. Assets held in a dynasty trust can grow and be distributed to children, grandchildren, and beyond, while potentially remaining protected from estate taxes and creditor claims at each generational transfer.
These trusts are not only for the very wealthy. Families with a meaningful amount of real estate, business interests, or investment assets may find value in a structure that extends their planning horizon beyond a single generation. Minnesota law has its own rules governing how long a trust can last, and those rules should be reviewed carefully with a lawyer before this type of structure is established.
Minnesota is one of many states that recognizes pet trusts as a valid legal instrument. A pet trust allows you to set aside funds for the care of a specific animal and name a caregiver to provide that care. It can specify the type of food, veterinary care, living arrangements, and other details that matter to you.
Without a pet trust, your pets become property under the law and pass to whoever inherits your estate. That person may not share your commitment to your animals’ care. A pet trust removes that uncertainty.
Creating a trust document is only the first step. A trust that has not been properly funded (meaning assets have not been transferred into it) generally cannot do what it was designed to do. This is one of the most common and consequential mistakes people make.
Funding a trust typically involves:
Not every asset belongs in a trust. Retirement accounts like IRAs and 401(k)s, for example, are often better handled through direct beneficiary designations rather than trust ownership, due to tax treatment rules. Our attorneys can help you think through which assets to transfer and which to handle differently.
It depends on the type of trust. A revocable trust can generally be amended or revoked at any time while you are alive and mentally competent. You might update it after a marriage, divorce, birth of a child, or a significant change in your financial situation.
An irrevocable trust typically may not be changed. In some cases, Minnesota law may allow modifications through a court process or through the agreement of all beneficiaries. But the bar is high, and changes are not guaranteed. That is why it matters to work through the details carefully before signing.
Life changes. Families grow. Relationships shift. A trust that made sense ten years ago may not reflect your wishes today. Periodic reviews with an attorney are worth the time.
A trustee is the person or institution responsible for managing trust assets and carrying out the terms of the trust. This is not a ceremonial role. It carries real legal obligations, including:
Trustees who fail in these duties can be held personally liable. That is not a hypothetical concern. Trust administration disputes do arise, and when they do, they often end up in court. Choosing a trustee who understands the responsibility, and who has the time and temperament to handle it, is one of the most important decisions in the planning process.
Sometimes a trustee becomes unable to serve, moves away, or simply does not perform their duties properly. Most well-drafted trusts include a process for removing or replacing a trustee. If the trust document is silent on the issue, Minnesota law generally provides a path forward, which may involve a court proceeding.
If you are a beneficiary dealing with a trustee who is mismanaging assets or refusing to provide required information, that is a situation where legal counsel may be important sooner rather than later. The longer a problem goes unaddressed, the harder it can be to recover what was lost.
In most cases, yes. Even with a comprehensive revocable trust, attorneys typically recommend a document called a pour-over will. This is a simple will that directs any assets not already held in your trust at the time of your death to be transferred into it. It acts as a safety net for assets that were accidentally left out of the trust or acquired shortly before death. Without it, those assets could pass through probate under Minnesota’s default intestacy rules rather than according to your wishes.
Generally, a revocable trust does not offer creditor protection during your lifetime. Because you retain control over the assets and can take them back at any time, courts typically treat them as still belonging to you for purposes of creditor claims. An irrevocable trust, properly structured and funded well in advance of any claim, may offer stronger protection. The specifics depend on the type of trust, when it was created, and the nature of the claim.
If you die without any estate planning documents, your estate will be distributed according to Minnesota’s intestate succession laws. These are the state’s default rules for who inherits your property. The outcome may not reflect your actual wishes. A surviving spouse, children, or other relatives may inherit in proportions that do not match what you would have chosen. If you have no qualifying relatives, your assets could pass to the state. Probate proceedings would be handled through the Scott County District Court, which has jurisdiction over probate matters for residents of Shakopee and the surrounding area.
Many people assume they put off establishing their estate plan. However, a sudden illness, accident, or cognitive decline can change lives in the blink of an eye. Once someone lacks the mental capacity to sign legal documents, their options narrow considerably.
The planning and asset funding process, including transferring real estate, retitling accounts, and coordinating beneficiary designations, takes time. Completing these processes thoughtfully, without urgency, leads to a more complete and reliable plan.
The Shakopee law firm of Jaspers, Moriarty & Wetherille, P.A., handles a wide range of estate planning matters, including trust drafting and funding, probate administration, wills, health care directives, powers of attorney, and business succession planning. Having served the Scott County community for many years, our lawyers understand the local landscape, the courts, and the practical concerns that local families face.
If you have questions about whether a trust is right for your situation, or if you already have a trust and want to make sure it still reflects your goals, we welcome the opportunity to talk through your options. Contact our law office to schedule a consultation with one of our estate planning lawyers.
