How Missouri's Updated Laws Strengthen Qualified Spousal Trusts

Recent changes to Missouri trust law have strengthened one of the most widely-used estate planning tools: the Qualified Spousal Trust, or QST. This is a type of revocable trust created by both spouses as grantors (usually serving as their own trustees) as an alternative to setting up two separate trusts. Revocable trusts are often considered the “gold standard” in estate planning because of their flexibility and their ability to avoid probate when property passes at death.

Background: Creation of the QST

QSTs were created by statute in Missouri in 2011 in order to allow both spouses to create a revocable trust that provides similar protection as holding spousal property jointly as tenants by the entirety (a form of ownership where property is considered owned by both spouses as a unit, and therefore not subject to the creditors of only one spouse). Only creditors of both spouses can reach entireties property.

A QST allows the spouses to create one trust document to fulfill their estate plan rather than trying to use two separate trusts, which would involve severing their joint property to transfer it to individual trusts. Prior to the enactment of the QST statute, spouses were reluctant to divide their joint property into separate trusts because that would mean losing the protection of entireties property.

Early Questions & Court Challenges

The QST statute specifically preserved the status of entireties property after such property was titled in the QST. This provided the same protection as holding it jointly outside of trust while preserving the probate avoidance of a trust. However, questions remained regarding the status of property that was titled in the QST but had not been held by both spouses as entireties property before being transferred.

In 2015, a Missouri bankruptcy case raised new concerns. The court held that if a spouse had the right to unilaterally sever and remove one half of the joint trust property, that amounted to an impermissible partition right that disqualified the trust as a QST.¹ As a result, the bankruptcy trustee in that case was allowed to reach the trust property.

What is a QST?

In Missouri, couples can use a Qualified Spousal Trust to manage their estate plan together, while keeping important protections in place. A QST:

Combines both spouses’ assets into a single, flexible trust
Preservers creditor protection for property, like joint ownership does
Allows either (or both) living spouses to revoke the trust
Avoids probate at death

QSTs simplify estate planning while adding stronger protection for the spouses.

Legislative Amendments to Strengthen the QST

In response, the Missouri QST statute was substantially amended in August 2014 and again in August 2024. These amendments made it clear that property titled in the QST retained the protection of entireties property no matter how the property was titled prior to being transferred into the QST.²

The 2024 amendment went further by stating that property in a QST retained its protection against creditors even after the first spouse dies, and the surviving spouse retains the right to amend or revoke the QST. This gives greater protection than what the surviving spouse would have had if the property were held outside of trust as entireties property.

Practical Considerations for Spouses

In order to qualify for this enhanced protection, property must be transferred into the QST before the death of the first spouse and must have remained in the trust at that time. Property that passes into the trust only after death (e.g., through a pay-on-death (POD) or transfer-on-death (TOD) designation) does not qualify.

This timing is significant. Assets that are inside the QST at the time of the first spouse’s death receive a level of protection greater than what would be available if the same property were held outside of trust as tenants by the entirety.

POD and TOD designations can be convenient tools for transferring property into a QST at death while keeping the property in the owner’s name during life. Beneficiary deeds, for example, allow real estate to pass into a trust when the owner dies, while still permitting the owner to sell or refinance during life. This convenience, however, comes at a cost: property that only transfers after death does not receive the same enhanced protection as property already in the QST when the first spouse dies.

Potential Challenges

However, the asset protection benefits of a QST may still face challenges. A bankruptcy trustee or other creditor could argue that because the surviving spouse retains the right to revoke the trust or otherwise control the property in the trust, the assets remain subject to creditor claims. In addition, the enhanced protection of the QST does not prevent the division of such property in a future dissolution of marriage action.

The laws governing estate planning decisions such as the use of the QST are complex and evolving. It is essential to involve an estate planning attorney in determining the use of such trusts and in creating a well-considered estate plan.

Written by attorney Michael McKitrick.

[1] In re Brewer, 544 B.R. 177 (W.D. Mo. 2015). The court concluded that if one spouse could unilaterally partition and sell trust assets, the protection of tenancy by the entirety was lost, allowing creditors to reach the assets. This decision prompted Missouri lawmakers to amend the QST law to clarify that revocability does not destroy creditor protection.
[2] Mo. Rev. Stat. § 456.950.3 (as amended). The statute provides that property in a Qualified Spousal Trust retains entirety protection regardless of prior title, and continues to be protected after the first spouse’s death if already in the trust. Protection is only lost on dissolution of the marriage.

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