What is a Living Trust in Colorado?
From maintaining privacy to offering more control, revocable living trusts can be very advantageous for people in Colorado.
There are a number of choices when it comes to estate planning in Colorado, including wills and trusts. Which type of planning vehicle should be utilized depends on each person’s particular circumstances and desires. For some, living trusts make the most sense; for others a will serves their needs.
Revocable Living Trusts
Also known as inter vivos trusts, revocable living trusts are written documents that allow individuals to dictate how their assets will be distributed once they pass away, while maintaining the ability to use and manage those assets for themselves throughout their life. According to AARP, those who establish a living trust have the power to revoke or modify the trust, so long as they are not deemed incompetent.
When setting up these trusts, the individual usually names themselves as the lifetime beneficiary and initial trustee. They also name a secondary person as a successor trustee such as a child or spouse; or the successor trustee may be a financial organization.
The Various Benefits of a Living Trust
With living trusts, probate can be avoided, and trustees can distribute assets without needing approval from the court. Living trusts offer many other perks, including:
- Protecting privacy, since living trusts do not become public record
- Avoiding the probate process in other states where the individual owns real estate
- Offering flexibility
- Allowing trustees or successor trustees to manage assets when the creator of the trust becomes incapacitated
- Determining how and when property is transferred to heirs – all at once or in installments
- Quicker access to the estate by heirs than probate
It is important to remember, however, that while living trusts can be very beneficial, they are certainly not for everyone. Sometimes, living trusts can cost more than preparing wills, require retitling of assets and lead to more paperwork. As with a will, they can also be challenged if heirs are not happy with how assets are to be divided.
Setting Up an Effective Estate Plan
For some, living trusts are an excellent way to protect their assets and simplify estate planning. However, others may choose to move forward with a will. Regardless of the route an individual decides to take, careful drafting of the estate plan is critical.
Creating a plan can be complicated and there are many variables that must be taken into consideration. In order to make sure that property is protected, speak with an experienced legal professional.