Each family in Colorado has its own needs, goals and concerns when it comes to how assets will be passed on in the event of the primary benefactor’s death. While wills, powers of attorney and advance medical directives are an important aspect of an estate plan, another useful estate planning tool is the revocable trust. The following details some of the benefits of using this instrument.
First, a revocable trust allows the grantor to make changes to it until that person dies. At that point, the revocable trust can be broken into separate irrevocable trusts to provide for named beneficiaries for years to come. Also, all property in the trust will bypass the probate process, which can save a tremendous about of time, stress and expense for the surviving beneficiaries.
Since the trust avoids probate, the instrument allows for more privacy as the terms will not be made public, like in the case of a will. The trust also allows the benefactor a far greater level of control in how assets will be distributed, and can help reduce the likelihood of multiple estate administration if the grantor holds property in other states. In relation to that, any assets or property can flow into a trust, including not only real property but life insurance pensions, retirement accounts and more.
Although the revocable trust does not grant asset protection from creditors while the grantor is alive, it will offer beneficiaries protection against creditors under certain circumstances. The trust can also help protect assets in the event a beneficiary divorces or if the beneficiary is irresponsible with money. The revocable trust can also help mitigate estate taxes for beneficiaries.
Revocable trusts offer many more benefits than the ones mentioned. Anyone in Colorado who wishes to determine how this instrument can best suit his or her needs would do well to contact a competent estate planning attorney to discuss his or her goals. When used in conjunction with other estate planning instruments, the trust can ensure a benefactor’s final wishes are realized and help provide a solid future for his or her loved ones.