There are many benefits to creating a trust. It “avoids probate” because the property of the person who has passed away (the “Decedent”) is usually not administered through the Probate Court. It also allows the information of the Decedent and his assets to remain private because his estate is not being administered through the public setting of the Probate Court. Lastly, it can lend tax saving benefits. However, you should also be aware that Colorado has streamlined its probate process, and the time and expense to administer an estate in Colorado is generally less than in states like New York and California. Also, a trust does not magically administer itself after a person’s death, and as with a will, you will need a trusted individual or bank to carry out all the details of the document. It is a good idea to speak with an estate planning attorney to determine if a trust is appropriate for your specific situation.

A trust is an arrangement where assets are held by a trustee for the benefit of another person called the Beneficiary”. A revocable living trust is may be used as an alternative to creating a will. A revocable living trust is created by a person called the Settlor while he or she is living. The Settlor titles his or her assets in the name of the trust during his lifetime which is called funding the trust. The trust document indicates who is the settlor, the trustee and the beneficiary.  Often when a revocable living trust is created the Settlor is also the Trustee and the Beneficiary during his lifetime, which allows him to manage the property in the Trust and receive the income and principal from the assets during his life. A revocable living trust is “revocable” while the Settlor is because he can change or cancel it at any time.

Upon the Settlor’s death, a revocable living trust becomes “irrevocable.” The trust document directs who should be the new Trustee if the Settlor becomes incapacitated or dies.  The document also directs who are the new Beneficiaries of the trust’s assets after the settlor’s death. A trust usually avoids administration of the Settlor’s estate in Probate Court. A trust can also make it possible for Beneficiaries to receive regular income from the trust’s assets for a predetermined period of time. 

Trusts hold assets for the benefit of someone or something. There are many different types of trusts that accomplish many different goals.  Trust are usually more expensive to create and take time to manage effectively.

A will is a private document. It is not filed with any agency or court until after death. You should keep your will in a safe place.  After a person dies, the will is lodged with the Court.

Colorado law has specific forms and language that is used in estate forms. The laws change frequently. An estate plan should accommodate your specific needs in consideration with the current state of the law. You should have an estate plan drawn up by a competent attorney. The danger of downloading forms, buying a package online or at an office supply store is that you think you have created a valid will and are protected when you may not be.  Trying to save money on the front end can create very expensive mistakes in the long run.  The law requires documents to be executed (signed, witnessed and notarized) in a certain manner.  If you sign in the wrong place, or on the wrong page, you may think you have a will that fits your needs when in reality, it is not effective, and you are completely unprotected.  Other services may allow you to enter names of those you want to inherit property and it generates the document for you.  If you name a minor child as a beneficiary on your life insurance, retirement account or name the child in your will without setting up an appropriate way for the gift to be held in trust until the child is older, you will incur unnecessary legal costs by having to go to court and set up a conservatorship to hold the money for the child if the parent dies when the child is a minor.  Most importantly, you don’t have a trained professional to give you advice as to whether the documents you create will actually work the way you want them to.  

The danger of writing your own will or downloading something is that you don’t know who created it, whether it was drafted under the current law, or whether it fits your needs.  Attorneys don’t sell documents.  They make sure to write an estate plan that fits the needs of your situation.  Attorneys can answer your questions and provide direction that you cannot get when you download forms.

You do not have to have an attorney draft a will but we recommend that you use an attorney.  An estate planning attorney can talk with you about your assets, your wishes and your goals.  Attorneys can provide useful advice and strategies.  They can explain the outcome of certain decisions or actions.  Software cannot do that.  An attorney will customize your estate plan to your individual situation and make sure the goals of your estate plan are accomplished.  Attorneys provide guidance and advice about how the law will apply to your situation which you cannot get from a downloaded a form or follow instructions from an unknown source on the internet.  An estate planning attorney can help you avoid future costly problems and family conflict.

The first step to creating an estate plan is to understand your assets and how the law applies to your assets.  The second step is to evaluate your current relationships and family situation.  Next, you will establish a plan which allows you to be in control of the important decisions you need to make in your life, such as naming the person or persons that will assist you when you have medical or financial needs that you are unable to manage on your own.  You will select who the trust members of your ‘team’ will be that you can turn to.  You will be able to name the person to care for your children should you be unable to do so, or how long you would like to be on life support at the end of your life; and where you want your assets to go when you die and how you want them managed before and after death.  

An estate plan usually includes the drafting of a will, a personal property memorandum, a general durable power of attorney, a medical durable power of attorney, an advanced directive, often called a living will, and a disposition of last remains.  Some people choose to create a trust to hold their property rather than have a will.  If a person has minor children, then the estate plan often includes nominating a guardian and including a trust provision in the will to protect the child should he or she inherit before reaching the age of majority.  

Everyone should have a Will regardless of whether you have a lot of money or assets or not.  A Will does more than devise assets. It provides a written record of your wishes after your death.  It allows you to not only decide how your property will be distributed upon your death, but for parents with minor children, it is a means for you to decide who will act as guardian to your children if something happens to you. A will can also help reduce or eliminate the risk of family disputes after your death. It also allows you to name the person you would like to be in charge of managing your estate.  If you do not have a will, state law and the courts determine who will receive your property after you are gone, and will also determine who takes care of your minor children.