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Denver irrevocable trust lawyer

At Colorado Estate Matters, our skilled Denver estate planning attorneys are experienced in developing irrevocable trusts and helping to oversee their administration once they’re in place. When you are ready to develop an irrevocable trust, don’t hesitate to contact an experienced Denver irrevocable trust lawyer.

To learn about your different options and the best solutions for safeguarding your loved ones and assets well into the future, schedule a free consultation by calling (303) 713-9147.

Denver irrevocable trust lawyer

What are irrevocable trusts?

Irrevocable trusts are estate planning tools that can’t be altered after they’ve been authorized (signed) and officially put into effect. These types of trusts are the counterparts to revocable living trusts which may be altered at any point in the future by the trust maker or grantor.

What are the different types of irrevocable trusts?

Our Denver irrevocable trust lawyer can establish one or more irrevocable trusts, depending on who you wish the beneficiary to be and how you want to provide assets or income for them.

Irrevocable life insurance trusts

Irrevocable life insurance trusts (ILITs) are funded by life insurance policies instead of other assets. The policyholder can name the trust as the beneficiary of the policy, and the benefits are placed in the trust upon their passing. At that point, the trust functions like any other trust with a trustee administering its assets and distributions.

Grantor-retained annuity trusts

A grantor-retained annuity trust (GRAT) is funded by an annuity and is used to minimize the taxes on large financial gifts to family members. Grantors may be able to gift appreciated assets to the trust tax-free.

Annuities may be paid into the GRAT during the term of the annuity; at this time, only the grantor is the beneficiary of the trust. After the annuity period ends and the trust expires, the beneficiary receives the assets and pays little to no gift taxes.

Charitable trusts

A Charitable Lead Trust (CLT) benefits a qualified nonprofit, designated as 501(c)(3). The organization receives income from the trust for a set period of time. At the end of the donation period, the assets revert back to the trust owner or are distributed to their heirs.

A Charitable Remainder Trust (CRT) is the reverse of a CLT. In these cases, the trust pays a beneficiary during their lifetime and the remainder of the trust is allocated to the named charity upon the beneficiary’s death.

Special needs trusts

A special needs trust is one that’s specifically designed to benefit individuals with disabilities, allowing them to access additional financial resources without losing eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI).

Although these are often created by the beneficiary’s family members, they can also be created by the individual as a form of long-term financial planning. The trustee has the discretion to make decisions about how the trust’s assets should be used, but they’re required to act in the beneficiary’s best interests at all times.

Qualified personal residence trusts

Qualified personal residence trusts allow a homeowner to remove their home from their estate to reduce the amount of gift tax that might be incurred when transferring assets to a beneficiary. You may live in the home while it’s part of the QPRT. In order to take advantage of those tax benefits, you must outlive the term of the trust. If you pass before the trust expires, then the property will be included in your estate.

What are the benefits of irrevocable trusts?

Some of the specific benefits associated with irrevocable living trusts include tax benefits and asset protection benefits.

Tax benefits

When you create an irrevocable trust and transfer certain assets to it, those assets become the property of the trust. This effectively means that you and your beneficiaries do not directly own these assets. As a result, you generally won’t be responsible for paying the taxes on these assets.

Additionally, there may be federal or state tax exemptions that specifically apply to trusts which can provide you and/or your beneficiaries with further financial savings. The tax benefits of irrevocable trusts can also come into play with charitable estate planning, as a trust maker or his

beneficiaries may be able to benefit from charitable tax deductions in the future if the irrevocable trust contains terms for charitable donations.

Asset protection benefits

Assets transferred to irrevocable trusts are not considered to be owned by the trust maker or the beneficiaries. These assets can be protected from creditors in the near future. Assets are not considered when it comes to the beneficiaries’ eligibility for government benefits.

This is at any point in the future. Beneficiaries of irrevocable trusts can obtain financial support and benefits from the trust. They can rest assured that these assets will be outside of the reach of creditors. Considerations for government assistance if or when these issues arise at any point in the future.

Assets protected by irrevocable trusts

Below are some assets that could be transferred into an irrevocable trust. An irrevocable trust can also hold and protect those assets. This includes (but is not limited to):

  • Cash
  • Life insurance policies (and their proceeds)
  • Real estate and property
  • Businesses
  • Investment assets

What are the reporting and compliance requirements for irrevocable trusts?

The trustee is required to submit an accounting of the trust to the government each year, including any gifts or added assets and distributions. The owner of the trust (the grantor) must also be provided with an accounting of the trust.

Trust regulation and compliance can be complex, and a mistake in the reporting could end up costing thousands in fines and may jeopardize the status of the trust and its assets.

At Colorado Estate Matters, our services include administering a trust and completing all required reporting on its behalf. We also keep abreast of changes in government compliance for an irrevocable trust.

Modification and termination of irrevocable trusts

If changes or modifications to the terms of the trust can be made with the written consent of all parties, then a Denver irrevocable trust lawyer can make the appropriate changes and submit the modified trust to the court for approval. If one or more parties don’t agree to the proposed changes, a court order may be necessary to effect the change or terminate the trust if it no longer serves its material purpose.

What are some challenges and disputes involving irrevocable trusts?

One of the most common challenges to an irrevocable trust is questioning whether it is achieving its material purpose. This could happen when decades have passed and all primary and secondary beneficiaries have passed away, or if misuse of the trust is suspected.

Trusts may also be contested if excluded interested parties had reason to believe that they would benefit from the trust. These challenges are similar to challenging a will; the excluded heirs may assert that the trust was created with undue influence.

What are some legal strategies for irrevocable trusts?

Some of the legal strategies we employ with irrevocable trusts include:

  • Trust asset portability
  • Avoiding capital gains taxes
  • Taking advantage of a tax break for qualified business income (QBI),
  • Use the trust to avoid the “deduction cap” for state or federal taxes

Speak with a Denver irrevocable trust lawyer who will work with you to determine your financial goals and draft irrevocable trusts that help you achieve them.

Why choose Colorado Estate Matters, Ltd.?

When you are ready to develop an irrevocable trust, or you need assistance administering any type of trust, you can rely on a Denver irrevocable trust lawyer from Colorado Estate Matters, Ltd.

We provide a thoughtful, comprehensive approach to our client’s estate planning, elder law, and other legal needs. We take pride in helping each of our clients and their families find the best solutions for them.

Our Denver estate planning attorneys use a variety of traditional and innovative approaches to develop effective solutions tailored to our client’s needs and objectives. Our goal is to help our clients efficiently navigate the complexities of the law. They now can develop effective, prudent solutions that will protect them, their assets, and their families in the future.

To learn more about irrevocable trusts, schedule a free consultation by calling (303) 713-9147 or contacting us online.

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Featured Attorney

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Justin W. Blow

Managing Partner and Attorney

Common Probate Questions

What is probate in Colorado?
Probate in Colorado is the legal process by which a deceased person’s assets are distributed and their debts are paid under court supervision.
When is probate necessary in Colorado?
Probate is typically required when a person dies with assets solely in their name, and those assets exceed a certain value, or there’s any real estate. The threshold amount changes over time, so checking the current limits is essential.
How do I start the probate process in Colorado?
To initiate probate in Colorado, you need to determine if formal probate is required, and then file an Application or a Petition (as well as the necessary ancillary documents) with the appropriate court, depending on the circumstances.
What assets are subject to probate in Colorado?
Generally, assets that are solely owned by the deceased, such as real estate, bank accounts, and personal property, are subject to probate. Jointly owned assets with rights of survivorship, assets held in a trust, and assets with designated beneficiaries typically bypass probate.
How long does the probate process take in Colorado?
The duration of probate in Colorado can vary depending on the complexity of the estate and any disputes that may arise. Often it takes a year or more to complete.
What are the costs associated with probate in Colorado?
Probate costs in Colorado can include court fees, attorney fees, personal representative fees, and other administrative expenses. These costs can vary based on the size and complexity of the estate.
Can I avoid probate in Colorado?
Yes, there are strategies to avoid probate in Colorado, such as creating a revocable living trust, using beneficiary designations on assets like life insurance policies and retirement accounts, and jointly owning property with rights of survivorship.
What are the rights and responsibilities of a personal representative in Colorado?
The personal representative (executor or administrator) is responsible for managing the estate, paying certain debts and taxes, and distributing assets to beneficiaries in accordance with the law and the deceased person’s will (if one exists).
How are disputes handled in Colorado probate cases?
Disputes in Colorado probate cases can be resolved through mediation, negotiation, or litigation in court if necessary. Common disputes may involve the validity of the will, claims by creditors, or disagreements among beneficiaries.
Is estate tax a concern in Colorado probate?

Colorado does not have a state-level estate tax, but federal estate tax may apply to larger estates. It’s important to consider federal tax implications when dealing with an estate.

Is estate tax a concern in Colorado probate?

Colorado does not have a state-level estate tax, but federal estate tax may apply to larger estates. It’s important to consider federal tax implications when dealing with an estate.
 It’s essential to consult with an attorney or legal professional experienced in Colorado probate law to get accurate and up-to-date information and guidance on your probate matter.

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