Colorado individuals who are contemplating an estate plan may consider using trusts as part of the plan. Living trusts provide a variety of benefits to the person making them, allowing them to determine who gets the person’s property upon his or her death. Knowing about living trusts can help individuals in Colorado establish them and use them effectively in their estate administration.
Revocable trusts allow the person who makes them to change them as his or her circumstances or preferences change during the person’s lifetime. A trust is formed by drafting a written document, signing it and assigning property to it. The trust lists all of the property in the trust and names a trustee to take care of the property. It also lists the beneficiary, the person or charity that will acquire the property upon the person’s death. Then, the person who makes the trust must transfer the property into it. This can be accomplished in many ways by simply making a list of the property that the trust will take ownership of. However, if there is deeded property to be included in the trust, the deed must be retitled in the name of the trust.
One distinct advantage to using a trust is to avoid the probate process. However, there are other ways to accomplish this same goal, such as using transfer on death forms or beneficiary designations. Individuals can list a person to receive funds as a transfer on death on property deeds, CDs, checking accounts, savings accounts, mutual accounts, stocks and bonds. Life insurance, annuities and retirement accounts can have a named beneficiary.
Living trusts allow individuals to leave property to minors, reduce the possibility of a court battle over a person’s estate, and name beneficiaries for their property. However, they cannot be used to name a guardian for minor children, name an executor, name a manager for the children’s property or inform people about how to pay debts or taxes. A Colorado estate planning attorney can help individuals devise a solid and complete estate plan.
Source: Fox Business, previously posted online article “The Power of Trusts“, Dennis Holmstrom, July 09, 2013
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