Many people believe that they have done everything that they can to prepare for the day when they will no longer be around to care for their loved ones. They may have taken out insurance policies and prepared a will so that their dependents will be financially secure after they are gone.
But, what most people don't know is that by simply making a will and taking out some insurance policies, they have done just slightly better than nothing to protect their assets. This is because, after you are gone, any asset that is only governed by your will must go through probate and probate fees must be paid in order for that to happen.
In addition, the probate process can take months and years to complete. So, your beneficiaries may have to wait a long time to inherit your estate, after it has already been considerably diminished by probate fees.
However, instead of forcing your beneficiaries to wait in limbo and then disappointing them with a far smaller share of the estate that they had expected to inherit, you may want to consider other estate planning options, like a revocable living trust. A revocable living trust can save your estate tens of thousands of dollars that can then go directly to your beneficiaries, instead of being lost to probate.
The benefits of a revocable living trust are the cornerstone of Colorado estate planning. A simple will is often too basic to address many of your sophisticated estate planning, asset protection, and probate avoidance needs.
A living trust is as an arrangement whereby you (the grantor) transfer legal title of an asset to a trust where it will be managed by a trustee, pursuant to your instructions.
Let's say you establish a trust for the benefit of your family. If drafted properly, you can achieve your estate planning goals and retain control over the trust assets.
The bottom line is that you retained total control over the trust and its assets while you are alive.
In order for a revocable living trust to work for you, you must fund it with assets such as your real estate, LLC, corporation, partnership, bank account, brokerage account, 401k, IRA, life insurance policy, etc. This is done by tilting the assets in the name of the trust.
The trust becomes the new owner, but you (as the grantor and the trustee) continue to have complete control over the assets. For example, you can transfer assets in and out of the trust whenever you want, usually without tax consequences.
After you die, the successor trustee takes over management of the trust. And at this point, your revocable trust typically becomes irrevocable.
An irrevocable trust cannot be changed or modified. This ensures the continuity of your wishes because your successor trustee cannot change the terms of your trust.
The most important trust terms usually involve when and how your assets will be distributed to your beneficiaries. For example, you may dictate that after your death, the successor trustee must pay income to your spouse, and upon your spouse's death, pay the remaining trust assets to your children or grandchildren. Furthermore, you can dictate that your beneficiaries won't have access to the assets until they reach a certain age.
Here are some of the many benefits offered by a revocable living trust:
There are many options to consider when you begin to investigate the intricacies of estate planning. But, the one thing that you should never wonder about is whether or not you should be working with an experienced estate planning attorney.
In order to best protect your estate and your beneficiaries, you should always consult with a knowledgeable estate planning attorney who can help you determine the estate planning solution that best suits the needs of you and your dependents.
For more information regarding a Colorado revocable living trust to protect your assets and provide for your loved ones, consult with reputable Colorado estate planning lawyer today.