Choosing between a revocable living trust (RLT) and a Will may seem difficult. Let an experienced Colorado estate planning attorney help you understand the differences. Here are the pros and cons of each.
A Will is a simple and short document that states to whom your assets will go in the event of your death and whom you trust to execute your wishes. For example, a Will may be summarized as follows:I want all my property and belongings to go to my spouse and if he (or she) is not living, then equally to my adult children.
A Will is attractive to some because it can be quite simple and works well to manage the distribution of small estates. However, it won't avoid probate.
Probate is the legal process of administering a deceased person's estate. In probate, your executor will file papers with a probate court to receive letters testamentary, giving him or her the authority to execute all your wishes, such as accessing your bank account and making the distributions you specified in your Will.
Probate will not result in additional taxes, and if you have everything jointly titled with your spouse, then probate will only be necessary after the second spouse dies.
Like a Will, a revocable living trust states to whom your assets should go in the event of your death and who you trust the handle that distribution. A trust is, however, a longer, more complex document, but allows you to provide for the following benefits:
A Will - can be nice, simple, and short. It works well to manage how the assets of a small estate will be distributed. But it normally won't allow you to structure distributions from your estate, provide asset protection for your beneficiaries, nor will it to avoid probate.
A testamentary trust - is created inside a Will but goes into effect only after your death. It allows you to place conditions on distributions from your estate and provide asset protection for your beneficiaries. But it does not avoid probate.
A revocable living trust - is more complicated to set up, but allows you to place conditions on distributions from your estate, provide asset protection for your beneficiaries, and to avoid probate if it is fully funded with all of your probatable assets when you die.
All of these work well to determine how your property will be distributed after you die. But, only a revocable living trust allows you to avoid probate. Moreover, a Will should only be used to manage the distribution of a small and uncomplicated estate.
An experienced Colorado Estate planning attorney can assist you in determining whether you need a Will, a Will containing a testamentary trust, or revocable living trust to address your estate planning goals. Furthermore, your attorney can assist you in preparing all of the necessary documents.
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