Choosing between a revocable living trust (RLT) and a Will may seem difficult, but it does not need to be. An experienced Colorado estate planning attorney can help you understand the differences, advantages, and disadvantages 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 appoint to execute your wishes. For example, a very simple Will could be written 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.
- My spouse will be the personal representative or executor of my estate, and if he (or she) is not living, my brother will be my personal representative.
A Will is attractive to some because it can be quite simple and works well to manage the distribution of small estates. However, every will, no matter how small or large, will have to go through probate.
Probate is the legal process of overseeing and administering a deceased person's estate. In probate, your executor has to file your will and other papers with a probate court. The court will then issue letters testamentary which give your executor the authority to carry out all your wishes. The letters testamentary will also give your executor the authority to do things like access your bank accounts, sell your property, and make the distributions you specified in your Will.
Probate will not generally result in additional taxes, but it can be an expensive process because of court costs and attorney's fees.
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 because it 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 are to 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 through a Will but only goes into effect 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 avoid probate if it is fully funded with all of your assets when you die.
Depending on you situation, any of these three can be an effective way to distribute your property after you die.
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. Schedule a consultation with our experienced Colorado estate planning attorneys through the contact link on our website.