Trust and Estate Planning Attorneys in Colorado
The Germany Law Firm helps clients create and administer Colorado trusts. We also assist clients who wish to challenge an existing trust.
You do not need to have a large amount of assets to set up a trust. Many can benefit from setting up a trust. Below you will learn the basics of trusts and learn if setting up a trust is the right choice for you and your family.
What is a trust?
A trust is a legal entity that holds your property. Unlike a Last Will and Testament, a trust is valid upon creation. Trusts may be used to transfer property upon death or to protect your family property from liability and taxation.
Trusts are made up of four basic elements:
1. Trust Property
You determine which assets to include in your trust. You may be wondering, what do I put into a trust? Trusts can hold real estate, cars, investments, and other types of assets. The Germany Law Firm can help you determine which assets are best suited for a trust.
Who is a Trustee? A trustee is a person or firm who manages the trust and administers property or assets from a trust. This can be a family friend, accountant, or bank.
Beneficiaries are the people who benefit or receive property and assets, from the trust.
4. Instructions for Trust Distribution
How do you want to administer the trust? The Germany Law Firm can help you determine instructions on how you want to distribute property and assets from the trust.
What are the different types of trusts?
- Testamentary Trust
A testamentary trust is created by a will. It only becomes effective when the grantor, the person who creates the trust, dies. These trusts can be an easy way to transfer property.
- Revocable Living Trust
A revocable trust, also known as a revocable living trust, can be used during the life and after the death of the grantor. This type of trust is flexible and can be amended while the grantor is still alive.
The flexibility of a revocable trust is attractive to families who want to transfer their trust assets to family members and want to have the option of making future changes to the trust transfer schedule.
- Irrevocable Trust
An irrevocable trust can be used during the grantor’s life. It cannot be changed once created and the assets cannot be reclaimed.
While irrevocable trusts are less common, they are great tools for families who need to consider planning for children with disabilities, Medicaid eligibility, or are trying to avoid high estate taxes.
What is better, a will or a trust?
Wills and trusts are both important estate planning tools that help protect your assets. One is not better than the other. Depending on your personal circumstances, you may elect to have both a will and a trust. To understand which is best for you, you need to understand the key differences:
What are the key differences and similarities between a will and a trust?
- Probate Process. A will is a legal document that outlines how your property will be distributed at your death. A will must go through a legal process called probate once the person who creates the will passes away. Alternatively, trusts avoid probate.
- Effective Date. A will is effective when the testator (the person who signs the will) dies. A trust is effective immediately after it is signed.
- Changes to a Will or Trust. A will can be altered. A trust can also be altered if it is a revocable trust.
What are the benefits of a trust?
There are many use cases where an individual and/ or family can benefit from a trust. Some examples include:
- Avoid probate costs. When you set up a trust, your heirs avoid a probate process that costs both time and money.
- Protect your assets. A trust can protect your assets from creditors and provides a guideline for beneficiaries who may not understand money management.
- Care for individuals with special needs. A trust can provide supplemental income for a person with disabilities without disqualifying them from public assistance.
How do I set up a trust?
The first step to setting up a trust is outlining your goals. Why do you want trust? Who will benefit from the trust? An estate planning attorney can help you establish your goals and determine the best trust structure for your needs.
Ready to create a trust or learn more about your options? Reach out to The Germany Law Firm today to discuss trust creation, administration and estate planning.