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What can revocable trusts do in Colorado?

On Behalf of | May 23, 2019 | Trusts |

Many people in Colorado include a revocable trust in their estate plan. Revocable trusts can be useful in estate planning, since they provide a means for preserving a person’s assets to hand down to trust beneficiaries upon the grantor’s death. Moreover, unlike irrevocable trusts, grantors can modify a revocable trust during their lifetime. However, it is important to understand what exactly a revocable trust can and cannot do.

First, many people believe that their revocable trust will automatically bypass probate. However, this isn’t always true. First, if a revocable trust is not fully funded, then the assets that would have gone to the trust will be probated. Second, some states require revocable trusts to go through some sort of probate process so that creditors do not have access to trust funds and also to limit the timeframe beneficiaries have to challenge the trust. However, this process is often quicker and cheaper than the probate process when a person dies intestate.

Second, revocable trusts are not incredibly complex. In truth, many people — even those of modest means — can benefit from having a revocable trust. Unlike wills, trusts are not included in the public probate record. In addition, trusts can contain disability plans, which wills cannot.

Finally, it is important to note that, once the grantor passes away, the successor trustee still has duties that must be accomplished before the trust beneficiaries can receive their inheritance checks. While a full probate estate need not be opened, the grantor’s affairs must be satisfied. However, doing so can be quicker than it would have been if a person had a will instead, because trustees do not have to obtain court orders to fulfill their responsibilities.

There are other reasons why it might be preferable to execute a trust instead of a will. However, these estate planning decisions are different for each individual and what documents are appropriate will depend on a person’s specific situation. Since there is no one-size-fits-all solution to estate planning, it is important to seek professional guidance when executing an estate plan to ensure that your wishes are met.