Living Trusts In Colorado ~ Revocable and Irrevocable Trusts
Living trusts are one of the most powerful estate planning tools available in Colorado. A living trust, like other trusts, allows you to dictate what happens to your assets after you die…and even before, all while keeping things out of the court’s hands.
What Is A Living Trust
As the name implies, a living trust in Colorado allows you (or someone you designate as trustee) to control and benefit from your assets while you’re still alive. After you die, the assets in your living trust are distributed to the beneficiaries that you’ve designated.
A Living Trust Lets You Use Your Assets When You Need Them
You can put whatever assets you choose in a living trust, although there are restrictions on certain items like 401(k)s and IRAs. Your living trust can include real estate, bank accounts, stocks and bonds, personal property, and more. One of the main benefits of a living trust is that you can control – and use – your assets while you’re still alive.
If you were to become mentally incapacitated at some stage, your trustee could take over management of your assets, without the need for any court proceedings.
Revocable Living Trusts vs Irrevocable Living Trusts In Colorado
There are two main types of living trusts: revocable living trusts and irrevocable living trusts.
You can change or dissolve a revocable living trust anytime you want during your lifetime. An irrevocable living trust, on the other hand, is incredibly hard to change and becomes permanent as soon as its executed. Which one is better for you? We can talk about your specific desires and needs, look at the big picture of your estate planning, and make a recommendation.
Avoid Probate And Keep Your Wishes Private With A Living Trust
A living trust allows you to avoid probate in Colorado, which can save time and money. You also maintain privacy when you set up a living trust to distribute your assets after your death. If you decide to create a will, (instead of a trust), after your death, your will becomes public record, according to Colorado law. If you die without a will, your estate will still go through probate and become public record. A living trust, however, is completely private. No one, except your trustee, needs to ever know how you chose to distribute your assets.
Dictate When Your Assets Are Distributed To Your Beneficiaries With A Living Trust
With a will in Colorado, your assets are turned over to your beneficiaries as soon as probate ends. But with a living trust, you can set timelines (and/or conditions) for when your beneficiaries receive your assets. This living trust feature can be particularly helpful if you want to leave assets to minors, but would prefer to wait until they reach a certain age or achieve certain milestones.
Living Trusts And Medicaid
It’s important to note that you can’t use a living trust to “hide” assets from Medicaid. When looking at eligibility, Medicaid factors in the assets in a living trust, so revocable living trusts don’t help with Medicaid planning. And if you’ve put assets in an irrevocable trust in the “look-back” period for Medicaid (which is five years), that could affect your Medicaid eligibility.
How To Set Up A Living Trust In Colorado
To set up a living trust in Colorado (revocable or irrevocable), in order to ensure that everything is done correctly, you should use an experienced estate planning and trust attorney. We can help you with all aspects of the living trust process, including planning, executing, and transferring ownership of all of your assets into the trust’s name.