27th Sep 2014
A will typically passes property retained in the name of the decedent until death. As such, it usually requires probate filing with the court and consideration of creditor claims against the decedent’s estate and based upon statutory priorities. Unless there are significant creditor or heir disputes, probate in Colorado is not expensive and is short lived, e.g. typically a couple of weeks to have a Personal Representative appointed and another 30 days to distribute the estate and keep an inventory in case any interested party demands one. The estate usually cannot be closed for about 5 months after that due to required time after publication for any creditors to file claims. Most folks have wills but they often don’t come into play because all assets are jointly owned and/or bank accounts, insurance policies and investment accounts are payable on death to designated beneficiaries.
A trust is typically useful if there are special wishes or needs to hold rather than disburse funds and/or to treat beneficiaries or heirs differently. The trust usually provides for very specific direction about when, how and to whom distribution will be made. If you wish to distribute assets in a fairly simple way, you likely don’t need a trust. Additionally, a trust creates another level of title to property other than yourselves. Most folks want to keep it simple and want to have direct control of their property during their lifetimes. Finally, tax laws have significantly changed and are more friendly to direct distribution for most estates under $5 + million dollars. So, living trusts are not as much in vogue as they have been in the past. They are typically promoted at seminars by insurance companies or people who claim to be estate planners who in reality are trying to sell trusts and/or insurance. The very wealthy still have use for them but most other folks are wasting their money to set up an expensive structure for their demise.
You can set up a simple trust to specify how things are to be handled in your will itself and this is still often done where there are more complicated wishes about distribution to survivors. If you wish to set up either a living trust or a trust in your wills after reading this, we should talk at least by phone about how it should look.