When most people hear the phrase, “estate planning,” they first think about wills. However, a will is not the only strategy available to you, and a trust may even be a better strategy. There are several advantages that a trust can have over other strategies, such as a will, relying on joint tenancy, beneficiary designations, and others. One advantage is that a trust offers you comprehensive control of your assets in the event of mental incompetence/incapacity or after you pass away.
Probate Avoidance
Trusts avoid probate, while wills never do. Fortunately in Colorado, probate is both inexpensive and efficient, and there is little reason to avoid probate. Probate is the process of administering your will. It is a public process and supervised by a judge. Most of the time, the court will enforce your will’s provisions of who gets what. Probate does take several months, but that is a relative short period of time, especially when compared with states other than Colorado. For those individuals and couples who place a premium on their privacy or who own real estate outside of Colorado (which would force you to open probate in those states as well), a trust may be a preferred option because it avoids probate.
Trusts Manage Your Assets Over Time
One of a trust’s major advantages is that it allows you to provide a financial structure for children or loved ones who struggle with money. This may be because of debt, manipulative influences, bad spending habits, addictions, or other reasons. Because the trust controls your assets after you pass away, your loved one cannot spend all their inheritance or accidently make their inheritance vulnerable to others around them. It can also motivate your loved ones to make positive decisions in their lives that will help them become the adults you want them to become. If a loved one relies on government aid to help make ends meet, a certain kind of trust can also help prevent disqualification from that aid.
If you are ever unable to make decisions for yourself, the trust also helps take care of you by managing your assets. This can be incredibly helpful in situations of chronic illness or sudden injury and can protect you from court influence and the resulting loss of control.
Final Thoughts
Trusts are incredibly flexible tools that provide you control over time, give you privacy, and allows you to customize how you treat your loved ones based on their life situation. Trusts allow you to encapsulate your values and morals and find ways to express them to your loved ones down through the generations. To start the conversation to see if a trust makes sense for you, contact The Rains Law Firm or schedule a complimentary initial meeting.