Colorado Trust Attorney Services
Do You Need a Will, Power of Attorney, or Trust?
Planning for your and your family’s financial security begins with an estate plan that addresses both the expected and the unexpected. How you protect certain assets, set aside real property, or provide for the continuity of your business can impact taxes, whether you qualify for Medicaid benefits should you become ill, and whether your heirs encounter legal difficulties regarding the family business.
Should you become incapacitated and unable to make decisions for yourself, a will or health care directive can ensure that the right ‘end-of-life’ decisions are made on your behalf. At the Law Office of Josh Krieg, we help clients create estate plans that help reduce uncertainty associated with the future. While you can’t always change what will happen, you can protect those important to you by planning for the future through careful estate planning, such as creating a detailed will, exploring trust planning, and understanding all your options.
Trusts
A trust is a fiduciary arrangement that provides for a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts are typically more complex and expensive than wills. Wills include instructions for distribution, whereas trusts include instructions for retention, administration, and distribution. Types of trusts include:
- Revocable Trusts
Revocable trusts are created during the lifetime of the trust maker and can be altered, changed, modified, or revoked entirely. Often called a Living Trust or “Inter Vivos” Trust, a revocable trust is most helpful in Colorado for control of property located outside of the state, tax planning, privacy, and flexibility. In some states, a revocable trust is a useful means of avoiding probate; however, in Colorado, the probate process is relatively efficient and inexpensive. - Irrevocable Trusts
Irrevocable trusts cannot be altered, changed, modified, or revoked after their creation. Once a property is transferred to an irrevocable trust, only the trustee can remove property from the trust. Irrevocable trusts must be designed properly with specific guidelines that are carefully followed. An example of an irrevocable trust is one designed to hold survivorship life insurance (an ILIT – Irrevocable Life Insurance Trust), which may help reduce the size of your estate (and tax liability) and protect the cash flow of your insurance policy from creditors seeking to settle debts. - Living Trusts
Living trusts are created for the purpose of estate planning while an individual is still living. Living trusts – both revocable and irrevocable – avoid probate of the property they hold because the trust entity (not the decedent) technically owns that property. A living trust designates a successor trustee to administer trust property upon the death or incapacity of the initial trustee/settlor. - Testamentary Trusts
Testamentary trusts are those funded at death and often continued within a will. A testamentary trust is sometimes referred to as a “trust under will” or simply a “will trust.” You may design the terms of the trust during your lifetime, but the trust is not established until after death, during probate. A testamentary trust may be helpful to:- Preserve assets for children from a previous marriage
- Protect your spouse’s financial future by providing lifetime income
- Ensure that a special needs beneficiary will be taken care of
- Prevent your children from receiving their inheritance before they are ready
- Leave a portion of your estate to heirs other than your surviving spouse
Trusts can serve several important functions, including:
- Planning for your possible disability
- Avoiding probate
- Facilitating the use of estate tax exclusions
- Planning for your current or former spouse
- Making special lifetime provisions
To create a valid trust, there must be an ascertainable beneficiary, a named or appointed trustee, a present and existing property, and intent by the settler to create a trust. Additionally, the settler must have the intent and the capacity to create the trust. If you have any questions about the creation of a new trust or the modification of an existing trust, please fill out the contact form below, call 970-420-7491 or reach out at office@jkrieglaw.com.