There are several factors that an individual may need to consider prior to creating a trust in Colorado. An important question to ask is whether a trust is necessary to protect the assets within the estate. Generally, those who have more than $100,000 in assets should consider using a trust. Trusts are also good for those who want to protect a family business or want to provide for a disabled family member.
By placing assets into a trust, it may keep a disabled family member eligible for government assistance. Those who may have health issues themselves may decide to create a trust because the trustee can manage assets if the creator of the trust is unable to do so. As trusts are generally not subject to probate, it may be possible to distribute assets quickly. The cost of probate is estimated to be 5 to 7 percent of an estate's value on average.
It is important to note that assets in the trust must be in the name of the trust. Any assets outside of the trust at the time of an individual's death may be put into the trust via a pour-over will. A trust may be revocable, which means that it is possible to amend the trust at any point. However, there may be fees associated with making such a move.
A trust may be a shrewd way to control assets and create an effective estate plan for the present and for future generations. Trusts may make it possible to reduce estate taxes and provide more flexibility as to how assets are distributed. Anyone who is thinking about creating a trust may wish to speak to an estate planning attorney. An attorney may be able to help create and organize all necessary trust documents.
Source: CNN Money, "Estate planning: Is a trust beneficial?", November 17, 2014