You have probably heard that a living trust offers many benefits. For example, the assets held in the trust typically do not need to pass through the Colorado probate process.
Two other benefits include security for you and your loved ones and the flexibility to change the trust whenever you like. Despite its many benefits, a living trust poses a couple of potential drawbacks as well. It is wise to be familiar with these when you set up your living trust.
Expensive to create
A living trust typically results in more setup expenses than a will for most people. For example, when drafting the document, you must work to ensure the final result captures your intentions accurately. You must also fund it by transferring assets out of your name and into the trust, another task that typically incurs more expenses.
Requires more maintenance
Each time your financial or family circumstances change, you may need to update your living trust accordingly. Examples of such situations include obtaining new assets, buying real estate and losing a family member named in the trust. You must keep up with maintenance to ensure the document continues functioning per your intent.
What is the solution?
You can minimize the possible downsides of a living trust by working with a practitioner familiar with Colorado estate planning, wills and trusts law. That way, you can reap the rewards of a living trust without experiencing significant disadvantages.
Before adding a living trust to your current plan, consider speaking with a professional. Together, you can discover estate planning tools that provide the most financial benefits and family protections.