Colorado residents thinking about the future of their assets and their family may be moved to create trusts to protect their property. By making use of a trust structure, individuals can plan for taxes, optimize their estate plans and provide specific mechanisms for the disbursement of their legacy in the years to come. However, trusts also require careful management and oversight, and one common mistake that people make when creating a trust is to turn to an inexperienced friend or family member to administer it.
People may wish to place a close friend or family member in charge of their trusts as an expression of their faith in them. While this faith can be well-placed, management of a trust requires not only good intentions and care but also commitment to fiduciary and legal responsibilities. Depending on the terms and the complexity of the trust, the trustee may need to make investment decisions, issue statements and account for the trust's assets.
Furthermore, the trustee can be held liable if they fail to govern the trust and its assets responsibly or appropriately. This could be a problem for trustees who are interested and trustworthy yet lack the knowledge and experience to deal readily with the obligations of the position. Depending on the specific needs of the trust, the grantor may be able to use a corporate trustee or divide the responsibilities so that a family member or friend provides their insight and close knowledge while a corporate partner handles the record-keeping and reporting responsibilities.
When setting up or revising trusts, an estate planning lawyer may help people create structures designed to provide for their families and protect their assets from excessive taxation. A lawyer may also help individuals draw up trusts that reflect their vision for the future of their assets.