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.
Colorado residents who want to make changes to a trust might wonder whether it would be better to amend the trust or create an entirely new one. First, they should make sure it is possible to amend the document. Most living trusts can be either amended or revoked.
Some Coloradoans want to leave money to benefit the public through charity. This can be done by establishing charitable trusts. These types of vehicles are established in order to help with poverty, to advance education, to benefit health, or for other charitable purposes.
Decanting a trust refers to creating a second trust to revise the terms of an irrevocable trust. Under the original terms of an irrevocable trust, the assets are moved completely out of the control of the grantor and the trust cannot be altered or canceled. However, 25 states now allow decanting of an irrevocable trust, and Colorado is one of them.
Estate planning requires people in Colorado to consider their goals carefully. In some cases, a living trust, also known as a revocable trust, achieves the desired level of asset protection and distribution, but the document also require trustees to administer its terms. A trust for a married couple might name the spouses as the trustees, but the document must name successor trustees who take over after the original trustees have passed away or otherwise become unable to serve.
Residents of Colorado may be curious about the options available that can prevent a family home from going into probate. Among the many trusts available for estate planning, one type is specifically designed to both reduce the estate's value and provide a partial shield against the gift tax. The qualified person resident trust protects against home appreciation and provides a method for the early transfer of assets to beneficiaries.