Drafting a strategically conceived Colorado trust can grant you serious power over your assets and your financial future, whether you’re a successful business owner, concerned parent or philanthropist.
A trust empowers someone to manage and distribute your assets according to your wishes to other people and institutions, such as charities you want to support. Here are six smart reasons to establish this kind of estate planning vehicle as soon as possible.
Reason #1: Avoid allowing your assets and estate to be subjected to a complex and costly probate process following your death.
For instance, assets that you would prefer go to beneficiaries might be taken to cover the costs of probate, such as inventorying, appraising, and distributing your assets.
Reason #2: A trust can help cover the expenses of a child’s education… and prevent an impetuous young adult from spending or investing the funds unwisely.
If you do not arrange a trust, for instance, your child beneficiary can receive a lump sum and use the funds casually. A trust can distribute the money in set payments, and it can mandate that the money be used for specific educational reasons – e.g. to pay for tuition, books, and school transportation.
Reason #3: Trusts can help you specifically itemize which beneficiaries will get what assets under what conditions – in other words, they can give you powerful control over future events and protect relationships.
A properly structured trust can prevent fighting among loved ones, set smart conditions on the use and investments of assets in trust, and anticipate and prepare for certain contingencies with respect to the distribution of those assets.
Reason #4: A trust can help protect your assets from being seized by a divorcing spouse or by creditors.
For instance, an irrevocable trust can prevent a spouse, who has been named as a beneficiary, from seizing assets during or after the divorce.
Reason #5: Establishing a trust can give you peace of mind regarding financial issues and long term planning.
You still, however, need to update and maintain your trust in order to ensure that it follows all updated tax laws and legal requirements and that it continues to reflect your wishes and values.
Reason #6: Setting up a trust can help you avoid paying certain taxes and fees on assets.
Setting up an irrevocable trust, for example, relieves you of tax obligations, since you technically no longer own the assets in trust. (That being said, when you reduce your assets, you could negatively influence your ability to establish lines of credit.)
Our Colorado trust attorneys would be happy to discuss your needs and help you draft or amend effective documents. Call or email us today to set up a free consultation.