March 08, 2010 - William L. Henry IV
The terms "revocable trust," "revocable living trust," and "inter vivos trust" are used to describe a type of trust where you transfer ownership of property (for example, money or real estate) during your lifetime to the trust. As the person creating the trust, you are called the grantor or settlor. The person that manages the property is called the trustee. You can be the trustee or you can appoint a bank or other person as a trustee. The trust is revocable, so that means you can revoke the trust at any time during your life.
Here are some common uses for a revocable living trust:
- Avoiding probate
- Holding property
- Disability planning
- Privacy
- Continuity of asset management
A revocable living trust does not provide any gift or estate tax planning, so it will not help you avoid tax at your death. In addition, probate costs under the uniform probate code (which Colorado has adopted) are generally not that expensive, so if you only goal is to avoid probate in Colorado, a revocable living trust may not be the best option for you.
Finally, a revocable living trust only provide limited asset protection. Because a revocable trust is self settled, creditors can generally look to the assets of the trust to satisfy any claims that they have against the grantor.
One of the biggest benefits of a revocable living trust occurs when you hold real estate in other states. When you die, you must open a probate action in both the state you die in and any state where you hold real estate, unless that property is in the revocable trust. Because opening multiple probate actions can be expensive, a revocable trust may be a good option if you hold real estate in several states.
Robinson & Henry has offices in Denver, Colorado Springs, and Castle Rock. Our estate planning attorneys can assist you with your wills, trusts, powers of attorneys, or probate matter. Contact one of our lawyers at (303) 688-0944 for a free consultation for your estate planning and probate matter. You may also schedule your appointment online by clicking here.