Many Colorado couples have significant property and assets that deserve protection against excessive taxation and possible losses. Many commonly used estate planning tools can help to secure your financial legacy for heirs, protect your assets and even reduce your tax liability. Here is a closer look at how to get such benefits.
Revocable trusts can adjust to life changes
A trust is a commonly used estate planning tool that transfers control of some assets into an account with a designated trustee. The trustee administers the trust account and provides a trusted outside party, who ensures that the assets stay protected and only are released upon terms outlined when the trust was created. Because the trust is revocable, you can amend it to reflect significant life changes and adapt to the changing situation.
Irrevocable trusts lock in protections
An irrevocable trust is similar to a revocable trust in that it has specific assets protected, beneficiaries named and a trustee administering the account. An irrevocable trust differs in that it cannot be amended and takes permanent control of assets. Those assets do not get released until specific conditions are met or a court intervenes. With either type of trust, the transfer of financial assets and real properties to one or more trusts can reduce tax liabilities for individuals.
Wills determine who gets what
Another important and commonly used estate planning tool is the last will and testament. The will is a legal document that tells a probate court exactly how specific assets should be distributed upon death of the benefactor. When properly drafted and given full legal authority, a will helps reduce confusion and internal family squabbles. It also speeds up the probate process after the benefactor’s death and the dispersal of relevant assets.
When you have financial, investment and real property assets to protect, an attorney experienced in Colorado estate law may explain the nuances of the many tools available. Whether you intend to protect property, reduce your tax liability or leave a significant financial legacy for others, an attorney may help you ensure that it will happen.