Colorado citizens who are thinking of going to the estate planning process have likely done a little research. One of the most common things that you’ll stumble across is a living will. It’s important to understand what a living will is and its various pros and cons so that you can determine whether or not this is a valuable aspect to include in your estate planning process.
What is a living trust?
A living trust is a legal document that a person can create to transfer various assets into an entity known as a trust. These trusts have a designated trustee and a designated manager. The trustee is the beneficiary of the trust who obtains ownership of the assets in the trust upon the grantor’s passing. The designated manager may be the grantor or the trustee, depending on what is stated in the trust documents.
What are the pros of a living trust?
You may want to create a living trust for a variety of different reasons. The first and most important is to avoid the probate process. When you have a living trust set up, the assets in it automatically transfer to the trustee upon your death. Another major benefit of a living trust is that they are revocable. This means that you may decide to change the beneficiary of the trust, or you may transfer the assets in the trust back into your own name if you so choose.
What are the cons of a living trust?
One of the biggest cons of a living trust is its cost. It tends to cost more to set up a revocable living trust than it does to simply write a will. Additionally, a living trust typically can be contested by a person with appropriate standing for up to five years in some states. This is much longer than the time period allowed for contesting a last will and testament.
A living trust may be a great component to help with your estate planning process. Before you set up a trust, it’s always a good idea to consult an attorney. They could help you plan out your entire estate plans and ensure that a living trust is within your best interest.