Most people in Colorado do not need or want a trust. They are happy with a will which is inexpensive and works very well. So why create a trust? The following are a few reasons that may apply:
1. To shield assets from creditors. If you are at high risk and are willing to give up control, this may be a good reason.
2. Provide for a child or other loved one with a disability. This is one of the best reasons to create a trust.
3. Avoid probate and maintain privacy. Usually not compelling reasons for most of us.
4. Provide a caretaker for your assets if your heirs are not responsible. This is a great reason if your heirs cannot manage for themselves.
5. Make sure that your estate qualifies for all estate tax exclusions. Since the estate tax only applies to estates in excess of $5 million dollars, most of us do not need to worry about this one. If you are on the edge...maybe have a taxable estate or maybe not...this is a good thing to put into a will, to remind your heirs to be careful around this issue.
6. If your estate is worth more than $5 million dollars there are many opportunities to reduce estate tax and benefit charities. If you are fortunate to be in that situation, you should definitely explore the many opportunities.
Since many people think that they need a trust, consult this list to see if there is a valid reason to do so. If you have a reason that is not on this list, consult with your legal adviser to see if it makes sense.
Good luck in your estate planning endeavors.