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What you need to know about a revocable living trust

If you have not considered a revocable living trust for your Colorado estate, now may be a good time. Many people are well aware of who they plan to pass their estate and assets on to when they die. If that is the case with you, a living trust might make things easier for both you and your heirs.

A trust is basically a contract between the owner of the estate and the trustee to manage and care for the estate. The trust can include property, funds and other assets.

What is a revocable living trust?

A revocable living trust, also known as an “inter vivos” trust, allows the owner (trustmaker) to also be the trustee while they are living. This means the owner can designate what happens to the estate when they die. However, while they are alive, they can still own and manage the estate.

What are the advantages of a revocable living trust?

When the trustmaker dies or becomes incapacitated, unlike a will, a trust does not have to go through probate. The trust includes instructions for how the estate is to be divided, disbursed or managed. The trustee named in the trust is responsible for following those instructions.

A second advantage is that a revocable living trust can be amended or completely revoked at any time by the trustmaker while they are still living. Once the trustmaker dies, the trust becomes irrevocable.

Who are the parties involved in a revocable living trust?

The trustmaker is the person who creates the trust. The trustee is the person who administers the assets per the instructions included in the trust. There can be multiple trustees assigned to administer different parts of the trust. A successor trustee is usually named as a backup to the original trustee if he or she is unable or unwilling to fulfill their role. Beneficiaries are named in the trust the same as they are in a will.

Creating a living trust should not be done on your own. Trusts are very complex and must be properly established to be legal and binding. Your attorney can advise you on what type of trust fits your situation best.

Source: Colorado Bar, “Living Trusts,” accessed March 22, 2018