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There are many reasons why someone planning an estate in Colorado will want to include a trust as part of that plan. If the estate has substantial assets, a trust can protect heirs and beneficiaries from estate taxes. If there is worry about dispute within the family about the distribution of assets, moving those assets into a trust can make it harder for your family members to change your intended legacy.
Trusts can also help you provide for a special needs child, a loved one with a serious addiction or spending problem, and even a charity that you support. The benefits and overall flexibility of trusts make them a great inclusion in many people’s estate plans.
However, choosing to create a trust is only the first of many critical steps. You will need to plan and structure the trust and then also fund it properly. One of the most important decisions with your trust, other than the specific structure you use, will be who you name as trustee.
Managing a trust requires dedication. A trustee may have to invest personal time for years or even decades. Although you can allocate assets to compensate your trustee, it’s important to know that the person is trustworthy enough to follow through with obligations regardless of compensation.
You also want to ensure that your trustee will be competent and organized enough to follow through with the directions you leave. An individual with difficulty handling complex tasks, no matter how well-intentioned, is likely not the right person to choose as trustee.
Finally, you want to appoint someone who will live significantly longer than you will. This may mean selecting someone who was born one or two generations after you, depending on how you wish the trust to end. Choosing a younger trustee helps ensure that there won’t be any issues with consistency in the future. Finding one individual who fits all of these requirements can be difficult, which is why you may need to think creatively.
Far too many people overlook the fact that you can name multiple people as trustee as the solution for not having one outstanding candidate for the position. Several individuals can share the responsibilities of managing one trust.
One individual could balance out the personality of another. You could also have a span of generations included to ensure that your legacy is properly handled and that there will be easy transitions in the future for your trust.
Whoever you choose as trustee, it’s important that you discuss your wishes with them now. You should also detail them carefully in your trust paperwork to ensure there is no confusion in the future.