Living trusts are becoming more and more popular now that many people realize they’re the only surefire way to guarantee that your assets are managed according to your wishes no matter what happens. While many understand the importance of creating a living trust for themselves, others continue to deny the many advantages that can be derived from creating a living trust.
It’s time to stop delaying the inevitable and instead get to work managing your finances. Here’s how to create a living trust in the state of Colorado and what common mistakes to avoid as you do so.
There are different types of trusts
The first thing you need to understand about creating a living trust is that there’s no one-size-fits-all solution to the problem of financial security and asset management. There are different types of trusts, and they don’t all behave in the same way. Your first step will thus be to analyze the different types of trusts to determine which is the best for your specific situation. There’s a single trust that works well for individuals who are only concerned about their personal assets, for instance, and a joint trust, which is usually preferred by married couples who share assets like their automobiles and homes.
You should never be afraid to take a deep dive into the differences between single and joint trusts if you’re not entirely clear on their meaning. Only after you’ve arrived at an understanding of which one will work the best for you can you proceed to the actual process of creating trust. Once you’ve figured out which option you’re going with, conduct a comprehensive review of your property and assets to determine exactly what you have to give away to others in the first place.
Physical property like your family home or automobile aren’t the only things that trusts cover; you’ll also want to analyze your financial accounts and include any stocks or similar assets you have, too. One of the difficulties of creating a living trust is ensuring that you’ve included everything that’s important to you, so don’t be afraid to take your time during this part of the process, as not including something can come back to haunt you and your loved ones in the future if it’s of great value either financially or sentimentally.
Now you’re entering the most important parts of the process; designating a trustee and a beneficiary, or the two people who will be the most important members of the trust outside of yourself. The trustee is the individual you’re designating as being in charge of your possessions – you can technically choose yourself but be aware that you may want to appoint a successor trustee in the event of an untimely passing. Your beneficiary, as the name implies, is the individual slated to actually receive your assets when the trust takes effect.
A revocable trust?
The term “living trust” is really just a casual way of referring to what’s legally known as a “revocable trust.” What does the “revocable” part of a revocable trust mean, anyway? Revocable trusts are flexible and can be easily changed; the grantor maintains ownership of the property and can “revoke” the trust at any time, effectively cancelling it. An irrevocable trust, on the other hand, is unchangeable once it’s been signed, and the property you place within the trust will be untouchable from that moment onwards.
Living trusts are becoming more popular these days because people like to retain some semblance of control over their affairs even once they’ve created a trust. It’s thus worthwhile to peruse some downloadable living trust forms for the state of Colorado, as these can help you understand what your actual legal documents will look like when you’ve completed them.
After you’ve filled out the relevant information, established your beneficiary and trustee, and have the documents signed before a public notary, you can begin to rest assured of your future financial stability. With a living trust in-hand, your family will never have to undergo a lengthy legal process to argue over who gets access to your assets if you pass away or become incapacitated. With this peace of mind, you can now focus on enjoying your life like never before.
