Do I Need a Living Trust?

Do I need a living trust?

There are two basic ways you can create your estate plan, using a Will as the foundation of the plan or using a Living Trust. But with all of the conflicting information on the internet, it’s hard to know which one is right for you.

Do I need a Living Trust, or would a Will be sufficient? That’s a question we hear a lot.

The answer? It depends on what’s important to you.

Living Trusts are easier for your loved ones

If you own a home and want to make things easy for your loved ones when you die, a Living Trust is the best way to accomplish that. Without a trust your family will need to go through probate.

Colorado probate is not a horrible monster, but it’s still not a party. It takes an average of 9-24 months, requires paperwork and meeting a number of legal deadlines, and may feel like a hassle. It also costs money, typically thousands of dollars for the lawyer and other costs.

Trusts allow you to manage money for your loved ones

In addition, a Living Trust allows you to manage money for your loved ones over time, making sure they don’t spend it all before they’ve matured, protecting them from future divorces, taking care of loved ones with special needs.

Living Trusts help with disability planning

If you are unable to manage your own affairs due to a stroke, brain injury, or dementia, a Living Trust ensures your Trustee will be able to pay your bills. Without a trust, your loved ones may need to petition the court for a conservatorship, and once the court gets involved it gets expensive and intrusive.

A Power of Attorney alone does not prevent court intervention because most banks and other institutions will only accept them for a year after they’re signed.

When is a Will enough?

If you own real estate and don’t mind having your family go through the hassle, expense, and intrusiveness of probate a Will might do just fine. If the short-term cost is more important than the long-term cost, you may need to use a Will. Trusts cost a little bit more to set up, but they typically save multiple thousands of dollars when you die.

Want more information on Wills versus Living Trusts, probate, or estate planning in general? Register now for one of our Webinars or Workshops.

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Author Bio

Catherine Hammond is the CEO and founder of Hammond Law Group, a Colorado-based estate planning law firm she founded in 2005. With a strong focus on protecting families from the legal consequences of disability and death, she creates comprehensive estate plans that minimize taxes, costs, and government interference.

A native of Denver, Catherine completed her undergraduate studies at Coe College in Iowa, and her Juris Doctorate from the University of Denver College of Law in 1993, concentrating on estate planning, tax, and mediation. Catherine is a member of various professional organizations, including WealthCounsel, ElderCounsel, the National Academy of Elder Law Attorneys, the Colorado Springs Estate Planning Council, and the Purposeful Planning Institute. Beyond her legal expertise, Catherine provides transformational coaching to support clients and their families through life transitions.

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