Why Putting Property in a Trust Might Be the BEST Move for Your Estate Plan

Imagine a future where your loved ones avoid the stress, delays, and costs of probate, where your wishes are honored seamlessly, and your legacy is protected from unnecessary risks.

That’s the power of putting your property in a trust. It’s not just about transferring assets—it’s about building a plan that prioritizes privacy, control, and peace of mind.

If you’ve ever wondered whether a trust is worth it, this might be the most important estate planning decision you’ll ever make. Let’s break down why it could be the smartest move for your future.

Understanding Trusts: The Basics

Let’s quickly review what a trust is. A trust is a legal arrangement where you (the grantor) transfer ownership of your assets to a trustee who manages these assets for the benefit of your chosen beneficiaries. There are various types of trusts, but for property, we often recommend revocable living trusts.

Why Put Property in a Trust?

1. Avoid Probate

One of the primary reasons to put property in a trust is to avoid probate. Probate is the legal process of validating a will and distributing assets after someone passes away. It can be time-consuming, expensive, and public. When you put property in a trust:

• It’s not subject to probate
• Your beneficiaries can receive their inheritance faster
• You maintain privacy about your assets and beneficiaries

2. Maintain Control

With a revocable living trust, you can:

• Retain control of your property during your lifetime
• Make changes to the trust as needed
• Decide how your assets will be managed if you become incapacitated

3. Provide for Minor Children or Dependents

Trusts offer flexibility in providing for minor children or dependents with special needs:

• You can specify at what age children receive their inheritance
• Set up special needs trusts to provide for dependents without jeopardizing their eligibility for government benefits

4. Protect Assets

While revocable living trusts don’t provide asset protection during your lifetime, they can:

• Protect assets for your beneficiaries from creditors or divorcing spouses
• Shield assets from beneficiaries who might not manage money well

5. Reduce Estate Taxes

For high-net-worth individuals, certain types of trusts can help reduce estate taxes, ensuring more of your wealth passes to your beneficiaries.

6. Real Estate in Multiple States

If you own property in multiple states, putting them in a trust can help your estate avoid multiple probate proceedings.

7. Privacy

Unlike wills, which become public record during probate, trusts remain private. This can be crucial if you:

• Value your family’s privacy
• Have complex family dynamics
• Want to avoid potential challenges to your estate plan

Should You Put Your Properties in a Trust?

While trusts offer many benefits, they’re not always necessary for everyone. Here are some factors to consider:

When a Trust Might Be Right for You:

1. You own significant assets: If your estate is large enough to potentially incur estate taxes, a trust could be beneficial.
2. You own property in multiple states: This can help avoid multiple probate proceedings.
3. You have minor children or dependents with special needs: Trusts offer more control and protection than a simple will.
4. You value privacy: If you want to keep your estate matters private, a trust is a good option.
5. You want to avoid probate: If you have concerns about the time and cost of probate, a trust can help bypass this process.
6. You want control over asset distribution: Trusts allow you to set specific terms for how and when your beneficiaries receive their inheritance.

When a Simple Will Might Suffice:

1. Your estate is relatively small: If your estate is below the estate tax threshold and probate in your state is relatively simple, a will might be enough.
2. You don’t own real estate: If you don’t own a home or other real estate, probate might be less complex.
3. You have a straightforward inheritance plan: If you’re leaving everything to your spouse or dividing assets equally among your children, a will might be sufficient.

Steps to Put Your Property in a Trust

If you decide that putting your property in a trust is right for you, here’s a general overview of the process:

1. Choose the right type of trust: Work with an experienced estate planning attorney to determine the best type of trust for your situation.
2. Create the trust document: Your attorney will draft the trust document, which outlines the terms of the trust.
3. Transfer property to the trust: This involves changing the title of your property from your name to the name of the trust.
4. Fund the trust: Ensure all intended assets are properly transferred into the trust.
5. Manage the trust: As the grantor and likely initial trustee, you’ll manage the trust assets as outlined in the trust document.
6. Review and update regularly: Life changes, and so should your trust. Regular reviews ensure your trust continues to meet your needs and goals.

Potential Drawbacks of Putting Property in a Trust

While trusts offer many benefits, it’s important to consider potential drawbacks:

• Initial cost: Initially, setting up a trust can be more expensive than creating a simple will. However, it’s less expensive in the long run.
• Refinancing challenges: If you refinance your property, you’ll need to move your property out of the trust and then back in. The title company or your attorney can do this for you.
• Potential for mistakes: Improperly set up or funded trusts can cause issues down the line. Work with an experienced attorney to ensure your plan trust works properly.

How Hammond Law Group Can Help

At Hammond Law Group, we help Colorado families harness the power of estate planning, including determining whether a trust is right for your situation. Our experienced attorneys can:

• Assess your unique situation and goals
• Recommend the most appropriate type of trust (if needed)
• Draft comprehensive, legally sound trust documents
• Guide you through the process of funding your trust
• Provide ongoing support to ensure your trust continues to serve your needs

We believe in building long-term relationships with our clients, ensuring your estate plan evolves as your life does.

Start Planning Your Future Today

Deciding whether to put your property in a trust is an important decision that can have significant implications for your estate plan. While trusts offer many benefits, they’re not necessary for everyone. The key is to work with experienced professionals who can guide you to the best solution for your unique situation.

At Hammond Law Group, we’re committed to helping you make informed decisions about your estate plan. We’ll take the time to understand your goals, explain your options in clear terms, and help you implement the best strategy for your needs.

Don’t leave your legacy to chance. Start planning for your future today. Contact Hammond Law Group to schedule a consultation and begin crafting your comprehensive estate plan. Together, we can ensure your property and other assets are protected and distributed according to your wishes.