According to a 2020 Estate Planning and Wills study by Caring.com, less than one-third (32%) of Americans have a will, trust, or estate planning document in place. Distributing the assets or settling the final affairs of the decedent involves several processes and details. Regardless of how big or small your estate is, having a properly drafted trust is crucial to protect your assets and loved ones, prepare for life’s uncertainties, and avoid the lengthy and costly probate process.If you’re trying to understand how to avoid your estate going through probate or how your trust will be administered upon your death, consulting with a knowledgeable Colorado probate attorney is crucial for detailed guidance. I can explain the benefits of having a trust and discuss your possible options to avoid probate. Duncan Legal PC is proud to serve clients throughout Centennial, Greenwood Village, Aurora, Littleton, Parker, Arapahoe County, Douglas County, Denver County, and Jefferson County, Colorado
What is Probate?
Probate is a court-supervised process whereby all the decedent’s assets are gathered and assessed, debts and taxes are paid, and heirs and beneficiaries are determined. The probate process is usually expensive, time-consuming, and extremely public.
Probate Process in Colorado
In Colorado, there are generally three types of probate administration:
- Small estates (under $70,000 and no real property): Assets are collected via an affidavit whereby heirs swear they are entitled to the property of the deceased and will distribute it to entitled heirs. Opening a probate action through the court is not required.
- Uncontested estates: When there is a valid will, no disputes, no disputes expected, and a qualified personal representative of the estate, the court allows an informal process.
- Contested estates: If a will is contested, thought to be invalid or unclear, or if significant challenges in administration are expected, the court may require a more formal probate process. In such cases, the personal representative of the estate may be required to obtain approval for every transaction.
The process for uncontested and contested estates takes at least six months but full administration of the estate generally takes much longer.
How Does Probate Affect Surviving Loved Ones?
Probate may affect your surviving loved ones in the following ways:
- The probate process is costly and time-consuming
- The court will freeze all estate’s assets until property distribution is finalized
- The probate process is extremely public
- There is a lack of control over the final outcome of the process
- All property will be subject to inheritance tax, state, and federal estate taxes
A trust is a fiduciary relationship that involves appointing a person (trustee) to handle your final affairs and distribute assets to beneficiaries or heirs. The trust usually contains all the decedent’s assets, including real estate property, business interests, investments, and bank accounts. Upon death, or if you suddenly become incapacitated, the appointed trustee intervenes and executes your estate administration in line with the trust’s provisions.
Trust Administration in Colorado
In Colorado, trust administration is governed by the Colorado Uniform Trust Code (CUTC), which can be found in Colorado’s Revised Statutes § 15-5-101. The trust administration process requires the trustee to:
- File documents with the county clerk
- Transfer the real estate property to beneficiaries of the trust
- Identify and collect all other trust assets
- Obtain a federal tax identification number for the trust
- Transfer asset title and trust accounts to their name as successor trustee
- Pay outstanding taxes and debts
- File the decedent’s last income tax returns
- Distribute the remaining trust assets to heirs and beneficiaries
How Does a Trust Affect Surviving Loved Ones?
Wills may be cheaper upfront but your estate and loved ones will still have to go through probate. Conversely, trusts require additional planning and may be pricier upfront but are designed to prevent your family from having to go through probate. Some other benefits of having a trust include:
- Helps avoid probate, thus, saving your surviving loved ones both money and time
- Allows you to name a successor trustee who will help manage your estate upon incapacitation or death
- Allows you to set certain conditions on how and when your assets should be distributed after your death
- Helps reduce estate and gift taxes
- Ensures that assets are distributed to heirs and beneficiaries efficiently without the publicity of probate court
With a trust, you can better protect your assets and property from creditors, taxes, and potential lawsuits.
Work with an Experienced Estate Planning Attorney
Having a trust helps your surviving loved ones avoid the costly and time-consuming probate process after your death. Your family members can benefit from knowing your wishes when you are unable to voice your opinion. An experienced Colorado trust administration attorney can help you decide the ideal estate planning option that best suits your needs.At Duncan Legal PC, I have dedicated my career to offering experienced legal guidance in matters of estate planning, probate, trusts, and wills. As your attorney, I will evaluate your unique situation and explain your available options. I will provide you with the detailed guidance you need to draft a trust and avoid the entire probate process.Call Duncan Legal PC today to schedule a free one-on-one case assessment with a knowledgeable Colorado probate and estate planning attorney. I can offer you the comprehensive legal counsel and advocacy you need and help you navigate key decisions. I’m proud to serve clients across Centennial, Greenwood Village, Aurora, Littleton, Parker, Arapahoe County, Douglas County, Denver County, and Jefferson County, Colorado.