Lakewood, Colorado Elder Law And Estate Planning Law Blog

Colorado parents who have children with special needs may want to consider certain estate planning tools. For many families, a trust is the right vehicle to provide for kids with special needs.

Wealthy families who know their children will not need to receive government benefits can simply create a trust that has enough funds. For example, a trustee can be placed in charge of a discretionary trust. The income and principal can be used to support the child.

Comprehensive estate plans in Colorado might include a will, powers of attorney, medical directive documents or other planning instruments. In many cases, having a revocable trust can lend benefits both to the person who makes it, called the grantor, and to his or her heirs. When the grantor of a trust dies, the trust can be written to live on indefinitely, carrying out the instructions of the grantor. Where the grantor is also the trustee, the trust should be written to provide a new trustee on the grantor's death.

The assets held in a revocable trust pass outside of probate on the death of the grantor. This is an advantage that can save significant time and money for heirs. It also allows the transfer of trust assets to remain private as property that is probated is made part of the public record. Many families who don't want the transfers made public use revocable trusts.

Colorado residents who do not have any children or close relatives may feel that having an estate plan is not necessary. However, it is important for adults to have one, not only to specify what should happen to their assets when they die, but to also prepare for the unexpected while they are still alive.

Two important legal documents to have in an estate plan are a durable power of attorney for financial and legal decisions and an advance health care directive. Individuals can use these documents to ensure that someone they trust will be making those decisions on their behalf should they become incapacitated. Without these documents on file, there are decisions that even a spouse will not have the authority to make. Additionally, in situations in which individuals are incapacitated without having completed the documents, it will be up to the courts to designate someone to make those determinations.

Charitable trusts serve the dual function of being a valuable estate planning tool and a way to help those in need. At its core, a charitable trust is just a trust with a charitable purpose, but there are a few important differences that people need to consider before creating one. According to Colorado law, a charitable trust must benefit the community. This can include contributing to the relief of poverty, the advancement of education, the promotion of heath, and even governmental or municipal purposes.

A few rules that apply to normal trusts don't apply to charitable ones. Because these trusts are intended for the general well-being of the community, they don't require clearly defined beneficiaries. Instead, the trust must have a clear purpose whether it's to fund local hospitals or provide food aid to the poor. Charitable trusts are also allowed to exist into perpetuity.