By Myka Landry
A revocable living trust has often been promoted as a way to avoid probate with the idea being that probate should be avoided at all costs. However, this argument fails to take into account what actually happens in probate and what it takes to make a revocable living trust work effectively.
Colorado has adopted the Uniform Probate Code, which has streamlined the probate process and made it far more affordable than it used to be. While many actions must be taken during probate, the process is pretty straightforward.
A revocable living trust does not eliminate actions that must be taken after death. Property must still be distributed and creditors must be dealt with. In addition, in order to work effectively, a revocable living trust must be funded. That is, all assets must be retitled in the name of the trust. Any assets that are not titled in the name of the trust may be subject to probate. A revocable living trust is also more expensive to set up initially. Often, the initial expense more than offsets the cost of probate.
One situation in which a revocable living trust may make sense is if you own real property in another state. In that case, property will have to be probated in the state in which it is located, while the rest of your estate is probated in the state in which you live. Since probate laws vary greatly by state, this process may not only be difficult, it may be expensive as well.
Whether a revocable living trust makes sense for you depends on many things. It is important that you talk with a qualified estate planning attorney before making a decision as to what is right for you.