Advantages and Disadvantages of Wills, Living Trusts and Probate
When developing your estate plan, you and your attorney will discuss what types of estate planning documents will best fit your needs in order to protect your assets and your family. This blog will outline the advantages and disadvantages of wills, living trusts and the Colorado probate process.
Advantages of Wills
- Relatively simple to create
- Allows the testator to leave assets to anyone they wish
- Can include care arrangements for children, pets, etc.
Disadvantages of Wills
- May be subject to probate and possible challenges regarding validity
- Can be subject to federal estate tax and income taxes
- Becomes public record which anyone can access
Advantages of Living Trusts
- Allows control of investments, property, assets and business interests while you are incapacitated
- Potentially could avoid probate if the trust is funded during your lifetime
- In most cases, is not filed with the Court so it does not become public record
- Potentially could help avoid estate taxes
- Allows the settlor to leave assets to anyone they wish
- Could avoid a protective person proceeding (Conservatorship) in the event you become incapacitated or disabled
Disadvantages of Living Trusts
- Costs more to create
- Costs more to administer, especially if the trusts creates additional trust(s) upon the settlor’s death
- May be subject to abuse or breach of fiduciary duty by the trustee because there is no probate and no court oversight
- If the trust is not fully funded during the settlor’s lifetime, probate may still be necessary upon the settlor’s death.
Advantages of Probate
- Assets can be gathered up and quickly administered by the Personal Representative
- Allows challenges to the estate distribution and creditor claims
- All creditor claims are closed one year after the Decedent’s death or after the publication of a Notice to Creditors which is 4 months after the Notice is first published
- Beneficiaries receive court protection and can request court oversight, if necessary
Disadvantages of Probate
- Can be a very lengthy and sometimes expensive process
- Probate estates are public record for anyone to see
- If there are any objections, a court makes the final decisions on the distribution of the estate
If you are deciding whether to create a will or living trust in Denver, the Denver estate planning lawyers at The Brown Law Firm LLC can help. Contact us at (303) 339-3750 or send us a message online to arrange a meeting to discuss your options.