Can a Trustee Revoke or Amend a Revocable Trust in Colorado?

By Heather Frances J.D.

If you are looking for a way for your estate to avoid the costs and complications of a court-supervised probate process after your death, a revocable trust could help. When you put all your assets into a Colorado revocable trust, or living trust, the trust safeguards those assets and pass directly to your beneficiaries upon your death. Revocable trusts give you flexibility because you retain authority to amend or revoke them.

Revocable Vs. Irrevocable

The basic structure of trusts is the same from state to state; two major types of trusts are known as revocable and irrevocable. As the names suggest, a revocable trust is not necessarily permanent and can be revoked or amended. However, a revocable trust does not have all of the same tax or other benefits of an irrevocable trust. An irrevocable trust is more difficult to amend or revoke since irrevocable trusts remove much of your ability to control the property in the trust. It is this restrictive nature that gives an irrevocable trust additional benefits, such as protection from your creditors.

Grantor’s Role

As the creator of a Colorado revocable trust, you are called the grantor, and a grantor typically also acts as the trustee and beneficiary of revocable trust. This means you create the trust, manage the trust’s property and benefit from the property’s income. Thus, you maintain full control over the property you place in the trust and can revoke or amend the trust at any time while you are competent to do so. The trust becomes irrevocable when you die or become incapacitated, meaning it cannot easily be changed when these circumstances occur.

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Redistributing Assets

As the grantor, you decide what property goes into the trust. With a revocable trust, you can transfer property in and out of the trust without terminating the trust. When you place property into your trust, title to that property transfers into the trust’s name so your name is no longer on the title. Thus, if you do terminate the trust, its assets must be reassigned. For example, you can put the trust’s assets back into your name or place them into another trust.

Successor Trustee

In your trust documents, you can name a successor trustee to take over the management of your trust when you become incapacitated or die. Your trust documents can also provide instructions to your successor trustee on how he should manage the trust’s property to meet your support and maintenance needs while you are alive. Your successor trustee must comply with your trust’s terms and purposes, including terms about how the trust should be terminated. For example, many living trusts direct the successor trustee to distribute the trust’s assets to named beneficiaries upon your death, thereby terminating the trust.

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References

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Grounds for Breaking a Living Trust

Trusts have a reputation as being only for rich folks and providing for beneficiaries from the cradle to old age. However, anyone planning his estate can create a trust to hold as much or as little property as he likes -- and it can last as long as he decides it should. Although some trusts are ostensibly forever, others are not. Breaking one depends on who is undoing it, the type of trust it is, as well as state law.

Living Trusts & Bank Accounts

You can place your bank accounts and other assets in a living trust so they bypass probate when you die. Avoiding probate generally saves time and money for the beneficiaries of your estate. You must physically change the titles of your assets from your individual name to the name of your trust for them to skip the probate process upon your death.

How Does a Living Trust Protect Assets?

Creating a trust to holds assets can help the grantor while he is alive and continue to serve him after his death. A living trust is created during the grantor's lifetime. It transfers title (ownership) of the grantor's property into the trust to be managed by a trustee for the benefit of a designated beneficiary. There are different types of living trusts and each can protect assets in a different way -- or not at all.

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