Personal Finance (Not Investing) • Estate Plan in Colorado - Will v Trust?

There are many more important issues to consider in your estate planning.

If you're considering revocable trusts, since (as you pointed out) Colorado is not a commuity property state, unless your assets are community property (for example, if you moved to Colorado from a community property state), you would have separate revocable trusts. Will the lawyer give you two revocable trusts for the same fee as no revocable trusts? If not, since Colorado is a Uniform Probate Code state (which means simplified procedures), is there some particular reason for revocable trusts in your case?

About 30 years ago, the late Paul Fletcher, a lawyer in Oregon, wrote a few articles suggesting that a joint revocable trust in a common law state would allow you to use the same assets to fund the credit shelter trust regardless of which spouse died first, and that you would also get a basis step-up regardless of which spouse died first. Others wrote articles taking the opposite view. The IRS issued a few favorable rulings on the first point, though not on the second point. But after the Tax Court decision in Estate of Kwang Lee, no one thinks this works, and the IRS will no longer issue rulings on this. With the higher level of the exclusion amount and portability, the issue would rarely arise now.

There are many more important issues to consider in your estate planning. You should be spending more time considering them.

Do you have a theory on why so many seemingly well respected estate attorneys in non-community property states recommend joint revocable trusts? Are they all incompetent?

Statistics: Posted by Lee_WSP — Fri Mar 15, 2024 11:30 am — Replies 10 — Views 762