Misconceptions About Estate Planning

Posted by: Dec 14, 2018By Brian Stutheit

In the December 2018 of the magazine for Colorado attorneys called Colorado Lawyer there is an excellent article entitled, “Five Common Client Misconceptions about Estate Planning.”  The misconceptions discussed are all on a general theme – avoiding probate is not always best and trusts are not always better than wills and probate.  Among the misconceptions the authors discuss are:

  1. Avoid Probate At All Costs.  The article talks about Colorado’s streamlined probate process, which is often less expensive and more efficient than probate avoidance techniques such as trusts.  Probate also gives heirs protections and rights to information that are lacking if party is transferred in another manner.
  2. Give Assets to Children During Life to Avoid Probate.  As soon as a child owns an asset, that asset can be reached by the child’s creditors.  A child who causes an auto accident could put the asset at risk.  It is also dangerous to assume that a child who receives property before the parent dies will share that property with his brothers or sisters.
  3.   A Revocable Trust is Better Than A Will.  Revocable trusts are not always simple.  They must address not only what happens to property after death, but also during the lifetime of the person creating the trust.  To use a trust to avoid probate, the person putting property into trust needs to monitor her assets.  If she acquires new property, but doesn’t retitle it into the trust, the whole goal of avoiding probate may fail.  Assets in a revocable trust have no greater protection against creditors than assets in an estate which is probated.

Anyone thinking about their what to do with his or her property after death should not assume that staying out of probate is going to be quicker, cleaner or cheaper.  Under some circumstances it can be safe and clean to avoid probate, but it can also cause problems.