For Colorado homeowners, transferring your property into a revocable living trust is a crucial step that ensures your home’s value and legacy are protected. At The Law Office of Kevin R. Hancock, we guide our clients through this essential process with precision and care.

Understanding “Funding” Your Living Trust

“Funding” a revocable living trust refers to the process of legally changing the title ownership of your assets from you to your trust. If assets are not properly transferred into the trust, they may still be subject to probate upon your passing, negating one of the primary benefits of having a revocable living trust. Since your home is often your most valuable asset, making its proper transfer into your living trust is paramount for your estate plan’s success.

Step-by-Step: Transferring Your Colorado Home into Your Living Trust

The process of transferring real estate into a living trust in Colorado primarily involves drafting and recording a new deed. Here’s a breakdown of the key steps:

Step 1: Obtain Your Current Property Deed and Legal Description

Before you can transfer your home, you will need the exact legal description. This can be found on your current property deed, which should be on file with your county clerk and recorder’s office where your property is located.

Step 2: Prepare a New Deed (Quitclaim or Special Warranty Deed)

To transfer your home into your living trust, you’ll need to prepare and sign a new deed. In Colorado, common deeds used for this purpose include a Quitclaim Deed or a Special Warranty Deed.

• Quitclaim Deed: This type of deed transfers whatever interest you currently have in the property, without making any guarantees about the title. It’s often used for transfers between related parties or where no money is exchanging hands, such as when you transfer property from yourself to your trust (where you are essentially transferring it to yourself as trustee).
• Special Warranty Deed: This deed offers a limited warranty, guaranteeing that no title defects arose during the period you owned the property, but not before. Some attorneys prefer this for trust funding to maintain a clearer chain of title.

The new deed will name you as the “Grantor” (the current owner transferring the property) and your revocable living trust as the “Grantee” (the new owner). The Grantee’s name should be the name of your Trust as it appears in your trust document. For example, “The John A. Doe Revocable Living Trust, dated [date of the Trust]”. It is important to include the date the trust was created because it is part of the full name of the trust to distinguish it from any other trust of the same or similar name.

The deed must also include:

• The full legal description of the property.
• The current owner(s) name(s) exactly as they appear on the previous deed.
• The mailing address of the new owner (which will be the trust’s address, often your own).
• A statement of consideration (often $1.00 for trust transfers as no money changes hands).

Step 3: Sign the New Deed Before a Notary Public

Once the new deed is accurately prepared, all current owners listed on the property’s title must sign it in front of a licensed notary public. The notary will then notarize the signatures, verifying their authenticity.

Step 4: Complete a Real Property Transfer Declaration (Form TD-1000)

In Colorado, a deed transferring real estate into an entity, including a revocable living trust, must be accompanied by a Statement of Authority. The purpose of the Statement of Authority is to notify the clerk and recorder (as well as the rest of the world) that the trust exists, where its principal address is, and who are the Trustees with authority to transfer title in and/or out of the revocable living trust.

Step 5: Record the Deed with the County Clerk and Recorder’s Office

After the deed is signed, notarized, and the Statement of Authority is completed, the final crucial step is to record the deed with the clerk and recorder’s office in the county where the property is located. Recording the deed makes the transfer a matter of public record and legally establishes the trust as the new owner of the property. Remember, you will need to send a check for the filing fee to the clerk and recorder along with the deed and statement of authority (currently, $43 per document, which the deed and statement of authority are each considered separate documents).

Important Considerations When Transferring Your Home:

• Mortgages: If your home has a mortgage, transferring it to a living trust generally will NOT trigger the “due-on-sale” clause common in many mortgages, thanks to federal law (the Garn-St. Germain Depository Institutions Act of 1982). This law prevents lenders from calling a loan due when residential property is transferred to a revocable living trust where the borrower remains a beneficiary of the trust.
• Property Taxes: Transferring your home to a living trust typically does not affect your property taxes in Colorado, as the beneficial ownership of the property does not change (you still control and benefit from the property).
• Homeowner’s Insurance: You should notify your homeowner’s insurance company about the change in ownership to ensure your policy remains valid and your home is fully protected under the trust’s ownership. Typically, this just means adding the Trust as a named insured under your home owners insurance policy.

Why Expert Guidance is Essential

While the steps to transfer your home to your revocable living trust might seem straightforward, the legal nuances of property transfer, especially as they relate to estate planning, can be complex. Incorrectly drafted or recorded deeds can lead to significant problems down the road, potentially triggering probate or complicating future transactions. 

The Law Office of Kevin R. Hancock has extensive experience with Colorado real estate transfers and revocable living trusts, providing the expertise necessary to handle your property funding accurately and efficiently. We make sure all legal requirements are met, giving you confidence that your home is protected and your wishes will be honored without unnecessary legal hurdles for your family.

Don’t leave the funding of your living trust to chance. Contact The Law Office of Kevin Hancock today to ensure your Colorado home is properly transferred into your trust, securing your legacy and peace of mind.

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As a parent of young children, you’ve likely thought about how to protect and provide for them if the unexpected happens. While these thoughts can be difficult, creating a trust is one of the most effective ways to ensure your children’s financial future is secure. At The Law Office of Kevin Hancock, LLC, we specialize in helping Colorado families establish trusts for peace of mind and long-term protection for their young children and loved ones.

Why Trust Planning is Essential for Young Families

When you have young children, it is crucial to plan for their future. A revocable living trust allows you to protect and manage your assets for your young children in case the worst happens by providing: 

1. Financial Security: A trust ensures your children’s financial needs are met, covering expenses like education, healthcare, and daily living costs.
2. Avoiding Probate: Assets held in a trust bypass probate, making funds available faster and reducing legal complications and costs.
3. Customized Distribution: You can set conditions for when and how your children receive their inheritance, such as reaching a certain age or achieving specific milestones.
4. Protection from Mismanagement: A trust allows you to appoint a trustee who will manage the funds responsibly until your children are old enough to handle them.

How to Structure a Trust for Young Children

When creating a trust, it is essential to consider these key details to ensure it aligns with your family’s needs.

Appointing a Trustee

The trustee plays a critical role in managing the trust. Choose someone who is responsible, trustworthy, and financially savvy. You can also consider a professional fiduciary or trust company to handle the trust.

Setting Distribution Terms

You decide how and when your children will receive their inheritance. For example:

• Distribute funds in stages, such as at ages 25, 30, and 35.
• Provide lump sums for specific purposes, like education or purchasing a home.
• Allocate regular payments to cover ongoing expenses.

Include Contingencies

Life is unpredictable, so your trust should include contingencies for scenarios like the trustee’s incapacity or the addition of new children to your family.

Updating Your Trust as Your Family Grows

A trust is not a “one-and-done” document. As your family grows and your circumstances change, your trust should evolve too. For example:

• Add provisions for new children.
• Update beneficiaries and trustees if your preferences shift.
• Adjust asset allocations to reflect changes in your financial situation.

At The Law Office of Kevin Hancock, LLC, we encourage regular reviews of your trust to ensure it continues to meet your family’s needs.

Plan Today for Peace of Mind Tomorrow

Trust planning is one of the best gifts you can give your young children. It ensures their financial future is secure, even in your absence, and gives you peace of mind knowing they’ll be cared for. At The Law Office of Kevin Hancock, we’re here to help Colorado families create customized trust plans that protect what matters most.

Call or fill out our online form to start planning for your children’s future. Your family’s security begins with the right plan.

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1. Failing to Transfer Assets into the Trust

One of the most common mistakes people make after creating a living trust is not properly transferring their assets into it. While the trust itself is a powerful tool, it’s ineffective if your property remains outside it. To avoid probate, assets such as your home, vehicles, financial accounts, and investments must be retitled in the name of the trust.

Tip: Work with an experienced attorney to ensure all your assets are correctly transferred and recorded. This is especially critical for real estate, which often requires filing a new deed with the county clerk.

2. Not Updating Beneficiary Designations

Tip: Review and update your beneficiary designations when creating your trust and after significant life events, such as marriage, divorce, or the birth of a child.

3. Neglecting to Update Your Trust Over Time

A living trust isn’t a “set it and forget it” document. Life changes—such as acquiring new assets, relocating, or changes in family dynamics—can impact your trust’s effectiveness. Failing to update your trust to reflect these changes may result in outdated provisions or omitted assets.

Tip: Schedule periodic reviews of your trust with your attorney to ensure it remains accurate and up-to-date. At The Law Office of Kevin Hancock, we’re here to help you navigate these updates as your life evolves.

4. Overlooking Digital Assets

In today’s digital age, assets like online banking accounts, cryptocurrency, and social media profiles often go unaddressed in estate planning. These digital assets can hold significant financial or sentimental value, but they may be inaccessible if not properly included in your trust.

Tip: Create a comprehensive list of your digital assets and include instructions for accessing them. Consider using a password manager to streamline this process.

5. Choosing the Wrong Trustee

Your trustee plays a crucial role in managing your living trust, so selecting someone trustworthy and capable is essential. Choosing the wrong trustee—such as someone who lacks financial knowledge or is prone to family conflicts—can create challenges for your beneficiaries.

Tip: Choose a trustee who is organized, responsible, and impartial. If you’re unsure who to select, a professional fiduciary or trust company may be a good option.

6. Ignoring Tax Implications

While Colorado doesn’t have an estate tax, federal tax considerations may still apply, especially for high-value estates. Neglecting to address these potential tax implications can result in unnecessary costs for your beneficiaries.

Tip: Consult an attorney who understands both Colorado and federal tax laws to structure your trust in the most tax-efficient way.

7. DIY Estate Planning

Creating a living trust may seem straightforward, but attempting to do it yourself using online templates can lead to costly mistakes. Every family’s situation is unique, and a one-size-fits-all approach often leaves gaps in your plan.

Tip: Work with a trusted attorney who can tailor your living trust to your specific needs. At The Law Office of Kevin Hancock, we’re dedicated to ensuring your estate plan provides the protection and peace of mind you deserve.

Start Your Living Trust with Confidence

A living trust is one of the best ways to protect your family and assets while avoiding probate. By sidestepping these common mistakes, you can ensure your trust works exactly as intended. At The Law Office of Kevin Hancock, we specialize in helping Colorado families create and maintain living trusts that offer security and flexibility for generations to come. Call us today or fill out our online form to take the next step in safeguarding your future.

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Life can be unpredictable, and preparing for unexpected medical situations is an important step in ensuring your wishes are respected. At The Law Office of Kevin R. Hancock, we guide individuals in Colorado Springs through the process of creating living wills (also known as advance medical directives) legal documents that clarify your preferences regarding end-of-life medical care when you are unable to make decisions for yourself.  Many people have strong opinions about the kind of treatment they would want in such scenarios, and advance directives provide the legal means to communicate those preferences clearly.

There are generally two types of end-of-life medical directives – (1) he Do Not Resuscitate (DNR) order and (2) the Living Will/Advance Medical Directive. We are going to explore and explain both.

Do Not Resuscitate (DNR)

A DNR is a directive stating that if you do not want doctors, medical professionals or emergency responders to resuscitate you under any circumstances.  Thus, if your heart stops or you stop breathing, medical staff will not attempt resuscitation. This directive is typically used when someone is hospitalized with a terminal illness or is in hospice care, but a lot of elderly people have DNRs because they do not want “heroic measures” taken if they were to suffer a heart attack.  In situations without a DNR, medical staff are legally obligated to attempt resuscitation using methods like defibrillation, chest compressions, intubation, and artificial ventilation. However, with a DNR in place, you can ensure that these measures are not taken if that aligns with your wishes.

It’s important to note that for a DNR to be effective, it must be documented in writing on an approved form. 

Living Will/Advance Directive

A Living Will, also referred to as an Advance Directive or End of Life Directive, is a more comprehensive document outlining your preferences for medical care if you are determined to be in a “Persistent Vegetative State” or a “Terminal Condition.”

• Persistent Vegetative State – means you have no measurable brain activity beyond basic brain stem function, such as involuntary breathing and involuntary heartbeat.
• Terminal Condition – means an incurable or irreversible condition for which life sustaining procedures serve only to postpone the moment of death.

A Living Will allows you to specify a timeframe for maintaining life sustaining procedures —whether you want it removed immediately, after a certain period, or kept on indefinitely.  Additionally, Living Wills can include instructions regarding organ and tissue donation.

Why Advance Directives Matter

The primary purpose of a DNR or a Living Will is to provide clear, legally binding instructions on your medical preferences. While younger, healthier individuals may not require a DNR, we recommend that anyone over the age of 18 have a Living Will in place. This document helps remove potential conflict or confusion among loved ones should you become incapacitated.

Next Steps for Colorado Springs Residents

For those in Colorado Springs, it’s essential to consult with a trusted attorney, your family and your healthcare providers when creating advance directives. At The Law Office of Kevin R. Hancock, we provide the expertise you need to craft these documents effectively. 

For assistance with your Living Will or DNR, contact The Law Office of Kevin R. Hancock in Colorado Springs today. We’re here to help you make informed decisions and ensure your preferences are respected.

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A Revocable Living Trust (“RLT” for short, or just “Trust”) is used to manage and control property after a person passes away. A Trust is simply a relationship created whenever one person (the “Trustor”) gives property to someone else (the “Trustee”) to manage and control on behalf of a third party (the “Beneficiary”). “Revocable” means the Trust may be revoked or amended at any time by the Trustor. “Living” means the Trust is set up and managed during the Trustor’s lifetime.  We also call these “inter vivos” (during the life) trusts.

The two main purposes of a Revocable Living Trust are to avoid probate and establish a plan for management and distribution of assets after the Trustor passes.  There are a lot of key features of a Revocable Living Trust that provide maximum protection and flexibility for planning and managing a person’s estate, as follows:

• Probate Avoidance – A key feature of a Revocable Living Trust is the ability to avoid probate of assets. “Probate” is the Court process of transferring assets of a decedent.  In a lot of cases, probate is unnecessary when we can transfer assets in some other manner prior to a person passing.  The way in which a Revocable Living Trust works to avoid probate is the Trust becomes a legal entity the day we set up the Trust, and we can thereafter transfer a person’s probate property into the Trust.  In that way, if a person’s probate property is in the name of their trust, and is not in their name, then there is no need to go through probate.  This feature of a trust becomes especially important when a person owns multiple properties in multiple jurisdictions.  For example, if you own real estate (the most common type of probate property) in Colorado and in Kansas, a Revocable Living Trust allows you to transfer both properties into the Trust, thereby avoiding probate in both Colorado and Kansas, in that case.
• Conservatorship Avoidance – Another key feature of a Revocable Living Trust is the ability to manage and distribute your assets over time. See below.  But, a key feature and reason for setting up a plan for management and distribution of assets is avoiding Conservatorship.  In Colorado, a person is not allowed to inherit property until they are 21 years of age.  If a Trust has not been established for a person under 21, then, by default, your property, if you were to pass, will be set aside into a Conservatorship.  A Conservatorship is basically a Court forced and enforced Trust wherein the Court oversees and manages your assets on behalf of your minor (under age 21) beneficiary until they turn 21 years of age.  The two main problems with a Conservatorship are: (1) Courts are not set up to be financial managers; and (2) not everyone wants their children who are 21 years of age to inherit and manage on their own a large sum of assets.  In addition, Conservatorships can be very, very expensive and tedious to manage over time.  Thus, in order to avoid this outcome, a Revocable Living Trust is a much preferred manner of managing and distributing assets over time.
• Management and Distribution of Assets Over Time – When you set up a Revocable Living Trust, you have the ability and flexibility to determine who manages that property for your beneficiaries (i.e. who is the Trustee), how the property gets managed, and when it gets distributed. As far as distribution of assets in the Trust, timing, etc., you have full flexibility to determine what is best for your beneficiaries, including holding assets in trust for their lifetime to distribution at certain ages and at certain percentages to everything or anything in between.  The key is you get to decide.
• Asset/Creditor Protection – One of the best features of a Trust is the ability to protect the assets in the Trust from your beneficiaries’ creditors. This was originally labeled a “Spendthrift clause” to protect the assets from “spendthrift” beneficiaries.  We now call it an asset protection clause, creditor protection clause or restriction clause.  The purpose of it is to say, effectively, the assets that are in your trust, for as long as they remain in your trust, are off limits from any of your beneficiaries’ creditors.  They are not allowed to collect, claim, or attach any such assets in the Trust, for as long as such assets remain in the Trust.  This level of asset protection cannot be purchased or put together in any other way or anywhere else – you literally have to die to get it.  And, the importance of that level of protection cannot be understated.

There are several other features of a Revocable Living Trust that we will explore and outline in a future blog, but these are the main features of a Revocable Living Trust that make it unique and highly useful in a variety of circumstances.

That being said, a Revocable Living Trust is not the right estate plan for everyone.  As part of our estate planning process at The Law Office of Kevin R. Hancock, LLC, we walk through each client’s individual personal and financial situation, and we discuss the pros and cons of setting up a Will and/or a Revocable Living Trust.  And, we decide, together, what is best and right for you and your family.

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One of my favorite questions from an estate planning client is – why do people get a revocable living trust? A revocable living trusts can be a highly effective and flexible estate planning tool. While a not everyone needs a trust, there are a lot of reasons to consider a revocable living trust.

Here top three reasons as to why you should consider a revocable living trust as part of your estate plan:

1. Avoid Probate.

When a person owes no significant debts, probate is simply the court process of transferring title of a decedent’s property to his/her heirs. But, why avoid it? For most people, the Court system is a complex and daunting system, and their primary interaction with the Court is through jury duty or a traffic ticket. But, we go to probate court only when someone dies. When you couple the grieving family with an already negative perception of the court, you have the recipe for nightmares, battles, and layers of anxiety. Besides, the cost of probate, both in money and time, is significant. Even in a State like Colorado, where probate court can be mostly an administrative process with little actual court involvement, the typical cost (with an attorney involved) is $3,000 to $5,000 and the typical timeframe is 1-2 years. So, save your family the heartache and nightmare – avoid probate, if possible!

2. Asset Management for Minor Children.

If you have minor children (under 21, in Colorado), you will need to have your assets managed for your children until they are at least 21 years of age. By setting up a revocable living trust, you have can plan for the management of your assets for minor children. Without a trust, your assets will go into a conservatorship managed and overseen by the probate court. Are you comfortable with a court overseeing your assets for your kids? Are you comfortable with your court-appointed conservator having to ask for funds from the probate court and report to the probate court on an annual basis? A revocable living trust allows you to appoint and manage, through the terms of the trust, the person you want to oversee and manage your assets for your minor children. You can accomplish this through what we call a testamentary trust, but the major drawback of a testamentary trust is a testamentary trust allows for and sometimes incorporates probate as a necessary aspect of transferring assets upon death into the trust. In other words, a testamentary trust does not avoid probate. See Number 1 reason for a revocable living trust above. So, for maximum efficiency, the revocable living trust is the best option to avoid probate and provide for management of assets for minor children.

3. Distribution Beyond Age 21.

Let’s just say you and your spouse have one minor child age 7, and, like a lot of people, you each have a life insurance policy for $500,000.00. In the unfortunate event you were to pass away, your child would inherit a total of $1.0 million in life insurance. If you did not create a revocable living trust or a testamentary trust during your lifetime, then, as mentioned above, your assets would then go into a conservatorship to be managed until your child turns 21 (the minimum age of inheritance in Colorado). But, upon your child turning age 21, the Court is required to turn over whatever assets remain in the conservatorship. So, if you put yourself in your child’s shoes, what would you have done with $1.0mil at the age of 21? Would it be here now? If you had set up a revocable living trust, you could very easily set a different course for your child by setting up a plan for distribution beyond age 21. Most of my clients, when faced with this option, choose a timeframe for distribution between ages 25 to 35. Usually, it is something like one-half at 25 and one-half at 30, or one-third at 25, one-third at 30 and one-third at 35. Either way, you have the flexibility to plan for distributions to your child/children that will best work for and protect them.

A revocable living trust is a very effective and flexible tool in estate planning, especially if you have minor children. If you want more information or to talk more about the options a revocable living trust can give you, please contact us to set up an appointment. An initial appointment with me is always free!

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