A Revocable Living Trust (“RLT”), often just referred to as a Living Trust, is an estate planning document that places your assets- real estate, investments, bank accounts, and personal property- in trust for your benefit during your lifetime.  The grantor (the person who creates the trust) may amend or revoke the trust at any time. Upon the grantor’s death, the trust assets pass to the designated beneficiaries, but, unlike a last will, the trust avoids the delays and expenses of probate. A living trust, unlike a last will, is also a private document that is not recorded in any public record upon your passing, ensuring the privacy of your family legacy plan.

We provide what is called “Unbundled Legal Services” or “Limited Representation Services” (pursuant to Colorado RPC 1.2(c) and N.M.R.P.C. 16-102 (C)) for our estate planning clients. The Unbundled Legal Services we provide through this online platform keeps you in control of your estate plan expenses by limiting your attorney’s work to specific agreed upon tasks. By limiting the scope of our representation, we are able to provide top notch legal services at a fraction of the cost you will find with most traditional law firms. Limited scope representation empowers you to limit services that a lawyer might traditionally provide, but that you view as too expensive or as not necessary to achieve your legal objective. Because we have streamlined the data and payment gathering process, you get quality legal documents and save a bunch of money. Our process is streamlined because: 1) Our clients provide us with the information we need through our easy to complete questionnaire; 2) Our clients pay online; 3) Our clients prefer a phone consultation as opposed to an in office visit (saving us both time); 4) Our clients are willing to fund some of the trust assets into the trust with our specific instructions. Our attorney-client agreement that you will sign at the end of the questionnaire clarifies our unbundled attorney-client relationship, however, the bottom line is this- we (us and the client) utilize technology to streamline the estate planning process and we pass on the savings to you.

For the majority of people, the answer is yes. Our system is designed to provide standard Living Trust Package documents to protect you and your family. We do not provide tax advice or complex legal advice for taxable estates (i.e., estates over or near $11M total value). Our system is not the proper forum for such advice. An attorney with expertise in your area of legal need should be consulted regarding your particular situation if:

• Your total taxable estate (including stocks, bonds, real estate, business interests, cash, life insurance, personal property, retirement plans, etc.) exceeds or in the near future will exceed the approx. $11M million Federal Estate Tax Exclusion. Please e-mail us if this is your situation and we will be glad to help you. We have the experience to handle highly complex estate plans, but it would probably be best to assist you through our traditional law practice. Please e-mail michael@rockymountainstartup.com and we will contact you to set up a free consultation with one of our attorneys.
• You are a married couple and one spouse is a non-U.S. citizen (requires specialized planning). Please e-mail us if this is your situation and we will be glad to refer you to another attorney.
• You desire to disinherit a spouse or child (requires specialized drafting).

You still need a Last Will even if your main estate document is a Living Trust. Any property left out of your Living Trust (either intentionally or unintentionally) passes according to your Pour-Over Will. A Will also names the Guardian of any minor children you have. We prepare that document for you. A Will also names the Guardian of any minor children you have.

While you are acting as the Trustee (i.e. during your life while you have the mental capacity), you can do anything you want with the assets owned by the Trust and with the income earned by the Trust. You can buy, sell, spend, save, make gifts, put assets into the Trust, take assets out of the Trust – there are no limitations. All income is yours and is reported on your personal tax return; no separate Trust tax return is needed. There is no practical difference between assets you own personally and assets owned by your Revocable Living Trust; when your sign your name on behalf of the Trust assets, you just add the word “Trustee” at the end.

No. It’s not a matter of how much you own, but rather what you want your estate plan to accomplish that matters. Avoiding probate and providing for the private distribution of your estate assets are the primary reasons to create a trust plan.

The IRS currently allows a married couple to exempt up to $500,000 from capital gains taxes on the sale of their principal residence. A home placed into a RLT is still eligible for the exclusion under the grantor trust rules.

Yes. Under federal law, mortgage due-on-sale provisions are regulated by the Garn-St. Germain Depository Institutions Act of 1982 (Garn Act). The Garn Act, as interpreted by the Code of Federal Regulations, prevents a lender from enforcing a due-on-sale clause when a home is transferred to a revocable trust in which the borrower is a beneficiary and the home is occupied (or will be occupied) by the borrower.

Typically your home, investment accounts, cash accounts, and personal property. Life insurance may be funded into the trust depending on the circumstances. Retirement accounts are typically not funded into the trust. A Pour-Over-Will is still needed to catch any assets that are not properly funded into the trust.

Yes. The RLT can be revoked entirely or amended at any time during the Grantor’s life. Typically, after a Grantor dies, the trust becomes irrevocable. If you want to make changes to your Rocky Mountain Trust Plan, please e-mail us at michael@rockymountaintrustplans.com and we will contact you to schedule a time to discuss your desired changes. A typical trust amendment fee is + or – $300. Typical reasons for changing your trust include: change in marital status, deaths in the family, births, adoptions, moving to another state, changes in financial status, desires to change your beneficiaries, etc.

During the Grantor’s life, the Trust itself is not taxed. The IRS considers it to be what is called a Grantor Trust and the Grantor(s) still pay the income taxes on the assets just like they did before creating the Trust. Assets transferred to the trust are not taxed for gift tax purposes.

No.  A RLT is a private document that does not need to be recorded with any court or government agency.  It may, however, need to be registered once it becomes irrevocable upon the death of the Grantor.

No. This is a very common misconception. A RLT does not provide any creditor protection for the assets placed into the RLT. To be fair, assets that are held in your individual name during your lifetime and passed to beneficiaries via a Last Will are not protected either. High net worth individuals may want to consider a comprehensive asset protection plan. Please e-mail us if you are interested in asset protection and we can refer you to an attorney who can assist you.

1. Comprehensive Plan: A Revocable Living Trust is a great tool that coordinates all of your estate planning. It is a master document that allows for the centralized lifetime management of your assets and a smooth transition to beneficiaries upon your death. During your lifetime, the Grantors alone (typically husband and wife) have total control over the trust assets acting in their capacity as Trustees. The Grantors receive all of the income from the trust as trust beneficiaries and they can spend and manage the assets in any way they see fit. Upon the death of the first spouse, the surviving spouse has total control as Trustee. Upon the second death between spouses, the trust assets are distributed to the couples named beneficiaries according to the terms of the document.
2. Probate Avoidance: A properly funded trust avoids the probate court system that is necessary with a will based estate plan. A will must be admitted to the probate court in the county where the decedent was domiciled upon their death. The court must then oversee the process that distributes the decedent’s property according to the terms of the will. A RLT avoids probate on both the husband and wife’s death. Avoiding probate saves your family time and money during the estate administration process. An average probate will cost between $1,500 to $5,000 (attorney fees) and a complex probate can cost in the tens of thousands of dollars. Not to mention, the typical probate in most states will take 6 months to settle; which means that your beneficiaries will not be able to have access to your property until that process is completed. Distributions from a trust can occur in as little as a few weeks. This is especially critical if you are a small business owner and you are passing on your business to your spouse or the next generation. Your beneficiaries can continue business operations immediately, without waiting for the courts approval. Lastly, having counseled many families through probate, I see first-hand the emotional stress that comes with that process. Many people choose to create a RLT to avoid that court process altogether.
3. Avoidance of Ancillary Probate: If you own real property in another state, a RLT can also help you avoid ancillary probate in that state as well. Real property in other states should be titled into the trust via Quitclaim Deed. The trust terms will dictate how the property is distributed upon your death.
4. Avoidance of Conservatorship & Guardianship Proceedings: If you become incapacitated, the court will have to appoint someone to be your Guardian and Conservator to make financial and personal decisions for you, absent specific legal direction. The court costs and attorney’s fees to set up a Guardianship and Conservatorship can easily run $5,000 to $10,000. However, the Successor Trustee (typically your spouse) named in your RLT can act in these capacities without court approval or oversight. Again, this is especially critical for a business owner that becomes incapacitated. The successor trustee is able to step right in, without having to seek the courts permission, and continue to run the business until the Grantor is no longer incapacitated. During incapacity, most people prefer to have their care and assets managed privately by people they know and trust, instead of having the court interfere with their private lives.
5. Flexibility: A RLT is not a state specific document. Therefore, if you move to another state in the future you will not need to create a new RLT. A simple amendment changing the jurisdiction is usually all that needs to be done. A will, however, is a state specific document that may need to be completely redone if you move to another state.
6. Smooth Transition of Assets to Children: Upon the death of both spouses, the Successor Trustee of the RLT distributes trust assets to the children and/or other named beneficiaries according to the terms of the Trust. Again, this happens without court oversight and without the delays of probate. The distributions can be made outright to the beneficiaries or held in another trust, called a testamentary trust, for the benefit of children until they reach an age the you are comfortable with them receiving the funds outright. A testamentary trust for children can be created in a will as well, however, it cannot be funded until the probate creditor period (4-5 months) has elapsed. This transition can happened almost immediately with a RLT plan.
7. Privacy:  Once a will is admitted to probate, it becomes public record. Because probate is a public process, this may invite disgruntled family members and the decedent’s creditors to submit claims against the estate. Although a RLT cannot guarantee your privacy, as it can be contested in court, it is certainly much more private than a will. The privacy of the document tends to reduce the risk of litigation from “outlaws and in-laws” coming out of the woodwork. There is certainly less of an opportunity to oppose your distribution wishes. The Trustee must still pay all just debts of the estate, however, keeping your estate affairs private puts the trustee in a better position to negotiate estate debts.

Probate is the judicial distribution of property after death. When an individual dies owning property in his or her name, that property generally must go through probate court. Probate is a legal procedure that establishes ownership of property in others. The probate system is designed to ensure the validity of a will, to give notice to all possible claimants of property, and to resolve ownership disputes and rights. Probate courts also distribute property not covered by a will (intestate estates) according to legal defaults. Procedurally, the probate court first establishes whether the deceased left a valid will. If so, the probate process guides the division of property in accordance with the will’s provisions. If the estate is intestate or if a will is found to be invalid, the probate division applies state laws to divide up the estate. The probate court then signs off on the final accounting of the distribution, thereby finalizing the transfers of ownership. At a minimum, the probate process generally takes about six (6) months to complete. A properly funded Revocable Trust distributes your estate assets to your loves ones without the need to go to probate court.

You will need the services of a state licensed notary public (for the self-proving affidavit) and two disinterested and competent witnesses (witness not entitled to a share of your estate) to witness your signature in order to make the signing of your estate planning documents legally binding. A notary in your area may be found through an internet search. Additionally, the Clerk and Recorders office in your County may be able to provide a notary and 2 witnesses for the signing of your documents. Please contact your County Clerk and Recorder to set up an appointment. Furthermore, the following website contains a notary directory: (http://www.123notary.com). The choice of a notary is made solely by the client and at their own risk. Although RockyMountainTrustPlans.com™ provides each client with detailed signing instructions, we take no responsibility for errors or omissions by your chosen notary or witnesses during the execution of your documents.