Q: I am having grave second thoughts about this living trust that I was talked into. I want out! Am I stuck?
A: Unfortunately, having a living trust is a lot like a marriage. After spending so much money and time and energy hooking up, shouldn't you try to make it work before you bail out?
Although I personally feel that here in Colorado living trusts are normally much harder, more complicated, expensive, slower, and more difficult to deal with than just having property owned in joint tenancy, or with a beneficiary designation at the first death, and then using unsupervised court administration at the second death, wait before you spend more money, effort, time, and energy simplifying your life by dismantling the thing. If you jettison it, the living trust has forced you through two "probates" - setting up the trust is often called a "pre-probate" because you are doing most of the things that your personal representative would do for your estate and now you are going back and handling all the legalities again by taking the trust apart. And you're not even dead yet!!
But there are certain important things to consider.
Make sure that your document is a Colorado product, not something put together, for example, in Utah, Wyoming, or California, and sold locally, even by an attorney. Language referring to community property, executors, separate property, trust deeds, per stirpes, etc. should be red flags alerting you that the document needs to be examined carefully and domesticated for Colorado.
If your net worth is under $1,200,000, but your document refers to the trust dividing into a marital trust and a family trust at the first death, or "generation skipping trusts," then you probably have a much more complicated document than you really need and you might reduce that three or four inch thick "book" down to a couple inches.
All of your assets should be transferred to the trust. Otherwise, a probate will be needed anyway to distribute the property outside the trust, even if the transfer is by a "pour over" Will into the trust. Although probate is "easy" in Colorado, if you are trying to avoid court involvement by using a living trust, then it needs to be set up and maintained through the years by putting all assets inside the trust. Even more so than with Wills, it is important to regularly review the document and especially to be certain that all the assets are still titled in the trust.
To further amplify the last point, all trust assets need to be in the name of the trust and not just listed on the trust asset schedule. Real estate, stocks, bank accounts, etc., still in your name are not in the trust and will have to be handled outside the trust.
A durable power of attorney is still needed even with a living trust. A trustee only has authority over assets in the trust. A trustee has no authority over non-trust assets and matters, and the trustee has no right to make medical decisions.
And as previously noted, despite statements made at seminars, a Will is still needed even though a living trust is present. Otherwise non-trust assets will pass under the intestate laws and will not be transferred to the trust if that was desired when the documents were created. Even more importantly, no one such as a personal representative will have authority to deal with non-trust estate matters and issues if they arise, unless there is a Will, or unless the estate goes to Court and has someone appointed.
I could continue and fill several more columns with alerts about the "care and feeding" of your living trust, but like a new pet, give it a chance. Only thereafter, bite the bullet, admit that the living trust was not for you, and take corrective actions.