Q: Is it true that assets are tied up until the probate estate is settled - maybe for years?
A: Living trust salespersons use all kinds of scare tactics and myths to peddle their products here in Colorado.
An estate proceeding in Colorado permits the personal representative to immediately pay bills, distribute assets, and generally settle the estate. Thus, the surviving spouse is not left destitute nor do bills remain unpaid. Assets are distributed when deemed appropriate by the surviving Personal Representative.
The probate proceedings do not require the filing of an inventory or the submission to the Court of any kind of accounting. Thus, the estate assets will not be disclosed to the public, maintaining the cloak of privacy for the deceased and his or her family but providing all or even more of the flexibility over the settlement of the estate that a trust would provide. Therefore, the privacy, speed, and flexibility of asset settlement are not that much different when comparing a trust to a Will.
Although once a probate is started it can not be closed for six months, normally all the work is finished long before that time and the Personal Representative just waits to file a one page document called a Verified Statement that basically says to the Court, "we are done, good-bye."
And finally, is it really easier on the family for you to go through the effort of retitling all of your assets to the trust when the assets then have to be retitled from the trust to the beneficiaries? Why add the extra legal layer (the trust) to your life and the extra work?
Q: Can I appoint an out-of-state personal representative to settle my estate?
A: Your personal representative should be a detail person who will follow through with assigned tasks. And it does not matter whether he or she lives in Colorado or not, nor even physically comes to Colorado to work on the Estate. So do not hesitate to pick the best person. Being realistic in the selection of the personal representative is the best way to minimize settlement problems, even if it means hurting some feelings. Remember, putting a loved one in a position that is not right for him or her is not fair to that individual or to the beneficiaries.
This also applies to selecting a trustee, but even more so. Once a trustee is in place in an irrevocable trust, removal powers usually are absent and the length of time in the authoritarian fiduciary position is much longer.