Q: I went to one of those living trust seminars about avoiding probate and got the you-know-what scared out of me. When I mentioned several of your articles, I was told that you were just a typical attorney out to milk the system by trying to discredit living trusts and that I needed to spend several thousand dollars with him to avoid paying tens of thousand of dollars in attorney fees.

A: Every state is different when it comes to setting up estate documents. When I am planning estates for residents of certain states, I only do living trusts, not Wills. Here in Colorado, we have a choice and there certainly is no one superior method.

First in using a living trust, the assets must be handled twice—once to transfer them into a living trust and then at death, to transfer them out of the living trust. In a probate, the assets are handled once.

Since you are married and do not have an estate tax problem, the assets should be held in joint tenancy with your spouse, and each of you should be the other's beneficiary or payable on death designee. Thus no probate is necessary at the first death, even if you have a Will. It is only at the second death where Court involvement might be necessary.

Now in most states, probate should be avoided because an attorney must be hired who charges a percentage of the estate, the assets are tied up for months or years, the estate assets must be disclosed through filed inventories and reports, bonds are necessary, the probate estate may last for years, and closing the estate is very difficult and time consuming.

In Colorado, using unsupervised administration under the Uniform Probate Code, an attorney is not required and many Personal Representatives (executors) do everything themselves without employing an attorney to handle the paperwork. An attorney that is hired cannot charge a percentage but can only charge a reasonable sum for the reasonable time involved.

Once the estate is begun, assets are not frozen. Bills can be paid and even assets can be distributed without waiting for the estate to be closed.

No inventory is required to be lodged with the Court so no one can just go down to the courthouse and snoop. Periodic reports are also unnecessary. A very broad generalization is that the philosophy in Colorado is that the Court simply grants legal authority to the Personal Representative to settle the estate but does not need to micro-manage as in many states. The Court gets involved only if a problem arises or a question is presented to the Court.

It is true that once begun, an estate cannot be closed for six months. But that is to permit the Notice to Creditors claim period to run in a newspaper. And yes, some estates drag on for months and years, but that is not because of the probate system in Colorado. It normally involves issues and problems in that estate proceeding, which most likely would be encountered with a trust also.

Finally, the cost to run an estate through the Court with an attorney will probably be several thousand dollars, not tens of thousands of dollars, even with a large estate. It is not true that the cost would be 5% or 10% of the probate estate. If an attorney is not used, then the cost will be several hundred dollars. Contrast this to the cost to set up a living trust, the cost that should be expended to maintain it, and the cost to take the living trust apart at death. And even with a living trust, an estate may still need to be probated.

So there is no right or wrong answer. A living trust might be right for you. But get a second opinion from your family attorney or CPA before you go hog wild and make commitments, after getting drawn into the generated excitement and emotional verbiage presented at some of these living trust presentations, which are just entertaining dog and pony shows, at most.