Q: I need a primer on Trusts. I went to a seminar where the pitchman made it sound like if I bought his Trust that it would do everything. I would not even need a Will or a Durable Power of Attorney.

A: No one trust can do everything in an estate plan and certainly never completely replace a Durable Power of Attorney or even a Will. But here is a very condensed summary of some of the more frequently used Trusts.

LIVING TRUST.ItÕs primary purpose is to avoid probate. Since the trust owns the property and does not end at the creatorÕs death, the successor trustee has the authority to control and to transfer assets without Court empowerment. In most states a Living Trust is critical in order to have a simpler, less expensive estate settlement. But in Colorado (in my opinion) a Living Trust as the estate linchpin is being used less and less because having a Will and using court unsupervised administration is often the superior estate settlement vehicle. Even with estate tax exposure, a Living Trust is an alternative, not the only way to go.

TAX TRUST. This trust is called by a number of names-- Bypass Trust, the B Trust, the Estate Tax Exemption Trust, etc. It is set up either within or as part of a Living Trust, or it can be placed within a Will. ItÕs primary purpose is to minimize or eliminate estate taxes caused by the creatorÕs death. To be effective, it must be drafted to comply with the tax requirements.

QUALIFIED TERMINAL INTEREST IN PROPERTY TRUST (QTIP). This type of trust is being used more and more. It is designed to avoid taxes at the first death, provide for a spouse, and yet insure that any remaining trust property pass on according to the creatorÕs wishes, not under the control of the surviving spouse. Other names for it are the A Trust or Marital Trust. It is used in situations involving second marriages or to insure that the surviving spouse will not will the inheritance to a new spouse, or maybe lose the inherited property through a subsequent divorce. It is essential that tax provisions be followed precisely.

SPECIAL NEEDS TRUST (also called an ASSET PROTECTION TRUST). As a general rule, a revocable Living Trust in Colorado will not protect assets from creditors, divorce claims, etc. (although the opposite may be true in non-common law states such as California). But a trust can be set up for the benefit of third parties to maintain his or her eligibility for various government and private assistance and/or to shelter the assets from such entitiesÕ claims for reimbursement or judgments. But the Colorado Supreme Court requirements must be strictly complied with. Otherwise the trust protective walls will melt like butter on a warm day.

But there are so many more different kinds of trusts-- The Family Trust used to provide trust assistance for people who have special needs, or personal issues, or need protection such as minors; Irrevocable Life Insurance Trusts (ILET) used to prevent the face amount of an insurance policy from being included in the estate taxable calculations; Gifting Trusts (also called Crummey Trusts) used to permit gifting tax-free without the receiver gaining the direct control of the transferred assets.

I can go on and on. But one trust does not fit all. Look at estate needs and goals. Then look to see if a particular trust might fit into the estate solution when compared to other choices.