Trusts allow you, the grantor, to safeguard property for your beneficiaries after you pass away or become incapacitated. With a trust, you can rest assured that you can carry out your wishes for your loved ones after you are gone. You could choose a revocable living trust as part of your estate plan. A revocable living trust will make it easier to make changes to the terms while you are still alive.
There are also reasons when it is possible or necessary to terminate a trust. Reasons for terminating a trust may include:
- The grantor was not of sound mind when the trust was made
- The trust itself, or the basis for it, was illegal under state law and the court intervenes and terminates the trust
- The trustee did not fulfill his or her duties
- The grantor created the trust while under duress or due to fraud
- The terms of the trust allow the trustee to terminate the trust (such as after distributing all of the assets in a way that meets the conditions of the trust)
It is also possible to modify a trust, although this option is generally much easier with a revocable living trust. Depending on the scope of the changes, it may be easier to revoke a trust and create a new one. An attorney at our firm can also discuss options for modifying an irrevocable trust in Colorado.
Steps for Terminating a Revocable Living Trust in Colorado
For a revocable living trust, there are specific steps involved with terminating the trust. You would need to send the beneficiaries a written notice, among other responsibilities. Our attorneys can walk you through the steps involved.
The steps are different for a trustee. This is the party who is responsible for carrying out the terms of the trust, such as transferring assets to beneficiaries, after the grantor passes away or becomes incapacitated. You can speak with an attorney at our firm if you have questions about the responsibilities involved for terminating a trust as a trustee.
There are cases where you can terminate an irrevocable trust, but the process is more difficult than it is for a revocable trust. We can review your situation and help you determine whether this could be an option.
We Can Answer Your Questions About Terminating a Trust in Colorado
Terminating a trust can be a tricky process in some cases. Generally, you would have the easiest time terminating a trust by working with the attorney who helped you create the trust.
There are additional reasons why a trust may be terminated that are not mentioned in our blog post. Our Centennial estate planning lawyer can answer questions you have about terminating a trust in Colorado. You can contact us by dialing (720)613-2633 or by using our online case review form. And you are always welcome to come to one of our upcoming workshops.