Who needs a living trust in Colorado?
Not everyone in Colorado needs a living trust. As of October 2026, a trust is most useful if you own a home or own property in more than one state. It can also help a blended family, or plan for a time you can’t manage money. For simpler estates, a will plus current beneficiary forms may be enough.
- Reviewed by
- Daniel R. Klein, attorney
- Last reviewed
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- 6 minutes
This guide is general information about Colorado and Arizona law as of . It is not legal advice.
What is a trust?
A trust is a legal setup where one person holds and manages property for others. Every trust has three roles:
- The grantor creates the trust and sets its rules. Some documents say “settlor” or “trustor.”
- The trustee manages the property and follows the rules.
- The beneficiaries receive the benefits.
One person can fill more than one role. In Colorado, trusts are governed by the Colorado Uniform Trust Code (C.R.S. 15-5-101 and following).
What is a living trust?
A living trust is a trust you create and control while you are alive. It is also called a revocable trust, because you can change or cancel it. In Colorado, a trust signed on or after August 7, 2013 can be changed or canceled unless it says it can’t be (C.R.S. 15-5-602). Older trusts may follow different rules, so it is worth asking how yours can be changed.
With most living trusts, you are the grantor, the trustee, and the main beneficiary, all at once. You keep using and managing your property as before. You also name a successor trustee to take over later.
A living trust is different from a testamentary trust, which is written into a will and starts only after death.
How is a living trust different from a will?
A will and a living trust can both say who gets your property. But they work in different ways. Our estate planning page has a side-by-side table. In Colorado, these are the differences families notice most:
- Probate. A will goes through probate, which in Colorado usually stays open at least 6 months (C.R.S. 15-12-1003). Property in a funded trust usually skips it.
- Property in another state. With only a will, a home in Arizona or elsewhere may need a second probate case there. A trust can avoid it.
- Young children. Only a will can name a guardian for children under 18.
Many people with a trust also sign a pour-over will. It sends anything left outside the trust into it, though that property may still need probate.
Who may benefit from a living trust in Colorado?
A living trust is often worth a look if one or more of these fits you:
- You own a home. Without planning, a home in your name alone usually needs probate. Colorado probate cases usually stay open at least 6 months (C.R.S. 15-12-1003).
- You own property in more than one state. A trust can spare your family a second, ancillary probate case. This is common for people with homes in Colorado and Arizona.
- You want a plan for incapacity. If you become unable to manage your money, your successor trustee can step in without court.
- You have young or vulnerable beneficiaries. A trust can hold money for a grandchild until a set age. It can also help someone who struggles with money.
- You have a blended family. A trust can provide for a spouse during their life, then pass what is left to your children.
- Someone you love has a disability. A special needs trust can help protect their benefits.
- You want things handled smoothly. Trusts are usually settled without a court case.
Who may not need a living trust?
A trust is not right for everyone. A will-based plan may be enough if:
- you rent your home, or your home already has a recorded beneficiary deed,
- most of your savings are in accounts with named beneficiaries,
- what would be left is small. In Colorado, personal property worth $88,000 or less can often pass by small estate affidavit, for 2026 deaths (C.R.S. 15-12-1201, as of October 2026). It cannot transfer a home,
- you are comfortable with your family going through probate.
Most people, with or without a trust, also benefit from a durable power of attorney and a medical power of attorney.
Does a living trust save taxes?
For most families, a living trust is not a tax tool. Its main jobs are avoiding probate and planning for incapacity.
- The federal estate tax applies only to very large estates. For 2026 deaths, the exclusion is $15,000,000 per person (IRS Rev. Proc. 2025-32, as of October 2026).
- Colorado has no estate or inheritance tax (Colorado Legislative Council).
Married couples with larger estates may use trusts as part of tax planning. A related rule called portability can also help.
Does a living trust protect your savings from nursing home costs or creditors?
Usually not. While you can change or cancel your living trust, the law generally treats its property as still yours. Planning for long-term care or creditor protection needs other tools. An irrevocable trust is one example. These need careful advice before you act.
What does setting up a living trust involve?
Here is what the process usually looks like.
- Talk about your goals. Who do you want to provide for? What worries you?
- Choose your people. Pick a successor trustee, and a backup. Pick your beneficiaries.
- Decide how gifts are paid. Some beneficiaries get their share right away. Others get it over time, or at a certain age.
- Sign the trust and a pour-over will. Your lawyer prepares them for you to review first.
- Sign your other documents. These include a durable power of attorney, a medical power of attorney, and a living will.
- Fund the trust. Move your home and accounts into the trust’s name. This is called funding a trust. See our guide on how to fund a living trust.
- Review it over time. Look again every three to five years, and after a marriage, death, divorce, or move.
What happens to a living trust when you die?
Your successor trustee takes over. This is called trust administration. The trust can no longer be changed.
- The trustee must notify the beneficiaries within 60 days (C.R.S. 15-5-813).
- The trustee gathers the property, pays bills and taxes, and keeps records.
- Then the trustee hands out what is left, as the trust says.
There is a time limit to challenge a revocable trust in Colorado. It is the earlier of 3 years after death or 120 days after the trustee’s notice (C.R.S. 15-5-604).
If you live in Arizona, what is different?
Living trusts work much the same way in Arizona, with a few key differences (as of October 2026):
- Arizona Trust Code. Trusts follow A.R.S. 14-10101 and following. A trust is revocable unless it says otherwise (A.R.S. 14-10602).
- Less time to challenge. A revocable trust can be challenged within the earlier of 1 year after death or 4 months after the trustee’s notice (A.R.S. 14-10604).
- Community property. Arizona is a community property state (A.R.S. 25-211). That can affect which spouse owns what in a joint trust.
- Beneficiary deeds can name a trust. An Arizona beneficiary deed can name your living trust as the beneficiary (A.R.S. 33-405).
- No state estate tax. Arizona has no estate, inheritance, or gift tax (Arizona Department of Revenue Pub. 10).
Questions people ask
Can I be the trustee of my own living trust?
Yes. Many people who set up a living trust serve as their own trustee. You keep managing your property as before. You also name a successor trustee to take over if you die or become unable to manage things.
If I have a living trust, do I still need a will?
Yes. A pour-over will catches anything left outside the trust, though that property may still need probate. A will is also where you name a guardian for young children. Most trust-based plans include both.
Can I change my living trust later?
Usually, yes, while you have capacity. In Colorado, a trust signed on or after August 7, 2013 can be changed or canceled unless it says it can’t be (C.R.S. 15-5-602). If your trust is older, ask us how it can be changed. With a joint trust holding community property, either spouse can revoke it as to their own share, but a change needs both (C.R.S. 15-5-602(2); A.R.S. 14-10602(B)).
Is a living trust the same as a revocable trust?
Yes. People use both names for the same thing. It is called living because you set it up while you are alive. It is called revocable because you can change or cancel it.
When should you call a lawyer?
Consider calling us if:
- you own a home in Colorado, Arizona, or both,
- you have a blended family or a beneficiary with special needs,
- you have an old trust and aren’t sure it still fits, or was ever funded,
- you are a successor trustee and a loved one has died.
Sources
- Colorado Revised Statutes, Title 15 (2024 official edition): C.R.S. 15-5-101, -401, -602, -604, -813; 15-12-1003, -1201
- Colorado Judicial Branch: JDF 999, small estate affidavit
- IRS: Rev. Proc. 2025-32 and estate tax FAQ
- Colorado Legislative Council: Estate tax
- Arizona Revised Statutes: A.R.S. 14-10602, 14-10604, 25-211, 33-405
- Arizona Department of Revenue: Publication 10
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