Q: I enjoyed your column about different kinds of Trusts that appeared in the last edition of the Senior Voice. But when do you use Trusts and when donŐt you recommend them?

A: LetŐs start out with the Trusts that I hesitate to implement.

I try not to use Revocable Living Trusts (also known as Loving Trusts) to avoid probate. Most of the time, at least in my experience over the years, such devices in Colorado are more complicated, expensive, and prone to being inoperable when compared with having a Will and using unsupervised court administration, even in large, complicated estates.

I do not like Irrevocable Life Insurance Trusts (ILITS). If not structured properly, the insurance policy and/or the money becomes entombed within the trust. With the increase in the estate tax exemption and the current estate planning techniques now available, there are more flexible and equally efficient alternatives to minimize the risk that the insurance proceeds will push the estate into taxable territory.

I shy away from generation skipping trusts. The hand from the grave trying to control descendants 80 or more years after death never has struck me as a good way for society to structure itself. Think about if your grandchildrenŐs lives were being financially dictated by a document constructed and implemented during the great depression.

On the other hand, I do use a large number of Testamentary Trusts to minimize or even eliminate estate taxes. (A living trust is not the only way to do so.)

If property is left directly to a minor, a court appointed conservator would have to be named. But a trust in a Will can be used to stay out of court and provide the legal framework needed by a minor. In fact a trust can be set up to hold an inheritance beyond the age minority. Recently I have had parents set up Testamentary Trust for children to last until the children were in their 90Ős!!

Trusts can be used to help disabled or incapacitated beneficiaries by preventing the asset from being taken by Social Services in order to reimburse it for past support, or having the inheritance disqualify the beneficiary from eligibility.

Trusts can be set up for special reasonsŃto provide for education, to care for pets, or for short term management of assets (i.e., give a beneficiary more time to mature, protect the inheritance from a gold digger, etc.)

Back in the 19th and early 20th centuries, businesses were organized through trusts. Although key tax and internal legal structures prevent a trust from returning to those glory days, I have effectively used trusts in business settings.

Trusts can also be used to hold a family business, the farm, or maybe even the family cabin. Sometimes a Limited Liability Company or a Partnership is just not the right fit.

Trusts, when used with Wills, can provide a vast array of useful solutions. Just identify the problem and often a Trust can be the answer.