A Will is a Key Component of Any Estate Plan, But It’s Not Enough

May 1, 2024 | Estate Planning

When thinking of estate planning, writing a will usually comes to mind. A will can help you accomplish a number of important estate planning goals; however, it certainly isn’t a complete plan to protect your future.

A will allows you to control how your assets are distributed after you pass away. Without a will, your assets will be distributed in accordance with Colorado’s intestacy succession laws.  These laws determine who will inherit your estate in an objective and procedural manner to ensure your assets are distributed.  The process of intestate succession completely ignores your wishes because what you “would have wanted” is simply irrelevant to the state without a formal will in place.

A will is also critical when you have minor children. Under a will, you dictate the guardian who will raise your minor children, the conservator who will control the money on behalf of your children, and the terms and conditions as to how and when your children gain control of the money.  Without a will, a court decides who will raise your children and tend to the money on their behalf until the child turns twenty-one; the court could appoint someone you’d never select.

A will is an important document to assure wishes will be respected after you’ve passed away. Yet, it’s important to consider the limitations of a will. For instance, your will won’t determine who will manage your affairs should you become incapacitated.

Estate planning involves more than just a will that only comes into play at death, you also need to establish documents should you become incapacitated while alive.  Creating a durable power of attorney for financial purposes and advanced medical directives will ensure you retain some control over what is done on your behalf if incapacitated. These documents empower one or more individuals to make decisions about your assets or medical care when you’re unable. If you don’t have either document in place, a court will decide who to appoint to fill these roles. A court appointed agent has power to take actions they believe are in your best interest regardless of your personal preferences.

Further, certain financial accounts allow for a beneficiary designation form, instead of a will, for guidance on how the asset is to be distributed after the owner’s passing. These types of assets include life insurance, annuities, retirement accounts like IRAs and 401(k)s.  When there is a completed designated beneficiary form, many court cases concluded the owner’s statements and intent in his or her will do matter if it contradicts what is written on the beneficiary designation form. This is why it’s important to review your beneficiary designations periodically. Make sure they reflect your current wishes, and not what you wished when opened your IRA 20 years ago.

A revocable trust is another estate planning tool used to provide greater flexibility in managing your estate in life and death.  In life, if you become incapacitated, your successor trustee takes control and manages your estate under your terms.  In death, a revocable trust allows your estate to avoid probate as well as the public scrutiny that accompanies it.

In short, while a will can help you accomplish important goals, additional estate planning tools and strategies are available to protect you and your loved ones both after you pass away and in the event of tragedy while still living.

At Duncan Legal, PC we understand the importance of tailoring our services to meet the individual needs of our clients.  For personalized assistance, call Duncan Legal to schedule a consultation.  Your peace of mind is our priority and we look forward to assisting you on your estate planning journey.

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