Understanding the Basics of Estate Planning in Colorado
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What Is Estate Planning?
Estate planning generally refers to a person’s arrangements to organize and secure their assets during their lifetime and determine how those assets will be preserved and distributed after their death or if they become incapacitated.
Many believe estate planning is meant for the extremely wealthy or senior citizens. But that notion is inaccurate. Even though estate planning is more common among people in those categories, the process serves several purposes that can benefit adults of all age groups regardless of how much they own.
If you’re still questioning whether you need estate planning in Colorado, this guide explains the basics and some of its benefits to help you decide. Please read on to learn more.
Benefits of Estate Planning
Estate planning allows you to anticipate and eliminate any issues that could occur in your absence or due to your incapacitation.
Creating an estate plan doesn’t mean you’re about to die or enter a coma. You’re only making sure that if such incidents happen, your family and loved ones are clear on your wishes for your assets and the things or people you care about.
Some of the benefits of having an estate plan include the following:
You Can Protect Your Assets From Creditors
If you are susceptible to constant lawsuits due to your status or the nature of your business, or you engage in frequent high-value credit transactions, you risk losing your assets if a transaction or lawsuit goes south.
In such cases, your creditors or the successful party in a lawsuit may seek to collect what they’re owed by disposing of your assets. When this happens continuously, you may have nothing left after some time.
There are asset protection techniques in estate planning that suit people in your position. With these techniques, you can secure your assets and shield them from such third-party claims.
Everyone Is Clear on Who Inherits Your Assets
Many families have been torn apart due to inheritance issues after the death of a parent or loved one. In many such cases, the deceased failed to specify who gets what before passing on, leading to confusion and other negative emotions among their surviving family members.
You can save your loved ones from such property wars by setting up a comprehensive estate plan that specifies who your estate’s beneficiaries are.
Estate Planning Helps You Prepare for Incapacity
Estate planning allows you to prepare for possible incapacity due to illness or injury.
You can leave instructions detailing who you want to make medical decisions, manage your business, or act on your behalf in such circumstances. That way, there’s no confusion on how you need things done.
You Can Help Your Loved Ones Avoid Probate
Probate is a legal process that the estates of most deceased persons pass through. The process is typically handled by the probate court in charge of where the deceased resided. It could be long and complicated, yet until it is completed, the deceased’s beneficiaries cannot assess any inheritance from the estate.
You can help your loved ones avoid the probate process or minimize its impact through estate planning. An estate planning lawyer can provide more details on how this works.
Common Estate Planning Tools in Colorado
Estate planning tools are the legal vehicles that make your estate plan enforceable. They include the following:
Wills
The will is perhaps the most popular estate planning tool and the backbone of most estate plans. This legal document allows you to leave specific instructions that would take effect after your death.
Your will can cover issues such as :
- The distribution of your assets after your passing
- Appointment of guardians for your minor children
- Care of your pets.
If you wish to create a Last Will and Testament in Colorado, there are some requirements you must meet for your will to be valid under Colorado law.
You can consult an Estate Planning Attorney in Centennial, CO, to help you understand the rules surrounding wills in the state to ensure that your will can be enforced when you are no longer around.
Trusts
A trust is a legal arrangement in which a person, called a settlor, transfers legal ownership of their assets to another, called a trustee, for the benefit of others. The settlor determines the scope of the trust and specifies the terms of operation in the trust document.
A trust offers several estate planning advantages and can be used to avoid probate and estate taxes and protect assets from creditors.
There are different types of trusts for different purposes depending on the needs and intentions of the maker.
However, trusts in Colorado are heavily regulated. If you’re considering creating one, you must ensure that it meets the legal requirements for validity. A Trust Lawyer in Centennial, Colorado, can help you understand the applicable trust laws and ensure that your trust meets the required standards.
Power of Attorney
A power of attorney is a legal document that entrusts someone else (an agent )with the authority to make decisions on your behalf.
This versatile estate planning tool can be used in almost any situation where you need someone else to act for you. For example, you can execute a power of attorney that empowers someone to manage your rental property and collect rent on your behalf, not because you cannot, but because they have more experience in that area.
You also get to decide how much power your appointed agent has and the scope of authority they can exercise over your affairs.
How an Estate Planning Attorney Can Help
There are several other estate planning devices and techniques beyond those mentioned in the previous section. It may be difficult to determine which suits your needs or if more than one would be more appropriate. That’s why you need a skilled estate planning attorney.
An estate planning attorney can assess your situation, take note of your specific needs and goals, and help you create a plan that benefits you.
Many of the available estate planning tools are regulated by law and must meet specific legal requirements to be valid. Estate planning lawyers understand the applicable laws and can help ensure that the tools and corresponding estate planning documents used in your estate plan meet the required standards.
Estate planning is a continuous process. You may need to review and amend your estate plan as your circumstances change. An estate planning lawyer can help keep your plan updated to ensure it reflects your current status.
Do You Have More Questions About Estate Planning in Colorado? Contact Duncan Legal, PC, for Help
People consider estate planning for different reasons. But the bottom line is that even though the process may be complex, estate planning is an act that demonstrates foresight and commitment to the welfare of your loved ones.
Do not let the legalities of the estate planning process deter you from organizing your assets and securing the future of your loved ones. Our experienced estate planning attorneys at Duncan Legal, PC, can guide you through the process and help you set up a solid estate plan that would hold up even in your absence.
If you need help Creating a Living Will in Colorado, preparing estate planning documents, or you’re unsure how to begin the process, do not hesitate to contact us. Let us assess your situation, determine your estate planning goals, and help you take positive steps toward achieving them.
