Answering Colorado Estate Planning FAQ
With no formal education involving estate planning in school, it is no surprise how many people do not have all the answers to their estate planning questions. Here at Duncan Legal, I want to help you answer some important questions you may have.
What Is an Estate Plan and Why Do I Need One?
Are estate plans only for wealthy individuals?
If you have a family with an estate plan, you’ll be able to designate certain issues, such as who will take care of your minor children if something happens to you and your spouse. You can also provide instructions regarding your care if you ever become physically or mentally incapacitated or how your assets should be distributed after your death.
A good estate plan includes a series of documents and provides both financial and personal benefits. These documents address the preservation and growth of your assets as well as control decisions regarding who should speak for you, care for you if you are unable, and who should be responsible for managing your finances and other issues.
Early planning is the most important aspect of estate planning because it allows you to minimize or eliminate problems before any crisis occurs.
Are Estate Plans Only for Wealthy Individuals?
There is a false idea that only the rich and famous need an estate plan. The truth is that everyone can benefit from an estate plan.
Although you may not realize it, anyone can have an estate. An estate actually includes everything you own, from a vehicle, real estate, bank account, or life insurance. You have the power and the possibility to decide who can get what and when they will receive it. If you die without addressing estate planning matters, your estate will be distributed according to state intestacy laws. In other words, the State of Colorado will make these decisions instead of you.
Proper planning can help your friends and family avoid an extensive and expensive probate process, as well as specify how you want to disperse your assets.
Is a Will Different from a Living Will?
When should I begin planning my estate?
Yes. A will allows the testator (the person making the will) to provide for their children, spouse, other loved ones, and even pets after their death. Leaving your property to charitable organizations through your Colorado will is also an option. Essentially, the will is a legal document you can use to distribute your property as you wish upon your death.
On the other hand, a living will include instructions on your medical care decisions should you become incapable of making them on your own. Such a document would typically take effect within your lifetime, but only if death is imminent, while a last will and testament take effect after your death.
Do I Ever Need to Update My Will?
If you made your will a few years ago or longer, it may be in your best interest to update your plans, especially if you have experienced the birth of a child, marriage, or divorce in those years. These events are a prime example of why you want to be sure your estate plan reflects the most current position you are in. It is essential to regularly check your estate plan to ensure it accurately reflects your wishes.
It’s a good idea to do that every few years with a trusted attorney because laws governing estate planning and federal estate taxes change frequently. Making sure everything is in order or determining whether changes should be made is always a wise move.
What Should I Include in My Estate Plan?
Where Do I Start?
A thorough estate plan should include more than a trust or will. If you have any minor children or care for a vulnerable adult, you should have guardianship in place. Trusts are also a good tool to pass on assets that can also allow you to control the contents while you are alive. You can also appoint a health care agent and power of attorney to make decisions on your behalf when you cannot, and a health care directive can specify your medical wishes for you as well.
What Is Probate and Is It Necessary?
In general, whenever a person dies with property titled in their name, probate is needed. Usually, that property has to be re-titled and transferred to the deceased person’s heirs.
Probate can be an expensive and lengthy process of validating and approving a deceased individual’s will and making sure all debts are paid and the assets are distributed according to the terms of the will.
However, if the deceased person held all of their property jointly with another individual, probate may not be necessary. Furthermore, if the deceased person had designated a beneficiary for all their estate assets, probate may not be necessary. But, if the beneficiary of a certain asset died before the decedent or if the decedent forgot to name a beneficiary for a particular asset, then a probate proceeding may be needed.
With careful Colorado estate planning, probate may be avoided. Also, your estate may qualify for simplified “small estate” probate procedures under Colorado law (Rev. Stat. § 15-12-1203).
Where Do I Start?
If you are looking to begin your estate plan or update it to meet your current wishes, contact a Colorado estate planning attorney you can trust today.
Contact my office in Centennial to schedule your initial consultation by calling 303-222-7021 or emailing me here to take the first step in your estate plan.