Every adult should have an estate plan, especially those who have family relying on them or who have enough assets that a probate would be required (more on that below). While contemplating your mortality is never pleasant, easing the transition of your property and providing for the handling of your affairs by a trusted person or entity can give you peace of mind. It can also save you and your family considerable time, hassle, and money that would otherwise get spent on taxes, court costs, and legal fees. Assistance from an estate planning lawyer is essential if you wish to have an estate plan that is properly tailored to your situation.
What is an Estate?
Your estate consists of your property, including real estate, your personal effects, insurance policies, retirement savings, bank accounts, stocks, and any business interests or investments. An estate plan contains your instructions on how your property and interests are to be transferred to your heirs or other beneficiaries. It also specifies who will be responsible for handling your financial affairs and medical care if you become disabled by a stroke, dementia, traumatic injury, or other serious medical condition.
What an Estate Plan Accomplishes
Estate planning consists of more than just drafting a will. While every adult does need a will, many people erroneously believe that having one will allow their loved ones to take ownership of their assets without having to go through the probate process. In Colorado, however, a probate is required for anyone who dies with more than $64,000 or who owns real estate in his or her own name.
Many people want to help their loved ones avoid probate. Not only is probate a process that is open to the public, but it can mean having your estate tied up in court for months, sometimes years, delaying payments to your beneficiaries, creating undue hardships for your relatives, and resulting in taxes and expenditures that could have been legally avoided.
There are ways to avoid this outcome. You can, for example, title your property into a “living trust.”
You continue to control the trust’s assets during your lifetime, but after you pass away, a successor trustee of your choosing steps in and distributes the assets to your heirs or other beneficiaries according to your instructions. Other types of trusts allow you to accomplish other goals. If you have significant retirement assets, you might want to use a “standalone retirement trust” to pass the tax benefits you are enjoying along to your heirs. If you have a special needs child, you can use a “special needs trust” to provide for that child without jeopardizing his or her continued receipt of certain public benefits.
The McKenzie Law Firm has a Colorado estate planning lawyer for your needs. Along with helping you set up appropriate trusts and drafting a will for you, our team can further advise you on:
• Long term healthcare planning
• Appointing your agent with a medical power of attorney
• Durable power of attorney for financial matters
• Coordinating your life insurance and retirement savings with your will and trusts
• Conservatorships and guardianships
• Asset protection measures, such as by setting up a limited liability company or domestic asset protection trust
• Advice on gifting If your estate exceeds the estate tax exemption threshold
• Naming a charity as beneficiary
• “Pay on Death,” or POD, accounts
• Business succession advice
Estate Plan Documents
Dan McKenzie is a Colorado estate planning lawyer who can advise you on how to accomplish your goals while minimizing taxes, fees, and administrative burdens associated with estate administration. Some of the documents that Denver estate planning lawyer Dan McKenzie provides for his clients include:
• Last Will and Testament
• Revocable and irrevocable trusts
• Durable power of attorney for financial matters
• Incorporation documents for a family LLC or family limited partnership
• Advanced health care directives (also known as “living wills”)
• Medical power of attorney
• Life insurance instruments
• Beneficiary designation forms
• Prenuptial agreements
• Business succession plans
Probate and Litigation
Unfortunately, not everyone engages in careful estate planning. If you fail to create instructions about what should happen to your property after death, either through a will, trusts, or beneficiary designations, the state of Colorado will decide to whom your assets pass.
Of course, an incomplete, out of date, or badly drafted plan can be worse than no plan at all. Such plans can lead to court fights among family members about what you really wanted and why the documents you left behind should be ignored. Appointing the wrong people to fill important roles, such as trustee or personal representative, can also be a recipe for disaster.
Call a Denver estate planning lawyer from the McKenzie Law Firm today to discuss the best way to handle your affairs and to avoid future problems and unnecessary expenses. We have experience with estate planning, probate, and litigation, and will advise you not only on how to create legally valid documents, but will counsel you on how to put together a plan that achieves your goals and takes care of your family.