The Biggest Risk Isn't Death — It's Incapacity

Most people walk into an estate planning conversation focused on what happens after they die. That's understandable. But I always try to redirect that focus, because your most immediate risk probably isn't death. It's an unexpected event that leaves you unable to manage your own affairs while you're still alive.

I use a personal example to illustrate this. When my wife and I moved to Colorado, I arrived 10 days before she did. I needed a power of attorney just to sign the closing documents on our house. She was perfectly healthy — she just wasn't there. Now imagine what happens when someone can't be there because of a medical emergency, and no power of attorney exists. Suddenly your family can't access your bank accounts, can't talk to your doctors, can't do anything without going to court to get permission.

That court process — called a conservatorship or guardianship — is invasive, expensive, and slow. You need background checks, credit checks, doctor testimony, court appearances, and then ongoing annual reporting once it's granted. All of that can be avoided with a simple financial power of attorney and medical power of attorney done in advance.

A Will Does Not Avoid Probate

This surprises a lot of people. A will is an important document, but it doesn't keep your estate out of court. In Colorado, if you pass away owning real estate or assets totaling more than $88,000 — not counting jointly held assets, designated beneficiary accounts, or assets in a trust — your estate goes through probate regardless of whether you have a will.

Probate exists partly because you have creditors, not just heirs. Somebody has to deal with your last utility bill, your HOA dues, your property taxes while the house is being sold. The court is there to oversee that process and make sure everyone gets paid in the right order.

A trust, properly funded, can avoid that process. But the key word is "funded." A trust that's never had assets transferred into it is just an empty container. We see this constantly — people who created a trust years ago and assumed they were set, without ever actually retitling their home or accounts into it.

"Equal" Isn't Always Fair — And Families Fight About More Than Money

One of the most common mistakes I see in estate plans is the assumption that an equal split among children is simple and conflict-free. It rarely is, especially when one child has been doing significantly more caregiving than the others.

The person named as your personal representative or trustee has a legal obligation to follow your instructions — they can't just "figure it out." So if the plan says equal, it means equal, even if one sibling spent years providing hands-on care while others didn't.

The most common trigger for conflict in estate administration? Someone living in the family home who doesn't own it. Every single contested probate I've handled has involved this dynamic. Both sides always have a story. Neither side feels like the bad guy. And by the time it gets to that point, the relationship is usually already broken — sometimes permanently.

Choosing the right person to manage your estate may matter more than the specific instructions you leave them. And that person should know you've chosen them before you need them.

The Documents Every Adult Should Have

We covered a lot of ground in the podcast, but here are the core documents that every adult — regardless of age or asset level — should have in place:

• Will — directs what happens to assets in your name when you pass
• Financial Power of Attorney — authorizes someone to manage your finances if you can't
• Medical Power of Attorney — authorizes someone to make healthcare decisions on your behalf
• Living Will (Advance Directive) — documents your wishes if you're unresponsive and doctors determine further treatment is only prolonging death
• Memorial Instructions — guidance for your family on how you want your arrangements handled

If you have real estate, minor children, a blended family, or significant assets, a trust is also worth a serious conversation.

How Often Should You Update Your Plan?

More often than you think. In my experience, people consistently underestimate how old their documents are — usually by a factor of two. If you think it's been five years, it's probably been ten.

We reach out to our clients annually as a reminder to pull their plan back off the shelf. The triggers that warrant a closer look include any change in family through birth, death, marriage, or divorce; a significant change in assets; or a major life transition like a move or retirement.

That said, there's no universal rule. A 20-year-old will that still accurately reflects your family and your wishes may be perfectly fine. A plan that's nine months old may already be completely wrong.

If You Haven't Started Yet, You're in Good Company

Roughly 70% of Americans pass away without any will in place. So if you've been putting this off, you're not alone — and there's nothing to be embarrassed about. You do have an estate plan of a sort: Colorado's intestacy laws will govern what happens to your assets if you don't have one of your own. The question is whether the state's default plan matches what you would have chosen.

It usually doesn't.

If this conversation raised questions about your own plan — or the lack of one — we'd be glad to help. You can schedule a consultation here, or call us at 720-821-7604.

The McKenzie Law Firm, LLC serves clients throughout the Denver metro area in estate planning, estate administration, and small business law.