If you were incapacitated or lost your life in an unforeseen event, what would your family do? Would your family be taken care of if something happened to you? Would your assets go where you wanted them to once you were gone? Issues like these make inheritance planning paramount for Coloradoans.
The Colorado estate planning attorneys at Skipton Law, LLC want to help prepare your family for the difficult times after losing a loved one. That’s why we have assembled some dos and don’ts about estate planning that may help you and your family.
The Dos of Colorado Estate and Inheritance Planning
Do Take Inventory
An excellent first step in the estate planning process is surveying your tangible and intangible assets. Knowing what you have will make planning the distribution of those assets much easier, and you will be less likely to miss something. Note assets such as:
- Collectibles and other valuables (tangible)
- Jewelry (tangible)
- Properties such as homes or other real estate (tangible)
- Vehicles (tangible)
- Businesses (tangible/intangible)
- Checking accounts (intangible)
- Life insurance (intangible)
- Retirement plans (intangible)
- Savings accounts (intangible)
- Stocks, bonds and other investments (intangible)
Do Avoid Probate
Probate is the process in which the state distributes your estate after you pass. Even if you have a will, assets that do not pass directly to a beneficiary must go through probate. However, this process can take months or years if the estate is complex enough. It also costs a percentage of the estate to go through probate. Lastly, probate is a public process, so anyone can look up what is in your assets. For the sake of cost, time and privacy it is in your best interest to avoid probate.
Do Get Estate Planning Documents
Estate planning documents will help you avoid probate and can help when it comes to estate taxes. A will is the most common estate document used, and though it can appoint custody of minors and pets as well as distribute assets, it is still subject to probate.
A trust is better at avoiding probate, and the right trust may also have tax benefits. Though Colorado does not currently have estate tax, there are still federal tax limits that your estate must meet to avoid taxation. These tax limits can fluctuate from year to year, so it is better to have an assets protection trust that takes taxation into account.
Trusts, however, cannot appoint custody like a will can and neither document can govern decisions on your health while you are alive. Durable power of attorney, health care power attorney, and advanced health care directives are the only estate planning documents that can convey who oversees your affairs should you become incapacitated.
Each document handles an important specific aspect of your estate. So, you want to make sure you draft the documents needed to properly address your specific circumstances.
The Don’ts of Colorado Estate and Inheritance Planning
Don’t Forget Digital Assets
Do you have Bitcoin, Ethereum or other cryptocurrencies? What about NFT’s, social media accounts or online trading portfolios? If you have not cataloged your login credentials or made them easy for family members to access, these digital assets could be lost when you pass. Stories of cryptocurrency locked on hard drives with no passwords are not simply gossip, it happens often. Online financial accounts that default to banks or financial companies after not being accessed for years are not fairytales. Account for your digital assets or risk your family never benefiting from them.
Don’t Stop Working on Your Estate
As long as you are alive, your estate is a work in progress. Marriages, divorces, the birth of children and even work promotions may change the way you want your estate distributed. This means that your estate plan needs to adjust accordingly. Reviewing your documents every three to five years is a good rule of thumb to stay on top of things. It may even surprise you to see what plans you forgot about as the years have gone by.
Don’t Try to Do It Yourself
There are many online solutions for estate planning, but as we mentioned above, there are many documents you will need to properly handle your estate. Each of these documents must be written to specifically address your estate’s needs, and the cookie cutter language in online DIY solutions often do not address your estate’s needs. This is even true when you only have minimal assets to be distributed.
Rely on professionals for the help you need. Here at Skipton Law, LLC, we have years of experience helping individuals create the right estate plan for their needs. We know the documents you need, and the language needed to make those documents strong. Remember, weak estate documents leave themselves open to challenges from greedy individuals, which could lead to infighting amongst your family members. Don’t let your legacy become a dividing force for your family, call (720) 770-3880 or fill out our online contact form today.
Related Readings:
- How Do I Find an Estate Planning Attorney
- What is the Difference Between a Probate Attorney and Estate Planning Attorney
- What is the Estate Planning Process
- Why is Estate Planning Important
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