Estate planning is the practice of setting up documents needed by an individual to ensure the management and transfer of their estate both during their life and after death, as well as providing for the continuity of decision-making in the event you become incapacitated, such as if you become ill and unable to make decisions, including the end-of-life issues when you are terminal or you’re in a situation in which decisions need to be made regarding end of life.
Everyone over the age of 18 in the state of Colorado should, at a minimum, get a declaration or what’s called a living will, which deals with end-of-life issues, as well as a medical power of attorney, which appoints a healthcare agent in the event that you become unable to make healthcare decisions for yourself. That is one part of estate planning, but if you have any assets in your estate, you should consider setting up a dispositional document, which for a simple small estate, would be a will.
What Are Some Factors that Contribute to a Well Designed Estate Plan?
The factors that contribute a well-designed estate plan vary between individuals and families and are discovered as a result of a strong relationship between an estate planning attorney and a client. And estate planning attorney should spend enough time with the client to get an understanding and a sense of what their interests are and what’s important to them with regard to the transfer of their wealth, such as whether they are charitable, how they feel about their children and whether they trust their spouse; to craft a truly well-designed estate plan, knowing the clients goals and needs is essential.
Of course, the best estate plans also require experienced and knowledgeable attorneys who realize there is no “One document fits all” plan. That would be an attorney I’d recommend running from; if you walk into their office or see an ad and they tell you, “You need one of these,” go elsewhere, because that attorney feels that one document fits all, and it doesn’t. In estate planning, each client’s file is reviewed and consideration is given as to which documents each particular client needs to meet their goals based on their particular family situation, their particular net worth and their values.
What is a Will?
A will is a dispositional signed document designed to only take effect upon the death of the individual. Since a will is a revocable document, you can destroy, change, amend it or modify it at any point up to death. It is designed to provide directions for the disposition of your assets with regard to who receive them and in what proportion, and to appoint a guardian and a conservator of your minor children, if you have any.
A will can also contain trusts, which can be designed to provide your heirs with their needs after your death. For example, if you have a couple of young children, a Contingent or a Testamentary trust that would provide someone to manage their share of their inheritance if they are not old enough to handle that. In addition, the will appoints the Personal Representative; at least, that’s what it’s called in Colorado; many states still use the word Executor or Executrix.
An important thing for people to realize is that you have to be very careful when appointing people like trustees or Personal Representative; they have to be both competent and trustworthy, because their job is to not make decisions, but to carry out your wishes with regard to the details of your will, with regard to how your property is to be divided.
What if Someone Dies Without a Will?
If someone dies without a will, that is called “dying intestate,” and at that point the state of Colorado essentially writes a will for you. If you die intestate, the attorney working with the family will look to the Colorado statutes to determine who the beneficiaries are under the will, and secondarily, then under statute, it would have to be determined as to who has the right and priority to be appointed as personal representative of the estate. The probate can be done under the same process as under a will; it doesn’t have to be more complicated when it comes to administration but it does mean that your assets may or may not go to the people that you would have wanted it to go to had you written your own will.
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