Learn about legacy planning, end-of-life planning, and probate planning in Colorado.
What is estate planning?
Estate planning is the process of arranging who will receive your assets, like your house, savings, or personal items, after you’ve passed away and what will happen if you become incapacitated and unable to make decisions for yourself. This planning includes creating a will, possibly setting up trusts, naming guardians for minors, and making arrangements for your own care if you become unable to make decisions.
Contrary to popular belief, estate planning is not reserved for the wealthy; it's about making sure your wishes are known and honored, reducing potential family disputes, and possibly lowering taxes or legal hurdles for your loved ones. Everyone has an estate. Your estate includes your bank accounts, car, real estate including your primary residence, investments, life insurance, and personal items. If you don’t have a plan, the government has one for you. So, it’s a good idea to create an estate plan with an attorney in order to make sure your assets and possessions land in the right hands. The goal is to ensure your assets are protected and smoothly transitioned to your beneficiaries, reflecting your wishes and making things easier for your family.
What is a will?
A will is a legal document where you outline your wishes regarding how your assets—like money, property, and personal items—should be distributed after you pass away. It also lets you name a guardian for your children if they're minors and an executor, who is responsible for carrying out your instructions. Creating a will is a way to ensure your assets are given to the people or organizations you choose, rather than being distributed according to state laws by default. It's an essential part of estate planning, helping to avoid potential disputes among heirs.
What is a trust?
A trust is a legal arrangement where one person (the trustee) holds and manages assets—like money, real estate, or investments—on behalf of another (the beneficiary). You set it up to control how and when your assets are distributed, often to avoid probate, reduce taxes, or protect assets from creditors. It can be set up while you're alive (living trust) or after your death (testamentary trust). Trusts are versatile, allowing you to specify exact terms under which beneficiaries receive your assets, offering both privacy and control over your estate's future.
Why is estate planning important?
If you don’t have a plan, the government has one for you. Estate planning is crucial because without it, the government has a default plan for your assets and decisions, which might not match your wishes. This is not to mention dealing with the government will inevitably make your death or incapacitation much harder on your relatives and loved ones. An estate plan allows you to control who receives your assets, manages your healthcare and financial affairs. They also reduce taxes and legal fees and government involvement.
Who needs estate planning?
In short, everyone needs an estate plan. Even if you do not have much in way of assets, if you have any family (especially minor children) or any possessions including a bank account, car, home, or personal possessions, you should have an estate plan. Estate planning ensures your assets go to chosen loved ones and that your healthcare wishes are honored. Most importantly, estate plans minimize government involvement in your family. Estate planning is about taking control rather than leaving your legacy in the hands of politicians.
When should I think about getting a will, trust, or estate plan?
You should begin estate planning the moment you have assets or dependents. A proper estate plan ensures your wishes for your assets, healthcare, and dependents are respected and protected, avoiding default state decisions, fighting, and high legal fees for your family.
How much does estate planning cost?
People often ask, “how much does an estate planning lawyer charge?” and the answer can vary from a few hundred for a simple will to several thousand for more complex plans involving trusts and tax strategies. How much your estate plan will cost will depend on your assets, location, complexity of the plan, and the estate planning attorneys you consult.
If you are a high net worth individual, it is a good idea to not skimp on your estate plan and hire a well-reviewed, well-respected estate planning attorney. You and your family will most likely lose a lot more money than you save by cheaping out.
What happens if you die without a will, trust, or estate plan?
If you die without a will, trust, or estate plan, state laws, known as intestacy laws, decide how your assets are divided among your family. What lawmakers decide might not match your wishes. Plus, this process can be lengthy, costly, and very stressful for your loved ones.
How to start estate planning?
To start estate planning, you should inventory your assets (property, accounts, valuable items) and debts, decide who you want to inherit your assets, and choose an executor for your will. You also must healthcare directives and a power of attorney. It is crucial to consult an estate planning attorney for guidance and to draft legal documents. You also must review and update your plan regularly or after major life changes.
How to choose an estate planning and trust attorney?
Look for an attorney specializing in estate planning and trusts, with a good reputation and experience. Ask for recommendations from friends or financial advisors. Check their credentials and state bar association status. Choose someone you're comfortable discussing personal matters with, who explains complex legal terms clearly. Consider their fees and whether they provide comprehensive planning services. A good attorney will listen to your needs and tailor advice to your specific situation.
