Simply stated, estate planning refers to the process of developing a plan for what will happen to your assets after you pass on. While it may sound as straightforward as deciding who you want to give your property to, developing a comprehensive and effective Colorado estate plan involves a significant amount of thought and care.
Creating a thoughtful estate plan allows you to take advantage of specific benefits, such as shielding assets from taxation and reducing the need for your estate to go through the probate process. At the same time, it can help you avoid the pitfalls associated with an unclear or rushed estate plan. Namely, these include burdening your loved ones with difficult decisions and, potentially, causing conflict among family members.
An essential element of almost any estate plan is the will. A will is a written document outlining who will receive your property and other assets upon your death. Creating a will allows you to name your heirs and allocate your assets among them; however, you decide. If someone dies without a will, their property will still pass on to their heirs; however, because there is no way for the state to determine that person’s wishes, their assets will be distributed according to the Colorado intestacy laws.
Assuming a valid will is in effect, once a person passes on, their will goes through the Colorado probate process. Probate is the process by which the court validates a will and effectuates the deceased’s intentions. Typically, the court will appoint a loved one as the personal representative of the estate. The personal representative will gather all the estate assets, pay any liabilities, and then distribute the assets to the beneficiaries according to the will. Not all assets need to go through probate; Colorado allows for smaller estates to go through “summary probate.”
It is also important to understand that not all assets are subject to probate. And this is where the importance of a more comprehensive estate plan is realized. For example, particular jointly held property and accounts will not need to go through the probate process. Similarly, accounts with beneficiary designations can be transferred directly to the beneficiary without the need for probate.
Trusts are also an important part of a Colorado estate plan. A trust is a legal entity that can legally own property. Thus, rather than transfer property to a loved one upon their death, a person can transfer the property to a trust, which may avoid the probate process.
Of course, this has been a very brief overview of the Boulder estate planning process. Bookmark our page for valuable future updates and tips.
Consult with an Experienced Boulder Valley Estate Planning Law Firm
Discussing what happens with your property after you pass on is not something anyone looks forward to doing; however, few things are more critical to the future of your family. At the Braverman Law Group, we take a practical approach to Colorado estate planning, starting at the most basic needs. From there, we can help educate you regarding additional steps and protections you can implement to safeguard your assets. To learn more, and to speak with one of our dedicated estate planning lawyers today, call 303-800-1588 to schedule a free consultation.