What Can An Estate Plan Do For You?

Estate Plans are a set of documents tailored to meet your goals for the future of yourself and your loved ones.

Your goals may be to plan for retirement, provide for your family, preserve your assets, donate to charity, minimize taxation, avoid probate, or designate guardians for your minor children if the unexpected happens. Estate planning can accomplish all of this and more, including:

• Selecting who will act as medical and financial agent in the event of your incapacity

• Minimizing or avoiding income taxes for your beneficiaries

• Protecting assets for the benefit of persons who are unable to manage their personal finances

• Deflecting possible will contests or claims by disgruntled heirs

• Anticipating any problem assets and providing for their disposition

• Planning for the future of your business

• And any other issues that might affect the well-being of the individual’s family or business

The lack of an up-to-date and effective estate plan can create an unnecessary financial and emotional burden on your surviving family. Some issues and consequences that frequently arise include:

• Making gifts directly to minor children instead of in trust can lead to more expensive court conservatorships

• Using joint tenancy or payable on death (POD) forms of ownership as will substitutes can create taxable gifts or provide beneficiaries with more control over your assets than intended

• Failing to plan for disgruntled heirs or potential creditors can trigger costly court battles and family feuds

• Neglecting to name guardians for minor children may cause costly litigation or result in unintended guardianship of the children

• Making outright gifts to incapacitated persons who are on Medicaid can, at least temporarily, make them ineligible for benefits

• Neglecting to address changes in marital status can lead to unintended disposition of your assets 

A complete estate plan will provide direction to your loved ones about your medical and financial goals in the event of incapacity and how your assets should be distributed after your passing. It can ease family member’s worries and prevent disputes. Your family will know what you want and how to carry out your wishes.

Blog

What You Need to Know About Creating a Will

What You Need to Know About Creating a Will

You’ve probably heard someone talking about creating their will. Or maybe you’ve always thought you needed one but just didn’t think it was the right time. Or maybe you know you need one but aren’t sure what you need to know. Whatever your case, this blog has you covered!

Why do You Need a Will?

You need a will to let everyone know your wishes. When everyone knows what you wanted to happen, they are far less likely to fight with each other. So many family feuds are started after the death of a loved one. A will can prevent this by clearly stating who gets what and who will care for your children.

A will allows you to make decisions about your family and your stuff at your death. You get to decide who gets your home, your great-grandmother’s diamond ring, your collection of Hallmark Christmas ornaments, or the priceless love letter from your deceased spouse. You get to decide who will take care of your children. What if you think your sister is way too irresponsible to handle your three kids? If you die without a will and your irresponsible sister is your closest living relative, the court will most likely giver her your precious kiddos. But, if you die with a will that says you want your favorite and most responsible friend to take care of your kids, your sister can’t do anything about it.

Who Gets Your Stuff?

Anyone you want! You can name anyone as a beneficiary of your estate, except for witnesses to the signing of your will. So make sure your witness isn’t also a named beneficiary in your will. As long as your third cousin Suzie isn’t a witness, then go ahead and give her that million-dollar cabin in Steamboat Springs.

Who’s Going to Raise Your Beloved Children?

Deciding who will care for your children is often the most difficult decision you will have to make. Usually, your spouse will take over, but what if they predecease you? Or what if you both are in a tragic helicopter accident? Then you will need to think about who you trust to raise your children in a way that would make you happy and proud. Don’t forget to talk to this person before naming them as guardian. Make sure that they are on board. This is a great responsibility and, as I mentioned above, you don’t want someone you don’t trust taking this on.

Who Will Manage Your Child’s Finances?

Sometimes this person is the same person who is caring for your kids. But sometimes that may not be desirable. This person will manage the financial affairs of your child. They may be responsible for a lot of money, especially if you have life insurance. If you don’t name a conservator, the court will appoint one and that will often be the same person as the guardian.

What if You Don’t Create a Will?

When someone dies without a will, the laws of intestacy kick in. These laws and the court will determine who gets what, who will care for your children, and who will manage your children’s assets. In a very general manner, your closest living relatives will receive your property. If you have a spouse, everything goes to him or her. If you have adult children and no spouse, your adult children receive everything in equal shares.

What Else do You Need to Know About Creating a Will?

This will really be determined by your unique estate planning needs. In some cases, a trust with a pour-over will is the best fit. Other times, a straightforward will is all that is needed. Since your estate plan is tailored specifically to you, the next step is to talk to an attorney about your estate planning needs.

Newlyweds? Congratulations! Now get to work planning your future.

Newlyweds? Congratulations! Now get to work planning your future.

If you are here, you must be a newlywed or plan to be one soon. Congratulations! Planning your wedding was good preparation for what you need to do next. Now you have the experience of juggling moving parts, filling out paperwork, talking to a million people about your personal life, and making tough decisions with your spouse. Actually, this next part might be easier than planning your wedding.

Talk to Your Spouse

If you haven’t already done so, you and your spouse need to have a serious talk about how you want to handle your finances as a married couple. In Colorado, you and your spouse can keep separate property if you choose to, or you can choose to combine your assets. This decision is up to you two, but it is an important decision to make early on.

Beneficiary Designations

As a newlywed, you should look at all of your accounts that have a beneficiary designation or transfer on death designation. You want to make sure that the correct person is named on these accounts. If you want your assets to pass to your spouse, you need to update these accounts to reflect that. Double check the designations on your checking and savings accounts, life insurance, investments (stocks, bonds, mutual funds, etc.), retirement accounts (401(k), IRA, Roth IRA, etc.), pensions, military benefits, trusts, and any other accounts or assets that have a beneficiary designation.

Consolidate

Now that you are married you might want to consolidate some accounts. You may not need or want separate checking accounts, health insurance plans, car insurance, cell phone plans, or Netflix accounts. Take a look at what you each have individually and see if you can save some money by combining accounts.

Specialists

Do you have life insurance? A financial advisor? A CPA? If not, now is a great time to start looking.

Get Organized

This is also a great time to get organized! Gather your important documents and keep them in a safe place, like a fireproof filing cabinet. You should include your birth certificates, marriage licenses, social security cards (or numbers), passports, prenuptial agreements, divorce decrees, citizenship documents, your children’s documents, and any other important documents. In this day and age, you should also organize usernames and passwords for your devices and online accounts.

Your Estate Plan

Seeing as this is an estate planning blog, I can’t forget to mention that getting married is the perfect time to update or create your estate plan! You want to make sure your existing estate plan still reflects your wishes. If it doesn’t, you need to update it as soon as you get back from your honeymoon. You and your spouse should see an attorney to discuss how you want your assets distributed, who you want to make medical and financial decisions on your behalf, and what types of medical treatments are acceptable to you. Your estate plan will cover all of these issues plus guardianship of your children, trusts for the benefit of your kids, and anything else you feel strongly about including in your estate plan.

Beyond the Will – Estate Planning for Incapacity

Beyond the Will – Estate Planning for Incapacity

When most people think of estate planning, they think of wills and trusts. Those are both important aspects of your estate plan but they are not the only pieces to the puzzle. Included in every estate plan I prepare is a medical power of attorney, financial power of attorney, and a living will (formally known as an advanced directive for medical or surgical treatment). Sometimes, these documents become more important than the will or the trust.

The Living Will

The living will comes into play when your attending physician and a second physician determine either that you have a terminal condition and cannot make decisions on your own behalf or when they determine that you are in a persistent vegetative state. To prepare this document, you want to consider the types of medical care you want under these different circumstances.

If you have a terminal condition or are in a persistent vegetative state, do you want your doctor to prolong the dying process through medical procedures or through artificial hydration or nutrition? Do you want your doctor to continue this treatment indefinitely? Or for a specified period of time to allow your loved ones to gather and say their goodbyes? Or do you not want these procedures administered at all?

Do you have any other specific directions you would like your doctors to follow? Do you have religious beliefs that you need your doctor to know about ahead of time? Are there certain people who you want to be able to talk to your doctor about your medical care? Do you want to be an organ or tissue donor?

Medical Power of Attorney

Your medical POA can be a standing power or can only be triggered by your incapacity. This document names the person you want to stand in your shoes to make medical decisions on your behalf. They can talk with your doctor about your medical care and treatment. They will use your living will as a guide when making these decisions. You can choose to allow this person to override your living will in uncertain situations. This person will also communicate with your financial power of attorney to ensure medical bills are paid.

Financial Power of Attorney

Your financial POA can also be a standing power or be triggered by your incapacity. This documents names the person you want to stand in your shoes to make financial decisions on your behalf. They will have full access to your finances as though they were dealing with their own finances. They will have access to your bank accounts and your bills. The expectation is that they will act in your best interest. They will pay the bills that need to be paid and they will only use your money on you.

Your Homework

These documents can sometimes be overlooked. But my hope is that after reading this, you will recognize that there is a lot to consider beyond who gets what when you die. These are important decisions that affect your financial, emotional, and physical well-being during life. Your homework is to spend some time talking to your loved ones and sitting with these questions. It is important that you are comfortable with your decisions and that your estate plan fully reflects them.