No matter the size of your estate, it is important to create a plan for what happens if you become incapacitated or die. You can designate who inherits your assets, provide for your minor children, and specify your wishes about medical treatment. Get an overview of estate planning in Colorado below.
Writing a valid will is the only way to be sure your assets go to the people or organizations you choose. It can be as simple or complicated as you need. It's a good idea to name an executor in your will, too. Without a will, the state of Colorado will decide who inherits your estate. For example, if you are married with children, your spouse will get half of your estate and your children will divide the remainder equally. If you have no living heirs, the state takes it all.
Your Estate and Probate
Probate is the legal process that distributes your estate according to your will or state law. Your heirs may not be able to avoid it completely, but you can set up your estate so that many assets will transfer automatically at your death:
- Joint Ownership (with right of survivorship): When you own property or other assets with others your share transfers automatically to the surviving owners when you die.
- Designate beneficiaries: Do this for any assets that allow it, like IRAs and annuities, so they will go straight to the people you designate.
If your total estate value in Colorado is under $63,000, as of 2013, and does not include any real property, your heirs may be able to claim their shares with an affidavit for small estates.
Power of Attorney for Your Finances
You can give someone the authority to access your financial accounts and make decisions for you if you become unable. That person is called your agent and has your financial power of attorney. You can also create a limited power of attorney, granting authority only for specific acts.
Your Health Care Wishes
You can take steps to ensure your doctors know what medical care you want if you become unable to tell them:
- Living will: This document outlines whether you want life-sustaining treatment if your condition is terminal or you are in a permanent coma.
- Healthcare Power of Attorney: Much like the financial power of attorney, this document authorizes someone you trust to make medical decisions for you.
Colorado has simple forms you can use. If you want to include items not on these forms, such as organ donation or disposition of your remains, talk with an estate planning lawyer about creating customized documents.
Additional Planning Considerations
Your life circumstances will determine additional estate planning options you may need to think about. For example, if you have a family, you may want enough life insurance coverage to take care of them. If you own or co-own a business, be sure you have a succession plan or other agreement in place for the transfer of your share.
Get Legal Advice for Estate Planning
Both state and federal laws govern various aspects of estate law. To ensure your plan meets your needs and is legally binding, it's a good idea to talk with a Colorado estate planning lawyer.