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Lakewood, Colorado Elder Law And Estate Planning Law Blog

Charitable giving might convey tax benefits

Charitable giving can be an important part of a comprehensive Colorado estate plan. In addition to establishing a person's legacy after they've passed away, philanthropy may convey tax benefits to the estate or heirs. Regardless of the specific reasons for charitable giving, gifts can usually be readily incorporated into the estate plan by an attorney.

The first step is choosing which causes or organizations will benefit from the philanthropic donations. People who have histories of giving in the past might review their giving habits to make a decision. It can be helpful to think about which community issues are of concern to the person or family. Many estate owners also consider how certain gifts might impact a legacy.

How to prevent family conflicts over a will

One of the reasons Colorado residents draft wills is to prevent family conflicts over their wishes once they pass away from occurring. However, the mere presence of a will won't magically ensure that family squabbles won't arise. Careful planning is required to make sure that someone's estate plan is executed with minimal drama.

For example, estate planning experts say that it is essential to name the right executor of the will. While many people choose someone based on family hierarchy, such as the oldest child, it is more important to choose someone who is up to the challenge. This means that they should be ethical, responsible and organized. To this end, it may be advisable to appoint a corporate trustee or a professional fiduciary as the executor. Next, it is important to remember to include personal property in the will. Small things, such as holiday decorations or costume jewelry, can set off major fights. Experts say it's helpful for people to ask their children what personal items mean the most to them before writing the will.

Taxes and other reasons to have an estate plan

Some people in Colorado may be among the 42 percent of adults who said they did not have an estate plan in a survey conducted by Caring.com. While estate planning may be a difficult subject to address or some might think they do not need a plan because they have few assets, it can be important for everyone.

For wealthy individuals, estate planning can be important in minimizing various types of taxes. Wealthy people may also use an estate plan to set up charitable giving in the form of a family foundation or a trust. Frivolous lawsuits may be a danger for wealthy people, and they can set up trusts or other vehicles that will help protect their assets. They may also want to look into what protection can be offered by insurance. Another element of estate planning may be using it as an opportunity to talk to children about the family wealth and prepare them to inherit and manage it.

Choosing the most effective estate planning tools

If you are like many, you delayed creating an estate plan because it seemed complicated and expensive to do. When you finally decided that a plan was an important way to protect your assets and your loved ones, it is understandable that you would want to choose the simplest way to do so. Most people consider writing a will as the most basic estate planning step to take.

Writing a will may be a straightforward way to assign your assets to your loved ones, but it may not be the most effective way to protect your wealth or your beneficiaries. In many scenarios, a revocable trust may be a more prudent avenue for preparing your estate.

Estate planning is also important for young people

Despite widespread information about the importance of planning for the future, many adults in Colorado still do not have a will or other estate documents. People who are not married and do not have children may be some of the least likely to make an estate plan, and young people in general may see it as a task for the future. One survey found that 78 percent of millennials have not made a will. In many cases, people don't want to think about death or complicated familial relationships.

However, by creating a will, an individual can decide how they want their estate to be handled after death and potentially save their loved ones time and money. When estate owners die without a will, they are considered intestate, which gives state law priority in determining the future of the assets. In most cases, the estates of unmarried people without children will pass to their parents. However, people may want to protect long-term partners or other close relationships who are not part of the state's intestacy law.

Planning for digital assets in an estate plan

Colorado and many other states have passed laws that allow executors to manage digital assets just as they would other types of assets. However, people still need to take steps to ensure that executors and other loved ones are able to access the assets both legally and from a technology standpoint.

One expert says that instead of using a USB to store information such as key locations, passphrases, PINs and more, a pen and paper is the best way to record information. There should be two copies of the documents, and they should be kept with other estate planning information. These lists may need to be updated weekly if a person trades frequently. Once a year may be often enough for people who are less frequent traders. One probate judge has pointed out that the court system will need to get a more sophisticated understanding of cryptocurrency in the next few years.

Special needs trusts can help families support loved ones

For parents in Colorado who want to provide for their children with special needs for the future, a special needs trust can play an important role in long-term support that supplements income from government programs. By creating this type of trust, the beneficiary can still receive government support while also accessing the benefits of the trusts. There are several different types of special needs trusts that families can choose to help provide for their children over the years.

In order to determine which type of trust is most appropriate, it is important to understand how trusts function. A donor supplies the funds that make up the principal of the trust, a trustee manages the funds according to the donor's direction, and a beneficiary receives income from the trust. They are used in an array of estate planning solutions and can provide a greater amount of control to the donor in determining how assets are distributed, even after death.

Protecting a legacy as part of an estate plan

Some people in Colorado who are creating estate plans might want to consider whether leaving a business and complicated assets in the control of family members is the right choice. People may want to provide for their spouses and children and assume they have no choice but to mandate that their family members manage those assets, but this is not the case. Other individuals can be chosen to run a business and manage assets while loved ones still benefit financially.

In addition to separating family members from controlling his or her legacy, a person may also want to consider whether different people should be chosen to manage the assets and act as a liaison to the family. The person who is the best choice for taking over the business may not be the right choice for handling distributions to family members.

Could certain mistakes derail your estate plan?

Colorado readers understand the many benefits of having a strong estate plan in place. However, even your best efforts to plan well and address specific issues can be futile if you commit certain mistakes as you draft your plan. It is beneficial to be certain missteps and errors will not affect your future.

When there is a problem with an estate plan, it can cause complications in the future. You may find that your plan is no longer valid, or your family may learn after your passing that mistakes could require them to deal with costly and stressful complications. There is great benefit in having guidance as you draft your plan in order to ensure the full protection of your interests.

Just moved to Colorado? You may want to check your estate plan.

Many different things could lead to a person moving to a new part of the country. One is a desire to move to a given place to retire. Colorado may be a popular target when it comes to this. A WalletHub report ranked it the second best place in the whole country to retire.

When a person moves to a new state, there are many things it can be important for him or her to check. This includes his or her estate plan. Moving to a new state is one of the things that can necessitate updating such a plan.

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Lakewood, CO 80401

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