Estate planning in Colorado is more than simply ensuring that assets will pass to the proper heirs. Anyone who has assets that they intend to leave to a loved one needs to have an estate plan in place. It can be helpful to think of the estate planning process as involving a checklist of items that should be addressed. Creating durable powers of attorney, ensuring beneficiaries are properly designated and establishing living trusts are all items that go on the checklist.
A durable power of attorney gives someone else, called the attorney-in-fact, the right to make decisions on the behalf of the principal. They can be designed to address issues with finances, property or health care. A durable power of attorney can help in a situation where, for example, a person owns valuable assets like stocks but he or she is incapacitated and has medical bills to pay. The attorney-in-fact may be able to sell the stocks on the person’s behalf to cover the costs of medical care.
Beneficiary designations are important for things like individual retirement accounts, life insurance policies and 401(k)s. Beneficiaries are generally named for these assets at the time they are established, but many people fail to revisit them when circumstances change.
Living trusts work well in many cases to effect the transfer of assets that do not have beneficiary designations. Trusts are not subject to probate, so holding assets in a trust can help heirs avoid probate costs and potential complications.
In a case where a Colorado resident does not have an estate plan in place, or has a plan that has not been recently updated, a lawyer might be able to help. A lawyer with experience in estate planning law might look at the client’s situation and suggest creating trusts or other estate planning instruments to ensure the proper transfer of assets on death.