If you have never given much thought to estate planning before, you may not know where to begin or what your plan can include. Like many Colorado residents, you may think that creating a will is the same thing as creating an entire estate plan, but that is not necessarily the case.
Certainly, a will is an important estate planning document, but your estate plan can include much more than just that one document. As you work on your plan, you can determine whether you would like to keep it simple or whether you would like to create a comprehensive plan that addresses important aspects of your life and your wishes for after your passing.
Start with a will
Because most people do understand that a will is an important part of an estate plan, you can start by learning about that document. If you have children, you will need a will to name the individual or individuals you want to act as guardian or guardians for your children in the event of your untimely demise. Of course, even after making your wishes known, the court will determine whether your choice has the ability to take on such an important role.
You can also use your will to name the person you want to handle your final affairs. The court will also have to approve your executor, and that person will then have the responsibility of closing your estate, which can include paying final taxes, gathering and protecting assets, contacting heirs and beneficiaries, handling any disputes and distributing assets.
You likely already know that you can use your will to detail your wishes for asset distribution, but did you know that you can name direct beneficiaries to certain accounts? In most cases, retirement accounts, savings accounts, life insurance policies and other payable-on-death accounts can include beneficiary designations that allow you to name a person to receive the funds after your passing. Rather than going through probate before distribution, the POD accounts pass directly to the beneficiary, as long as that designation is up to date.
Consider your health
It is not unusual for people to think of estate plans as a tool for loved ones to use after a person’s death. However, you can include information that could help while you are still alive, too. For instance, you could utilize a power of attorney document to give a trusted person the authority to act on your behalf in the event that you become incapacitated and cannot make sound decisions on your own.
The idea that your estate plan could include so much information may seem overwhelming, but you may want to think of it as having the opportunity to get every detail of your end-of-life wishes right. You may choose to work with an experienced attorney who can guide you through the uses of various planning tools and assist you in creating a plan with which you feel comfortable.