Estate planning is something that should be implemented by everyone, regardless of their age or financial situation. With some simple planning, you can ensure that:
The more prepared you are, the easier it will be for everyone involved in the process.
Without proper estate planning, your estate may be distributed in a manner with which you don't agree, potentially creating disputes over assets and creating rifts between family members.
Your goal should be to design a plan that:
What follows is a brief overview of the most important estate planning documents everyone should have:
This document does three big things. First, it allows you to choose a health care agent to make medical decisions for you when you cannot. Secondly, it states your preferences for end-of-life care, i.e. intubation, CPR, etc. Finally, this document allows you to appoint a guardian. Your guardian can be the same person as your health care agent or someone else. But, by nominating a guardian in advance, you save your loved ones the time and expense of having to go to probate court to ask a judge to appoint a guardian to handle your affairs.
HIPAA (The Health Insurance Portability and Accountability Act) is a federal law that protects your healthcare information. A HIPAA release lets you designate trusted people to access your HIPAA protected health care information, but does not reveal your private end-of-life treatment preferences.
If you are incapacitated, the health care agent you designate in your advance directive is responsible for making your end-of-life treatment decisions and is guided by your stated preferences. However, if you absolutely do not want to receive CPR or other forms of life-prolonging treatment, a DNR, signed by a physician, is essential.
This document allows you to name one or more persons to help you handle your financial affairs if you become incapacitated. You can give this person or persons complete or limited power to act on your behalf when it comes to your financial matters.
In your last will & testament, you can nominate an executor for your estate and designate how your real and personal property (land, houses, money, personal items, etc.) will be distributed after you pass away. It also lets you nominate a guardian for your minor children and can be a way for you to create a trust that springs into existence at your death.
Your will does not have any effect until after your death and must be probated before any distribution from your estate can be made. The probate process can be time-consuming and expensive and, as a matter of public record, lacks privacy. However, for most families, a will-based estate plan is perfectly sufficient.
For a larger or more complex estate, or when maintaining your privacy is a concern, a revocable living trust is a better choice as a foundational estate planning tool. A revocable living trust will allow you to plan for two important periods when good estate planning is essential:
Putting all of these documents in place is just the beginning of a lifetime of estate planning, not just a one time event.
Your estate plan should be reviewed at least every three years to ensure that it keeps up with any changes in the law, your personal relationships, and your financial situation.
Furthermore, your estate plan needs to be updated whenever you acquire major assets, in order to ensure that it remains properly funded.
Working with a qualified and experienced estate planning attorney can help you get all of the essential estate planning documents in place and ensure that your estate plan will work when you need it to work. To discuss creating an estate plan, contact our qualified and experienced Colorado estate planning attorneys through the contact link on our website.