Estate planning is crucial to protecting your family, your future and your finances. With proper estate planning, you can be assured that your wishes will be met if you become unable to make decisions regarding your health and finances and that your assets are distributed according to your wishes after you die. A strong estate plan protects you and your loved ones, and provides peace of mind. It involves creating legal documents and making strategic decisions to safeguard your estate.
Essential Estate Planning Documents You Need
To begin, it’s crucial to have the right documents in place. These typically include:
- Will: Specifies how your assets will be distributed after you die.
- Trust: Helps manage your assets and can offer tax benefits.
- Financial Power of Attorney: Appoints someone to make financial decisions on your behalf if you become incapacitated.
- Advance Directives: Include your living will, which spells out your preferences for medical treatment, end-of-life care, organ donation and more, and your medical power of attorney, which names a person to make medical decisions on your behalf if you become unable to.
Common Estate Planning Mistakes to Avoid
Many people make critical errors in their estate planning that can have devastating impacts on loved ones and how assets are distributed. Common pitfalls to avoid include the following:
- Failing to Update Your Plan: Life changes such as marriage, divorce or the birth of a child should prompt updates to your estate plan to ensure your wishes are kept up to date. Aside from major life changes, it’s a good idea to review your plan every few years.
- Not Naming a Guardian for Minor Children: This can lead to court battles and uncertainty about who will care for your children.
- Overlooking Digital Assets: Ensure control of your online accounts and digital properties are included in your estate plan.
Choosing the Right Executor for Your Estate
Selecting an executor of your estate — known in Colorado as a personal representative — is one of the most important decisions you’ll make. Your personal representative will manage your estate, ensuring your wishes are followed. They’ll distribute assets and pay taxes and debts. Consider someone who is trustworthy, organized and willing to take on this responsibility. They will be legally and ethically bound to act in good faith, doing what is best for the estate and beneficiaries. If you do not name a personal representative, there are steps Colorado state law requires to be followed to name someone to the role. Typically, this will be a beneficiary.
Legal Requirements for a Valid Will
Each state has specific requirements for a will to be valid. In Colorado, a will must be in writing and signed by the testator — the person whose will it is. If you’re unable to sign your own will, another person can sign on your behalf if you give them permission and are present and conscious during the signing. We strongly recommend working with an attorney to prepare your estate plan to ensure the documents say what you intend for them to say. Wills prepared with online platforms or without an attorney’s review are often confusing and miss key elements and information that will be important for probate going smoothly.
Estate planning is not a one-time task but an ongoing process that requires careful consideration and regular updates. By understanding the essential documents, avoiding common mistakes, choosing the right executor, and complying with legal requirements, you can create a robust estate plan that secures your legacy and provides peace of mind for you and your loved ones.
At Andersen Law PC, we are experts in the nuances of estate planning in Colorado and are here to guide you through every step. Contact us today at 720-922-3880 for a free consultation to answer your specific questions and tailored advice for your situation. We are here to protect your family, your finances and your future.
