Many people believe that they have to be multimillionaires in order to have an “estate” and establish an “estate plan.” Nothing is further than the truth. Do you own your home? Cars? Have a savings account? 401K retirement account or investment accounts? No matter the size of your estate, it is important to create a plan for what happens if you become incapacitated or die. Your home, your cars and your investment accounts will be allocated to your family by the government. If you have not designated who inherits your assets, provides for your minor children, and specify your wishes about medical treatment, the government will do it for you. Estate planning can be simple or complex, but it is important in case you become incapacitated or an accident ends your life.
A will is the most basic form of estate planning and can go far to ensure that assets go to the people or organizations you choose. It can be as simple as a note drafted in MS Word, or a complicated, multi page document drafted by your lawyer. The important this is to have one. It is also a good idea to name an executor in your will, too. Without a will, the state of Colorado will decide who inherits your estate. For example, if you are married with children, your spouse will get half of your estate and your children will divide the remainder equally. If you have no living heirs, the state takes it all. Yes, the without a will and without living heirs, the state will take your entire estate.
Probate is the legal process that distributes your estate according to your will or state law. When you die, your estate goes into “probate”. However, with proper planning, your heirs may be able to avoid it completely and set up your estate so that many assets will transfer automatically at your death. If your total estate value in Colorado is under $63,000, as of 2013, and does not include any real property, your heirs may be able to claim their shares with an affidavit for small estates. If it is over $63,000, a family trust or living trust can be created to help mitigate or avoid your estate going into probate.
Get Legal Advice
Both state and federal laws govern various aspects of estate law. To ensure your plan meets your needs and is legally binding, it’s a good idea to talk with a Colorado estate planning lawyer like those at D. Mathew Blackburn. We do attorney things, and one of those thing we specialize in is estate planning.