If you are like many Colorado residents, you may not have an estate plan in place. The good news is that it is never too late (or too early!) to put a plan in place to protect your family and assets. But diving headfirst into the planning process without considering your family and assets can cause you to overlook some critical points. Below are eight critical questions people should ask yourself when creating an estate plan.
1) “Who will care for my children and pets?”
If you are a parent or pet owner, you want to make sure that they are well cared for if something happens to you. Depending on your wishes, you may wish to designate a single Guardian or a joint Guardian to care for your loved ones. If you fail to outline your wishes in an estate plan, the court will determine who will take care of your loved ones.
2) “Who will handle my finances if I suffer a critical injury or illness?”
If you suffer a severe injury, you may not be able to make sound financial decisions. To help ensure that your finances are handled in a way that you would approve, you need to make sure that your estate plan identifies a trusted person who shares your financial values to handle your finances. Otherwise, your money could be spent in a way that you would not have authorized.
3) “Who will be the executor of my estate?”
Known in Colorado as a “personal representative,” an executor is a person who will oversee your estate. Key duties include ensuring that taxes and debts are paid, and then ensuring that your beneficiaries receive the assets you left to them. An executor must be at least 21 years of age and of sound mental status.
4) “Do I want to give any money to charity when I die?”
If you are among the 67% of people in Colorado who donate to charity, you may want to leave money to your favorite charity when you pass away. But unless you formalize your wishes in an estate plan, it is highly unlikely for your charity to receive any of your assets. Make sure you clearly identify any charities to whom you would like to give money or property.
5) “Who will be my beneficiaries?”
Deciding who will receive your money, property, and personal possessions is one of the most important decisions to outline in an estate plan. People who don’t specify beneficiaries in an estate plan run the risk of their money and other assets ending up being distributed by the State of Colorado.
6) “Do I have a plan if a common disaster strikes my spouse and me simultaneously?”
While the likelihood of you and your spouse perishing simultaneously is extremely rare, you need to have a plan in place that appoints an alternate guardian for your children until they become adults. If you fail to outline your wishes, the court will select a Guardian to take care of your children and oversee their inheritance. Even worse, your child could become a ward of the state.
7) “Who will manage my business if I am unable to do so?”
Only 58% of family businesses in Colorado have a succession plan, and most plans that do exist are informal at best. If you do not formally outline your wishes in a plan, then state law will often dictate what happens to your business based upon how your business is structured.
8) “Who would I trust as my backups if my designated choices are unavailable?”
“Unexpected things happen in life. It may be difficult to think about, but you should ask yourself, what do I want to happen to my things if my spouse and I die at the same time, for instance. It is always a good idea to have contingencies, backup plans, if you possibly can.” – Habitat for Humanity of Metro Denver
The odds of two tragedies striking simultaneously or back to back are unlikely. But there is still a very slim chance that your primary beneficiary or designated guardian dies at the same time you do or shortly thereafter. It is, therefore, a good idea to name an alternate guardian for children and pets, as well as an alternate person to make decisions on your behalf.
What is the single best way to develop a comprehensive estate plan in Colorado?
The path to a thorough estate plan involves asking yourself some difficult questions. The single best way to ensure that you protect your loved ones and your assets is to seek the services of a trusted estate planning lawyer. With an experienced estate law expert in your corner, you can rest assured that you have covered all of the key points with your estate plan. To begin planning your estate, contact us today. We look forward to helping you prepare for your future.