Estate planning includes wills, trusts, determining powers of attorney, and living wills. You should consider creating, updating, or modifying your estate plan if you meet any of the following conditions:
- Your Current Estate Plan Is Old, Outdated, or Is from Another State
One should consider all the changes that happen in your life and in the law that have occurred during the last three to fifteen years. Your plan should be reviewed and potentially updated every couple of years. It should also be updated to reflect the laws of the state where you currently live. If you have moved from another state, there may need to be substantial changes to ensure proper estate planning.
- You Do Not Currently Have a Plan in Place
If you don't have a will or a trust, it is up to the state of Colorado to make the decision of how your property will pass for you. However, this one size-fits-all plan likely doesn't really fit you and your loved ones. This may likely cause your estate to be subject to litigation in order to pass your property to your loved ones.
- You Only Have a Simple Will Currently in Place
It is important to create an estate plan that works for your individual situation and your unique family. The one size fits all mentality is typically not appropriate for every person. Every estate plan should make sure major problems—like unnecessary estate tax and, worst of all, family discord—are eliminated.
- You Have Minor Children or Beneficiaries
Without the appointment by the court of a conservator, minors are unable to inherit money in Colorado. When the court appoints a conservator, it can significantly reduce the minor’s inheritance. Additionally, the funds that the minor will be receiving and may need to live on are likely to be tied up for a lengthy period of time. If the court appoints a conservator, it is likely that a guardian will also need to be appointed by the court for the minor. We can help with all issues related to minors during any probate proceeding.
- You Have Children from a Previous Marriage
When parents have children from a previous marriage, one parent’s children may get left out, or conflict may arise between the stepchildren, between the children, or between the parents. We can help address these important and complex situations to reduce conflict.
- Your Children Are Not Responsible, or Are Married to Someone Who May Not Be Responsible
Do you have inheritance protection for a beneficiary or child who may be subjected to a spendthrift spouse, divorce, lawsuits, creditors, or bankruptcy? Do you have a beneficiary or child who has a problem with impulse control? If so, we can help you control and minimize this risk through proper planning. The average inheritance is spent within 17 months of receipt. According to the Wall Street Journal, "research shows that family money rarely survives the transfer for long, with 70 percent evaporated by the end of the second generation. By the end of the third? Ninety percent."
- You Own Rental Property or Are Self-Employed
If you are self-employed or have rental property, it is important that you understand that there can be a significant time delay before the court appoints a personal representative that has the authority to care for rental property or your business in your absence. Essentially, without planning there will be a period of time when your rental property and/or business has to run itself.
- You or a Loved One Are Terminally Ill or Have Declining Health
Unless you plan ahead, if you become terminally ill or incapacitated, you likely will not be able to make decisions for yourself. If you have not determined who can make decisions for you, decided what decisions they can make for you, and when they can make the decisions for you, you are again relying on the court to make those choices for you, and they may not make the kind of decisions you'd want.
- You Have Not Considered Tax Matters in Your Estate Planning
The amount you can inherit free of taxes is $5,250,000 for 2013. Estate tax rates are roughly 40%. Retirement accounts (IRAs or 401(k)s, etc.) are rarely coordinated with estate plans, which could result in significant tax problems. Therefore, it is imperative that a plan be created to ensure that tax benefits are not wasted. We can help you maximize your estate tax savings—let us guide you on the path toward preserving your family’s future.
- You Own Joint Tenancy Property
Many problems can exist with the ownership of property in joint tenancy. The property may become part of a court process if one joint owner becomes mentally disabled, and the ability to sell, transfer, or rent the property may not be possible. Huge tax liabilities can occur with any person who ends up with the property after the passing of the second to last joint owner. Joint tenancy may expose joint property to unintended creditors. Joint ownership may also cause a will to fail in its distribution.
Top Four Reasons to Create and/or Update Your Estate Plan
- To ensure that your children will be cared for by those that you deem most qualified to raise them in your absence and to make sure that your surviving spouse/partner will be provided for adequately.
- To name qualified people to make decisions for you if you become incapacitated.
- To document your wishes with regard to end of life care.
- To reduce the likelihood of family squabbles after your death.
Get a Free Initial Consultation Regarding Your Estate Plan
You can speak to the Colorado Springs estate planning lawyers at the Law Office of Greg Quimby, P.C. today, free of charge. In our initial consultation, we can help you get started protecting the financial future of your family, as well all other areas of estate planning. Contact our office today!