Have you been putting off estate planning because you aren’t sure why you need an estate plan, or what it does? Don’t worry. It isn’t just you!
The primary purpose of estate planning is to make your wishes clear. It will establish who should make decisions for you if you are sick or hurt or otherwise unable to manage your affairs on your own. It will also establish who will inherit your property when you die and who will be in charge of overseeing that process. There are default laws that fill in the gaps if you don’t have an estate plan. But, they may not be consistent with your wishes, and in some cases, your loved ones will have to endure court proceedings and delays if they are forced to resort to the default laws.
For most people, their estate plan will include a will, a medical power of attorney, and a general power of attorney. A will is a document that appoints the decedent’s “personal representative” (called an executor in other states). This is the person that handles the decedent’s estate after they die. The will also sets forth who will inherit the decedent’s property. A medical power of attorney establishes who will make medical decisions if an individual is incapacitated. Similarly, general powers of attorney appoint an “agent” to handle someone’s financial affairs if they are unable to do so.
It is important to make sure that you don’t end up with more estate plan than you need. For most people, an estate plan that includes a will, a medical power of attorney and a general power of attorney will get the job done. There is a widespread misconception that everyone should have a “trust,” but that is not necessarily the case. In some cases, an attorney may recommend that you set up a “trust.” However, if the only purpose of setting up a trust is to avoid probate, you should consider the pros and cons carefully because in many cases, a revocable living trust isn’t worth the hassle and additional expense here in Colorado. This is because Colorado has a relatively simple probate process.
Another important thing to keep in mind is that beneficiary designations and joint titles will circumvent your will. For example, if you add someone else to a bank account or the title to your home, or designate a beneficiary for your retirement account, the relevant assert will transfer to the person named regardless of what it says in your will. A good attorney will help you to make sure that all aspects of your plan (your powers of attorney, will and beneficiary designations) work in harmony to create the result you want.
Estate planning may not seem like the most exciting thing to do, but it doesn’t have to be intimidating or prohibitively expensive and having an estate plan is a great way to make things easier on your loved ones.
Keenan Copple PC provides each of its clients with highly specialized and attentive legal services relating to estate planning and oil, gas and mineral rights.
