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Golden Estate Planning Blog

Important estate plan topics to discuss with family

Many people in Colorado shy away from talking to their family members about estate planning issues like inheritance or powers of attorney. Although all parties might find the subject uncomfortable, clear communication could lead to decisions that prevent hard feelings and reduce burdensome legal paperwork when someone dies.

People approaching their children or grandchildren might begin by bringing up some questions about everyone's financial life and attitude toward end-of-life decisions. Families might find out if they are living within their means or if someone is struggling financially. A family might determine who should make health care decisions for an elderly relative if that person becomes incapacitated. Furthermore, individuals could share their wishes about whether they should receive life-prolonging care. Desires about burial could also be communicated.

Options for naming the successor trustees of a living trust

Estate planning requires people in Colorado to consider their goals carefully. In some cases, a living trust, also known as a revocable trust, achieves the desired level of asset protection and distribution, but the document also require trustees to administer its terms. A trust for a married couple might name the spouses as the trustees, but the document must name successor trustees who take over after the original trustees have passed away or otherwise become unable to serve.

Children are a common choice in this situation. The creators of the trust can name one child or all siblings as co-trustees. Although children often assume this role, it can place excessive demands on their time. If a child lives far away or works full time, the time required to oversee a trust could be burdensome or even overwhelming while grieving for a deceased parent. Trusts holding multiple properties and complicated assets could create a full-time job for a trustee.

Using a power of attorney

In case they become unexpectedly incapacitated, Colorado residents should have certain provisions in place to ensure that their financial affairs will be properly managed. This entails having a power of attorney as part of their estate plan.

A power of attorney is a legal document that gives an individual the legal authority to act or make decisions on the behalf of someone else. As the agent or attorney-in-fact, and depending on the type of power of attorney that is completed, the individual will have the power to file tax returns or manage financial business accounts.

The importance of doing estate planning right

Using an online legal site to create a basic will may be worthwhile for Colorado residents with simple estate planning needs. However, it may not be ideal for those who have complex needs or who don't want to overlook key details. In many cases, an individual pays for an attorney because that person understands what to look for when creating an estate plan.

In many cases, an individual doesn't know what he or she hasn't put into the plan that could complicate its execution in the future. An individual may also be prone to making mistakes when crafting a will, trust or other plan document. By hiring an attorney, it may be possible to avoid a mistake that could lead to a dispute. Even if hiring an attorney doesn't prevent the dispute, legal counsel may be to articulate what a person's intent was when creating an estate plan.

Why everyone should create an estate plan

For the many Colorado residents who do not own their own home or have a large number of assets, getting an estate plan together may not be their highest priority. However, the real goal of an estate plan is not just to protect assets, but also to ensure that the kids and loved ones are protected and ensure that a person's final wishes are carried out if something should happen.

When it comes to an estate plan, there are certain components that are standard. They should, for example, contain a medical power of attorney and a living will. The power of attorney gives a specific person the authority to complete the person's wishes. The living will dictates what type of medical care the person wants if he or she is not in the position to articulate it.

Benefits of qualified personal residence trusts

Residents of Colorado may be curious about the options available that can prevent a family home from going into probate. Among the many trusts available for estate planning, one type is specifically designed to both reduce the estate's value and provide a partial shield against the gift tax. The qualified person resident trust protects against home appreciation and provides a method for the early transfer of assets to beneficiaries.

Though not as common due to exemption increases, QPRTs still offer a number of benefits. The owner of the home transfers the property into the trust after an appraisal. The value of the home at the time of transfer becomes the taxable gift. This is called the carryover basis. For comparison, a home transferred at death would be appraised at that later time, which would include any possible appreciation of the home for tax purposes.

There are many reasons to update your will

Having a will is a nice first step towards building out your entire estate plan. It is also a significant milestone because many people feel thwarted by the seemingly immense task of creating a will, which then makes them avoid the task of building out their estate plan altogether. By creating a will, it can motivate people to finish the other steps inherent to creating an estate plan.

Still, creating the will is just the first step of proper will and estate plan maintenance. Once you have the will in place, you will need to update it after certain life events.

Set your family business up for success

You love your family. You want them to be successful. You want to be successful, too. When you work with family, you have both advantages and disadvantages. You already know one another, and probably know how to communicate. On the other hand, it can be difficult to criticize family. It can also be challenging to have a leader amongst relatives. The line between professional and personal can be hard to decipher.

With that being said, it is still possible for a family to start and run a business together. You will want to clearly plan all aspects of your business. You and your family will need to work together. Start by discussing the goals of the business so that you are all on the same page. From there, you can work on balancing your relationships as business partners, as well as family members, to be successful in both aspects.

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Samuel J. Owen, P.C.
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Golden, CO 80401

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