Everyone needs an estate plan, but many Colorado residents probably don't have one. Statistics indicate that more than half of all Americans don't have wills, which are the most basic of estate planning documents.
Many people in Colorado may lack important estate planning documents. One survey has found that about half of all Americans do not have a basic estate plan. One reason for this may be that some people believe estate planning is only necessary for the wealthy. For Millennials in particular, making an estate plan might seem low on the priority list. However, estate planning is important for people of all ages and income levels.
Bitcoins are assets that may be passed to another person when the original Colorado owner passes away. However, this assumes that the original owner left instructions as to how the bitcoins could be accessed. In most cases, an individual uses a private key to access an account or make a transaction. Without the key, the coins could be lost forever.
Making an estate plan is the type of activity that some people in Colorado might prefer to put off. However, the problem with this is that it can be put off until it is too late. While many people may think of an estate plan as deciding who will get a person's assets, it is also important to plan in case a person becomes incapacitated.
In December 2017, Congress passed a new tax bill that may affect estate planning for some people in Colorado. Even those whose estates are unaffected by the tax bill may want to review their estate plan to make sure it is still effective based on current tax law and any other changes. This could include not just changes in a person's life or assets but changes in relationships with beneficiaries or in the lives of beneficiaries.
In 2018, the federal estate tax exemption will be $5.6 million for an individual. An estate worth more than that will need to file a return with the IRS. Therefore, that number may be the baseline when it comes to estate tax planning. However, those who are under that threshold may still benefit from having an estate plan. Without one, an individual may have less control over where his or her assets go after death.
People in Colorado who are creating an estate plan must also pay attention to beneficiary designations. It can be easy to forget about these. One woman, who is a financial professional, did not realize until she transferred an IRA to another investment company that she had neglected to change the beneficiary on the account when it would have been prudent to do so.
If you have a loved one to take care of, either a special needs child or a senior, you know how demanding it can be. In the daily routine it's common for people just like you to neglect the long-term planning that is essential to being sure their needs are met in all potential circumstances.
For couples in Colorado who own their own homes, that asset can often be the single largest shared asset in a couple's life. Many couples own their home with joint tenancy with a right of survivorship, which means that either person will become the sole owner of the home in the case that the other party dies. This form of property ownership allows this significant asset to transfer without probate or including the home in the estate, protecting both parties into the future.
Colorado residents who are creating an estate plan should also make sure they review the documents regularly and update them if necessary. Failing to do this can lead to other problems. For example, a North Dakota congresswoman has talked a great deal about how the federal estate tax hurt her family when her father was killed in a farming accident. However, a closer look at the documents shows that the issue was more one of not updating his will. Furthermore, his family did not take advantage of several opportunities that could have made the tax they had to pay less onerous.