On June 27, 2012

Many Coloradans assume that if they haven’t acquired massive amounts of wealth, they have little need for an estate plan. But you don’t need to own a mansion, have a collection of vintage cars or even be considered wealthy to consider estate planning.

Simply put, your estate is comprised of everything you own when you die. That includes your home and all of your personal property, plus the money in your bank accounts, your investments, retirement plan and any interests you have in a family business. When you signed up for life and health insurance benefits, you were required to designate a beneficiary, who will receive those benefits in the event that you die. But who gets everything else must be spelled out in a will or living trust.

If you die without designating beneficiaries for these items, Colorado law will dictate how these assets and property are distributed. Some newer laws rank inheritors, giving all your belongings to your spouse first, followed by children, then your parents and siblings.

But do you really want the state to decide who gets your most beloved possessions? If not, there’s no time like the present to choose for yourself who gets them. In fact, some financial and estate planning experts say going through the estate planning process is a fitting rite of passage for someone celebrating his or her 18th birthday. Even if they have very few assets, young adults can benefit by getting into the habit of thinking about their estate plan, which they can change as they acquire more assets and property.

Your closest relationships may not match the state’s assumptions. You may not be married, but are in a partnership that doesn’t necessitate or allow you to be married. Perhaps you have no children, but want to leave belongings to a niece or the child of a close friend. All of these preferences must be spelled out, which is easy to do at a reasonable cost with the help of an attorney who focuses on estate planning.

Source: Forbes, “‘I Don’t Have An Estate. Why Do I Need An Estate Plan?’” Deborah L. Jacobs, June 26, 2012

Categories: Estate Planning

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