On August 9, 2016

How estate planning works

How estate planning works

Estate planning is essentially the process of detailing your future wishes for yourself, your estate and your family. By taking the time now to put an effective, valid estate plan in place, you can be assured that you and your loved ones will be financially protected regardless of what tomorrow may hold.

When it comes to estate planning, there are various options and devices that can be incorporated, based on your specific situation, your concerns and your wishes. To help you get oriented and start figuring out what may be the best options for you and your family, below, we have outlined some of the most basic features of estate plans.

Estate Planning 101: The Fundamental Components

Although estate plans can be tailored to fit your specific needs and circumstances, in general, the fundamental elements of estate plans tend to include:

  • The will – As the cornerstone of most estate plans, the will details who gets what after you pass away. The “what” here will be any property that you own solely (i.e., not jointly held property, property owned by a trust, etc.). The will can also set up trusts for certain assets, including life insurance proceeds.
    • Without a will, the assets you own solely will be subject to Colorado intestacy laws, which may not distribute the assets according to your wishes.
  • Powers of attorney – These devices allow you to appoint an agent to oversee your financial and/or medical affairs in the event you become incapacitated in the future (and, consequently, unable to make these decisions on your own).
    • Without powers of attorney, important medical and/or financial decisions for you could be made by the court and/or someone whom you would not have wanted making these decisions.
  • Trust(s)Trusts allow you to transfer certain assets to specific beneficiaries, according to certain rules (that you devise). With trusts, real estate, cash, and other assets can be distributed to heirs by a third-party (i.e., the trustee), meaning that those assets will not have to be probated.
    • Without a trust, your assets may have to pass through probate before they can be distributed to your heirs. This can create problems if heirs need immediate access to these assets. Additionally, trusts can help reduce estate tax obligations, leaving more of your estate for your loved ones (rather than for the IRS or other tax authorities).
  • Funeral and burial plans – These plans should detail your wishes for how you want to be laid to rest.
    • Without these plans, your loved ones can experience extra stress and grief after your passing, as they may be left scrambling to try to figure out how you would have wanted to be laid to rest (in addition to dealing with your estate and possibly probate).

Contact a Denver Estate Planning Attorney at JR Phillips & Associates, PC

When you are ready to develop, revise or administer an estate plan, you can turn to an experienced estate planning attorney at JR Phillips & Associates, PC. We provide a thoughtful, comprehensive approach to our clients’ estate planning, elder law and other legal needs, and we take pride in helping each of our clients and their families find the best solutions for them.

To discuss your options during an initial consultation, call us at (303) 741-2400 or email us using the contact form at the top of this page.

Categories: Drafting Wills, Estate Planning, Medical Directives, Powers of Attorney, Trusts