When many people start to consider estate planning, they might assume their situation is very simple. This assumption can lead to a “do it yourself” approach. A quick internet search on estate planning in Colorado may lead to incomplete answers, and this results in an estate plan with significant gaps and issues. Rather than risking an estate plan based on misconceptions, it is vital to discuss your estate plan with a knowledgeable Colorado attorney.
Misconception: “I don’t need an attorney to draft my estate plan. I can just put someone in charge of my assets, and they’ll do exactly what I want when I pass away.”
This misconception takes on many forms. In some instances, a person may just tell a close friend or family member who should receive certain assets, but nothing is formalized in writing. Others might just put one person as beneficiary on everything, and then assume that person will distribute the assets to the correct individuals. Additionally, families with special needs children may not want to deal with complexities associated with a disabled person’s inheritance, so they simply give everything to another child and assume that child will take care of their disabled child.
Unfortunately, all of these decisions would lead to significant repercussions. Initially, in Colorado, a probate will be required for an estate that owns real property or exceeds a total combined asset threshold amount, adjusted yearly. If someone’s estate must go through probate, and they have no written estate plan, the probate court will operate under Colorado’s intestacy statute. This means assets will go to a family member as decided by law, rather than what the individual may have wanted.
Likewise, if someone is put as beneficiary on all accounts, ownership of those assets will transfer immediately upon death. While the beneficiary may be a trusted friend or family member, they will have no legal obligation to distribute those assets according to the decedent’s wishes. It may seem impossible that a close friend or family member would go against your wishes, but death and money cause changes in family dynamics. Without an effective estate plan, your entire estate may end up in the wrong hands.
Finally, if a family has a child with special needs, it is vital that appropriate legal steps are taken to ensure that child’s inheritance does not end up in the government’s hands. This can be accomplished through different methods, such as a special needs trust, but it is one area where shortcuts will almost certainly cause issues.
At Axis Law Group, our experienced Colorado estate planning attorneys know how to spot potential problems and solve them. Rather than taking risks with your assets, contact us today to schedule a free initial consultation for your estate planning matters.