A trust is a document that attorneys and people can use to manage their assets, ultimately dictating how they pass after death. A trust can be used to avoid probate or to plan for taxes. In Colorado, we are fortunate because we have a probate friendly system and probate is not necessarily something to be feared. Additionally, a trust may be set up through a will, such as a contingent trust for minors. This trust can be created in a basic will plan and creates a trust for children if they are below an age determined by the will. This type of planning allows parents to protect children with a potential trust if they die prior to their children reaching a selected age of adulthood to inherit.
Trusts can be very useful tools in specific circumstances to achieve specific planning goals. However, probate avoidance may not be in the best interest of your estate. The probate process is different in each state, some more complicated than others. It is essential that you consult with an estate planning attorney in the state you live to properly evaluate your estate planning goals. This would ensure your estate planning documents are accurate to your state’s laws and accomplish your specific goals. This is important because trust planning and will planning can be very different from state to state.
What Is An Advanced Care Directive?
In Colorado, an Advance Care Directive is often referred to as An Advanced Directive for Medical Or Surgical Treatment or Living Will. This document only comes into play under very particular circumstances as defined under Colorado Law. The document is used to make your wishes known about what medical treatment or other care you would or would not want if you are unable to express those wishes. This document become relevant if you are in a terminal condition, need life-sustaining procedures, or are in a persistent vegetative state.
What Exactly Is A Power Of Attorney?
There are two types of power of attorney documents that we generally use in estate planning in Colorado: a financial power of attorney document and medical power of attorney document. A financial power of attorney is a document that appoints an agent to act on your behalf financially. That agent would step into your shoes to, for example, pay your bills, pay your mortgage, and manage your bank accounts if you are unable. Generally, these are durable so they are effective upon signing and remains valid upon incapacity so that your agent can act on your behalf when needed.
For the medical power of attorney document, you appoint an agent to make medical and surgical decisions on your behalf if you are unable. Those are usually durable as well so they are valid when you are incapacitated.
What Other Documents Are Important To Incorporate In My Estate Planning?
Other necessary estate planning items that are important to consider would be ancillary documents such as your disposition of last remains. That document states how you wish to have your body treated upon your death and answers questions like: Would you like to be cremated? Would you like to be buried? Do you have other specific wishes? Do you want to have memorial or funeral service? How would you like to have that held? Do you already have a burial plot bought and paid for? That would be the place where you give direction to loved ones on how to treat your body and services upon your death. They are only as enforceable as they are reasonable, but it allows your family to know and follow your wishes.
Other items that can be incorporated are a temporary delegation of parental authority that we have in Colorado. It can be used by parents who have minors to allow them to give temporary authority to individuals to make decisions for their children if they are not around. For example, if your child goes on a vacation with another family or if you go out of the country and they are being cared for by family members. This can be effective for a few days or a few weeks, but it’s only good for up to 6 months.
What Is Probate? When Does Probate Typically Occur In Colorado?
Probate is a mechanism for assets to pass at death if they do not pass according to a separate mechanism such as title, beneficiary designation, or trust. It is important to understand how assets pass upon death to understand how probate works. Probate occurs after someone dies and assets need to pass to other individuals. The size or the estate and whether the decedent owned real property are important factors to whether probate will need to be opened after death.
In Colorado, you can open probate formally or informally and close probate formally or informally. If a person dies with a will, they are considered to die testate, but if they die without a will, they will be considered to have died intestate. The Colorado State Website has helpful guides, instructions, and forms to help people navigating the process.
For more information on Trust Planning In The State Of Colorado, a free 30 minute consultation is your next best step. Get the information and legal answers you are seeking by calling (720) 943-6606 today.
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