Starting Your Estate Plan In Colorado

They say the hardest part of anything is starting, and if you are beginning the estate planning process, you may feel that this statement applies. Maybe you feel overwhelmed by the idea of planning your estate, or you do not know how to begin. However, initiating your estate plan does not have to be difficult!

With the help of this article and your estate planning attorney, you can easily navigate the estate planning process. This article will answer some common questions about getting started with your estate plan, such as:

• What information you need to have on hand to start your estate plan, and whether you must have a list of your assets.
• Who should be involved in your estate planning process.
• The types of assets that you should include when creating a trust – and the ones you should avoid putting in a trust.

What Information Do I Need To Get Started With My Estate Planning?

First, you must decide what kind of disposition your assets should have. For example, should they go to your spouse initially or not? Should they go to your child or children or grandchildren? How should your assets be apportioned or divided?

Then, you should think about what kinds of assets you have that need to be divided. Consider whether there is someone in particular who you want to inherit a particular asset, or if you want them all to be sold, turned into cash, and divided in proportions that the grantor of the trust has determined.

Do I Need A List Of All My Assets To Create An Estate Plan?

To create your estate plan, you need to know what assets you have, particularly if you have any real estate. This can include real estate, bank accounts, investments, retirement accounts, life insurance policies, and valuable possessions. Sometimes, it can be difficult to remember all of your assets, so the more information you have available about each of your assets, the easier it will be to start your estate plan.

Generally, your account numbers can be included, but they are not always necessary since accounts and numbers change. If you are creating a trust, having account numbers can be useful information, but is not necessarily something that would go into the trust. Rather than account numbers, a specific dollar amount can be used when setting up your trust.

What About Life Insurance Policies And Retirement Accounts?

Typically, life insurance policies are transferred outside of the estate, so those do not have to be mentioned. These types of accounts typically allow you to designate a beneficiary directly.

However, you can reference them in other estate planning documents. For example, you could mention that you are not leaving anything to a particular child or a spouse because you have provided for that person through a life insurance policy.

Do I Need To Know Exactly Who I Want To Inherit My Assets Before I Begin Planning?

Yes, you should have an idea of who you want to inherit your assets when you begin the estate planning process. You will need to determine who your beneficiaries will be, as well as which assets you want them each to receive.

Should I Tell My Beneficiaries What Assets They Will Receive After My Death?

Whether you inform your beneficiaries of what they will receive is strictly a matter of personal choice. Some people do, some people don't. You may want to surprise your beneficiaries, or not disappoint them in case you make a change to your estate planning documents in the future.

Some people want the beneficiaries to know exactly what they are receiving. Often, the decision to share or withhold the information depends on the kind of assets. For example, if you want your house, a family heirloom, or a specific piece of art to go to someone in particular, you may decide you want to share this information with the person in advance.

Who Should Be Involved In Setting Up The Initial Estate Planning Documents?

You and your lawyer should work together to set up your initial estate planning documents. Your estate planning attorney will be able to assist you with the estate planning process and walk you through how to establish your estate plan. When setting up a trust, the grantor, or person who is creating the trust, must be present.

What Is The Role Of A Trustee In A Revocable Living Trust, And How Do I Choose One?

In a revocable living trust, the grantor, or the person who is establishing the trust, is usually the initial trustee. In some cases, the grantor is not able to continue to serve as the trustee. This could be from illness or incompetence, or simply because they no longer want to manage the assets.

The role of the trustee would then be taken on by someone else, called a successor trustee. When you are setting up your trust, you will need to name a successor trustee or trustees to manage the trust after you are unable or no longer wish to manage it yourself. You can name multiple people as successor trustees, but you should be aware of how groups of people may make decisions together.

What Types Of Assets Should I Include Or Not Include In A Revocable Trust?

There are many different types of assets you can place in a trust, such as bank accounts, investment accounts, real estate, and more. Certain accounts that allow you to directly designate a beneficiary, such as life insurance or retirement accounts, should not be placed in a trust.

In addition, you should be cautious about placing motor vehicles in the trust. This is because it can create complications if there is an automobile accident with the vehicle you placed in the trust and the other party attempts to sue the trust.

However, if your vehicle is a particularly expensive asset, then you may want to make mention of it in the trust and perhaps even assign the title to the trust. If you are considering a trust, you should speak with your estate planning lawyer about the benefits and risks of placing certain assets, such as vehicles, in your trust.

How Does A Revocable Trust Help Avoid Probate?

One of the benefits of a revocable trust is that it avoids probate entirely. Probate is the court process where your assets are distributed according to your will after you die.

If you had no will, your assets are distributed according to state law, which would typically divide assets among your spouse and children. If you had no spouse or children, they may go to your parents or siblings, or even your nephews or nieces.

With probate, if you own a house and you were to die, you would not be able to transfer the title of the house or sign the deed. The court would appoint someone as the administrator or personal representative to manage your estate and perform these tasks.

A living trust can avoid probate because the assets are titled in the name of the trust rather than in the name of a person. When the trustee is deceased and no longer able to administer the trust, the successor trustee administers the trust.

With a living trust, the court would not need to appoint anyone to help with transferring the title of your house because the property is already titled in the name of the trust. This means the trustee can transfer it without any assistance from the court. For more information on Initial Estate Planning Matters In Colorado, an initial consultation is your next best step.