Wills

Understanding Wills And Trusts In Your Colorado Estate Plan

If you know anything about estate planning, it’s that you need a will. Right? Or do you need a trust? Or both, perhaps? Understanding the different estate planning documents and whether you need them can seem complicated, and it’s common to have questions about the estate planning process.

If you are wondering about the role of a will or a trust in your estate plan, you have come to the right place. In this article, you can discover:

• What exactly you can or should address in your will, and whether you need a trust in addition to your will.
• Who you should name as your personal representative when writing your will, and why this is so essential.
• What you should do if you need to make changes to your estate planning documents.

Do I Need Both A Will And A Trust?

Yes, for proper estate planning, you need both a will and a trust. Typically, if you have a trust, you will also have a pour over will, which leaves everything to the trust.

Assets are transferred to the trust, but if you forget an asset or do not have it titled in the name of the trust, then the pour over will would transfer or leave the asset to the trust. The trustee would then receive the asset and distribute it according to what you have instructed through your trust.

What Can I Or Should I Address In My Will?

The purpose of a will is to distribute any assets owned by the decedent, or the person who has died. Your will should address which of your beneficiaries should receive which of your assets.

Your will can also include last instructions, such as funeral or burial instructions. However, it is also a good idea to write a memorandum, or another document addressing the final instructions. This could include whether you want to be buried or cremated, whether or not you want a service, or what you want at your memorial service.

This is extremely important if you want your last wishes followed. For example, I had an aunt who died and she wanted to be cremated. My uncle was unaware of this because her will was not reviewed until after the funeral, and she was already buried. This is one reason you should have an additional document to make your wishes known.

As far as allocating your assets, you could write almost anything you want in your will. If a relative borrowed money from you in the past, you could indicate that their inheritance will be reduced by the amount they borrowed. You could indicate that you are not leaving anything to a specific person, such as an ex-spouse. Your will is your chance to indicate your last wishes, and you can use it to communicate what you want.

What Are The Responsibilities Of An Executor, And Why Is It Important To Name An Executor In My Will?

An executor collects your assets and distributes them as directed by your will. Your personal representative is in charge of contacting your beneficiaries and your creditors, and managing your estate after you have passed away.

Your executor should be someone that you trust to administer your estate, and to collect and distribute your assets in accordance with your will. This should be someone who is honest and reliable. You should not have any concerns about their integrity or their willingness and ability to follow the instructions set out in your will.

The reason it is important to name an executor in your will is because, if you don’t, the court will appoint an administrator. This could end up being someone that you would not have trusted to manage your estate.

How Does A Will Compare To Other Estate Planning Tools, Such As Trusts?

With a will, you can leave relatively small assets to individual people, sometimes without having to go through probate. However, this is for small estates, which are defined as estates under $82,000 in the state of Colorado. Most estates must go through the probate process to validate the will.

The advantage of a trust is that it avoids having to go through the probate process. Typically, the probate process takes between six months and one year, and could be even longer depending on the complexity of the estate. With a revocable trust or living trust, assets can be transferred as soon as 10 days after the person passes away, which significantly shortens the process.

What Steps Should I Take To Ensure That My Will Is Accessible To My Loved Ones And Executor?

To ensure your will is accessible to those who will need it, you can give copies to your loved ones and to your personal representative. You can also inform your loved ones of where to find the original copy of your will. For example, you could keep it in a file cabinet or a safe deposit box and make sure your loved ones know where it is located.

Is It Better To Make Changes To An Existing Will Or Create A New Will?

Whether you should edit your existing will or trust or just start a new one depends on how substantial the changes are. If you need to make a minor change, such as updating your location to a new city, you can do this without having to revoke or republish the trust or will.

In the case of more significant changes, you would need to go back and read each of the documents associated with your will or trust, the original paperwork, and ensure that everything is updated and aligned. Sometimes, it is easier to revoke and republish the trust or will.

For example, my mother-in-law made eight different restatements of her living trust over the years. In general, it is easier to republish and restate your original document than to retitle everything each time you make a new trust or a new will.

If you still have questions about changes you want to make in your trust or will, contact your estate planning attorney. They can help you understand whether editing your existing document or creating a new one will be easier for you. For more information on the Role Of A Will In A Colorado Estate Plan, an initial consultation is your next best step.