Sometimes, one of the most important tasks an estate planning attorney does is to educate people about essential legal documents such as last wills and testaments. Wills are key pieces of every estate plan, regardless of the other elements you might choose to use. Whether you are wealthy, just starting out, have children, are single, married, or anything else, your will allows you to address some very important legal issues. It is also something that does not address other, equally vital, topics. To better understand wills and the issues involved, let’s take a look at some important concepts.
Wills and Individually Owned Property
If there is one thing you should understand about wills, it’s that they give you the ability to make inheritance decisions about your individually owned property. If you should die without a will, Colorado law will determine who will become your legal heirs. A will allows you to change this. Through your will you can select almost anyone you like as your legal heirs. This can be relatives, friends, associates, charities, educational institutions, or anyone else.
Wills and Non-Probate Property Transfers
It’s also important to understand that not all of the property you own will pass in accordance to the terms you state in your will. Some property, known as non-probate property, is not subject to the terms of your will. People will inherit this non-probate property automatically upon your death.
For example, let’s say that you and a sibling own a home as joint owners with a right of survivorship. Should your sibling die, you’ll automatically become the sole owner of that property. Similarly, if you have a life insurance policy, the beneficiary of your policy will receive the benefit regardless of what your will states.
Wills and Living Wills
A common misconception a lot of people have about wills is that they address your medical choices. This is absolutely not true. A will is a legal document that only takes effect after you are dead. Dead people have no medical decisions they need to make.
If you are concerned about making medical decisions in case you become incapacitated, what you need is a living will. Living wills, also known as advance medical directives, give you the ability to state your medical wishes. Should you become incapacitated, your doctors will have to follow the choices you’ve made in your living will.
A living will and a last will and testament are very different documents. You cannot create one and expect it to do the jobs the other can do. This is why it’s so essential to create all estate planning documents within the broader context of creating a comprehensive plan.
To learn more about wills and the benefits of have a trust, come to one of our free workshops in March. Register online or by calling 719-520-1474 or 303-736-6060.