In our fourth blog post in our ongoing series on essential estate planning ideas, we are going to look at an all too common scenario. Namely, we are going to look at what happens if you choose not to create an estate plan.
If you are a mentally competent adult living in the state of Colorado, you are never under any obligation to create any estate planning tools. You don’t have to create a will, power of attorney, advance directive, or anything else related to estate planning. If you want to, you can go your entire life without addressing any of the important estate planning topics we have been discussing.
But what happens when you don’t have an estate plan? What happens to the important issues and questions that estate planning addresses? Let’s take a closer look at some essential estate planning ideas.
Essential Estate Planning Idea 1: Intestate Estates
Should you die without leaving behind a last will and testament, you are said to have died intestate. With intestate estates, the property left behind must still get transferred to new owners. But who are these new owners? Will your spouse inherit? Your children? Your parents?
Depending on the circumstances of your death, and depending on the relatives who survive you, your intestate estate could be distributed to a wide range of people. Pre-existing Colorado law has already established a hierarchy of inheritors that will inherit your property regardless of what your wishes might be when you leave an intestate estate.
Essentially, your closest living relatives at the time of your death will inherit your estate regardless of what you might have otherwise wanted. Should you die without leaving behind an estate plan, and don’t have any identifiable living relatives, your estate will be inherited by the state of Colorado itself.
Essential Estate Planning Idea 2: Incapacitation
Beyond inheritance questions, estate plans also address the very important question of what you want to happen should you become incapacitated. Let’s say, for example, that after being involved in a serious car crash, you become comatose. Who will communicate with your doctors? Who will manage your investments, your property, or look after your pets?
Again, Colorado law has already established who will make these decisions on your behalf in the event you become incapacitated. The decision-making responsibility will likely pass to your spouse, parents, or other close family members after a judge determines that you are incapacitated and need someone else to make decisions on your behalf. In some situations, such as when family members have a disagreement over who should make choices for you, the judge’s decision might only come after a series of hearings and court fights.
Estate Planning Workshop
If you have more questions about how a trust can help you, be sure to attend one of our free estate planning workshops in July. Click here to register for one of those workshops today!