Wills are generally used to make direct, immediate gifts. For example: “I give $5,000 to the Riverdale Animal Shelter upon my passing.”
Trusts are generally used to hold onto property over time. A trust might work like this: “My trust will hold my son’s share of my estate and distribute to him: 1/3 on his 25th birthday, 1/3 on his 30th birthday, and the remainder on his 35th birthday.”
Many factors go into choosing between a will and a trust, and you can learn more about how well these tools fit your life in a 1-1 consultation with an experienced Colorado Estate Planning attorney.
Yes, your Estate Planning documents definitely need to be witnessed and notarized. You’ll find and meet with a notary in your neighborhood and bring two adult witnesses to ensure that your documents are legally enforceable.
A living will is not the same as a will, but both documents are important because they allow you to specify who should have access to your medical records and financial assets if you become incapacitated.
A living will is a legal document that allows you to make decisions in advance about the care you receive at the end of your life if you become unable to do so. A will, on the other hand, is a legal document that designates what happens to your assets and property after you die.
In your will, you’ll designate a person who carries out your wishes. For wills in Colorado, we call this person the Personal Representative. But in other states, the term Executor is more common. The person you’ve nominated will file your will with the court and submit an application to be formally appointed as the Personal Representative (“PR”) of your estate. When the court approves the application, it will issue a special notice called Letters Testamentary which proves that the PR has legal authority to act on behalf of your estate.
After the PR has been appointed, this person has three major tasks:
– Gather your assets,
– Pay your debts, and
– Distribute money or property to the people you’ve named in the will (“Beneficiaries”).
In some states, probate can be an expensive and time-consuming process. However, probate in Colorado is significantly more efficient than in other states and isn’t something to be feared or actively avoided in most cases. The Colorado Estate Planning Handbook, a resource used extensively by estate planning attorneys in Colorado states:
“Because Colorado has adopted a version of the Uniform Probate Code, “probate” is a simple and inexpensive procedure in this state and using . . . trusts solely to avoid Colorado probate may not be warranted.”
Some attorneys and financial advisers will push trust-based planning out of ignorance or a desire to sell you a more complex and expensive legal product, but you should confirm that probate avoidance is worth the time and effort that goes into it.
Additionally, probate has some benefits.
That said, there may be good reasons to avoid probate such privacy concerns and relative ease of administration. If you have what is considered a “small estate” (no real estate and total assets valued at less than $70,000 in 2021), probate isn’t required and assets can be collected using an affidavit.
