Wills & Trusts
Do you have a will in place?
Do you want to ensure your wishes are followed?
Do you need to set up a Living Trust, Powers of Attorney, and/or a Health Care Directive?
A Will is a legal document that sets forth what happens with your estate after you die in accordance with your wishes. Why is that important? Well, you worked hard for what you have. Don't you think it's fair that you decide who gets what after you are gone? Also, a will can save time, money, and stress for your surviving loved ones.
Who will manage your estate? Who will care for your minor children if you have any?
What about setting up a trust? Is that a good option for you? Can that help avoid probate after you die?
Powers of Attorney, Health Care Directives, and other estate planning . . .
Will vs. Trust
What is the difference between a will and a revocable living trust and a will? And should you have one, the other or both?
What is a Will?
A will is a legal document in which you declare what should happen to your property after you pass away. You can also use your will to name legal guardians for your minor children, name a personal representative or your estate, forgive debts, pay taxes, etc.. After your death, your personal representative (commonly known as an executor) pays any debts or taxes and facilitates who gets what of your assets based on the terms of your will. If your estate meets certain criteria in Colorado, this process may involve a court procedure called "probate" and can be time-consuming and potentially expensive.
What is a Living Trust?
A living trust is a legal document you can use to name beneficiaries for your property. However, it is different from a will. The key point of a living trust is that it appoints a trustee to manage and distribute your trust property after your death, and this takes the place of the personal representative and/or probate court distributing your property. Often times, proper use of a living trust can be instrumental in your estate avoiding probate after you die.
What do I need?
Most people need a will. And depending on your wealth, marital status, assets and estate planning goals, many people can benefit by having a living trust in place as well.
Typically, if you pass away without a will, trust, or other avenues for the distribution of your assets, that money and property will be distributed according to Colorado law. This is a legal process in which the state will determine who gets the property based on their relationship to you, and not necessarily according to your wishes.
However, some property, such as joint bank accounts, insurance proceeds, retirement accounts, and other financial investments, can be given to the person you choose if you designate them as a beneficiary. Usually, the account provider allows you to select the beneficiary of your account and will allow you to change it at any time. And if your account is a joint account, i.e. you and someone else own it together, the other account holder usually gets the balance when you die. Also in Colorado, some things you own, such as real property (i.e. house, real estate) may be owned as joint tenants, wherein the property automatically passes to the surviving owner at the time of your death.
To protect your wishes, you can control the distribution of your property after death by having a will and/or living trust. But even with a will, your beneficiaries or a named personal representative may still need to go through a court process called probate to distribute your property. However, with the preparation of a living trust, you can provide for the distribution of your property while still avoiding probate.
Having a will and/or living trust in place is an important decision that is best prepared by an experienced attorney. If you reside in Colorado, Ferraro Law Firm is here to serve you.
