Important considerations in creating an estate plan

On Behalf of | Jan 8, 2020 | Estate Planning

People in Colorado who do not make an estate plan can leave their loved ones in a difficult position. Family members may end up in litigation as they argue over what happens to assets, or the state could distribute them in a way that a person would be unhappy with.

There are two particularly important principles people creating an estate plan should keep in mind. First, the estate plan is not something that can be created and forgotten about. Estate plans need to be reviewed regularly and possibly updated as assets, tax laws and family situations may make changes necessary. The other is that it is best to keep family members informed about what is in the estate plan. While this does not have to be extremely detailed, letting loved ones know the general plan as well as who will fulfill various roles, such as executor and trustee, can reduce the likelihood of surprise and anger that could lead to challenges.

Some people may want to talk to an attorney about lifetime gifting as well as a trust. The trust could be revocable or irrevocable depending on the person’s needs. The job of a trustee can be complex and time-consuming. This means that instead of appointing a friend or family member as trustee, it might be better to choose a professional.

Trusts have a number of different uses and are not just for the wealthiest families. For example, a trust can protect assets if one beneficiary is likely to spend irresponsibly. The person might only receive distributions at certain intervals, or a trustee could have the power to decide when distributions are made.