The important benefits of estate planning

On Behalf of | Apr 22, 2020 | Estate Planning, Probate

After years of hard work, Colorado residents who have built up their wealth are probably looking forward to enjoying the fruit of their labors when they retire. Traveling, spending time with family and friends, or enjoying life at home may be some of the things they hope to do. In any case, a well-built estate plan not only protects a person’s assets, but it carries other benefits as well.

Some benefits of estate planning

One of those benefits of estate planning is that it ensures heirs receive their inheritance as outlined in the will of the deceased, as opposed to the state deciding how the assets will be distributed. Without proper planning, a decedent’s estate could be tied up in probate, a legal procedure where an executor is assigned to manage the estate. This process often goes on for weeks, months or years in court, delaying the distribution of assets to the rightful heirs. In addition, beneficiaries will be responsible for paying costs and fees, and the process is public record.

How trusts work

However, an irrevocable trust can ease taxes that beneficiaries might have to pay. In this type of trust, the person who sets up the trust, called a grantor, gifts the trust’s assets, which are then taxed at a different tax rate. In a revocable living trust there are no tax benefits, but this tool protects the trust’s assets from going to probate. Furthermore, these tools can help to maintain and manage peoples’ assets in the event they are unable to do so themselves because of illness or death.

Estate planning is for everyone

While some people may be seeking guidance involving their complex business assets, others might want legal help creating a simple will, a living trust or a power of attorney. An attorney could help navigate a person through these details and simplify the process in order to form an estate plan that is customized to fit his or her individual circumstances.