An estate plan can you manage your assets both today and after you pass. It can also make it possible to appoint someone in Colorado or elsewhere to manage your finances if you are unable to do so on your own. There are many different types of documents that you can include in such a plan such as a will, trust and financial power of attorney.
What a will can help you accomplish
A will is one of the most common estate planning tools used, and it allows you to appoint an estate representative, appoint guardians for your children and determine who receives property held in your estate. If you die without a will, assets may be transferred to your parents, siblings or spouse in accordance with state law.
What to know about a trust
You don’t actually own assets that are held in a trust. Instead, they are controlled by a trustee who manages them in accordance with the terms of the trust. In some cases, it may be possible to name yourself as the trustee. One of the key benefits of establishing a trust is that anything titled in its name won’t typically be subject to probate.
Another potential benefit is that you can put restrictions on how beneficiaries can use their inheritance. For instance, it may be possible to prevent a beneficiary from using money for anything other than paying college tuition or making a down payment on a home.
Make sure that information is easy to find
It can be a good idea to include a letter to a family member or other trusted party that discloses the location of important documents. These documents may include bank statements, passwords to digital files or the contact information of an executor or trustee.
If you need help navigating the estate planning process, it may be a good idea to hire an attorney. He or she may be able to help review existing plan documents or suggest steps that you might be able to take to make your plan stronger.