An estate plan helps a person avoid the fees, taxes, and uncertainty of the probate process. It also allows a person to pass down property and assets more efficiently to their loved ones.
An experienced estate planning attorney in Centennial Colorado can help a person set up a trust, draft a will, and name beneficiaries. They can also offer guidance on funeral arrangements and other important considerations.
Wills and Trusts
A Centennial trust lawyer can help you decide which estate planning instrument is right for your circumstances. This includes drafting legal documents, setting up an inventory of your assets, and advising you on the tax implications of your plan.
A trust is a fiduciary relationship between your holdings and a party of your choice, who will manage the assets on your behalf. There are revocable and irrevocable trusts, as well as testamentary trusts, which specify how the settlor’s assets will be designated at death.
A Will identifies who gets what assets when you die, though it can be challenged by “interested parties.” Trusts allow your beneficiaries to avoid the time, cost, and complexity of a Probate proceeding. However, a Will and a trust are not mutually exclusive; you may wish to include both in your plan. A trust can also reduce the chance that your loved ones will be squabbling over your affairs after your death.
When constructing an estate plan, it’s important to consider the impact that asset liquidity will have. Liquidity describes the ability of an asset to be converted into cash quickly and easily. An estate planning attorney can help you determine how much liquidity your estate has and how to increase it.
To calculate an asset’s liquidity, you must subtract its liabilities from its total assets. This calculation is referred to as net worth and it’s a key component of an estate plan.
Generally speaking, the most liquid assets are cash and other investments that can be readily sold for cash. This includes marketable securities, short-term bonds, and accounts receivable. However, there are other types of assets that may be considered illiquid, such as real estate and rare artwork. This is because they can take much longer to sell and may be difficult to value. These assets can also be very risky if you’re not careful. Therefore, they should be kept to a minimum.
Choosing someone to care for your children in the event of your death is undoubtedly the most important aspect of your estate plan. You should include a guardianship clause in your Will to ensure that your children will be well taken care of.
A guardian is the person who will make decisions for your children and will be responsible for their custody and care. You can choose one or more guardians, and they do not have to be related to you.
It is also a good idea to name a backup guardian in case your first choice becomes unable or unwilling to take on the role. Also, you should consider naming two guardians together if you are confident that they would work well together and be able to provide a stable home for your children. Finally, you should also consider the liquidity of your assets when deciding on a guardian. This will speed up the process and prevent complications later on.
The laws that affect estate planning vary from state to state. A Denver estate planning attorney can help you understand the differences and how they affect your family’s situation. They can also provide you with guidance in choosing the best tax-planning strategies for your unique financial circumstances and goals.
They can help you minimize federal income, gift, estate and generation-skipping transfer taxes. They can also assist with family business succession issues and implement plans that utilize valuation discounts and freezes, life insurance and revocable trusts.
It is recommended that you have your estate plan reviewed every 3 to 5 years to ensure that it meets your current needs and to take into account changes in the law. A skilled estate planning attorney can help you avoid mistakes in your documents that may cause problems for your heirs. This can include improper disbursement, invalidation or even legal battles. This is especially important as assets can be subject to income taxes and other taxes that you might not know about.