Denver Family Estate Planning Attorney
Protecting your legacy, that final gift to those you care about most is a worthy goal – and one we share with you at our Arvada estate planning law firm of Colorado Estate Planning Law Center.
Our founding attorney Karen L. Brady has spent her 20-year professional career in loyal service to her estate planning, probate, and business succession clients. She consistently gets the kinds of results that give you trust in her abilities and builds lasting relationships with clients. We offer sound advice, honest answers to your questions, and client commitment for any legal issue related to your legacy. What portion of inheritance should go to a spouse or children? How can that inheritance be dispensed in a prudent, productive fashion?
There is no time like the present to discuss legal matters that are this important to you, and to those you care about most. For an initial consultation with one of our Denver family estate planning attorneys, call (303) 420-2863.
Protecting Your Children’s Legacy
Every family’s estate planning needs and goals are different. These differences call for documentation specifically tailored to your situation, and those who will survive you.
One method for protecting your legacy is called wealth reception planning. This strategy ensures that your children receive an inheritance, but one that isn’t thrown at them all at once. It is delivered in the most constructive way possible, emphasizing responsibility for stewardship of those funds.
It could be that an heir needs to have more maturity, education, and wisdom, to utilize an inheritance appropriately. You may want to make sure that he or she has a certain amount of training or education, or life lessons and accomplishments to their credit before they receive what you have left them.
We also recommend lifetime protective trust as a means of protecting your legacy. The recipient is the trustee of the trust, in charge of managing assets in accordance with the trust’s rules. He or she has significant control over the trust, but not so much control that estate administration benefits are lost.
Core Estate Planning Documents Every Colorado Family Needs
Protecting a child’s inheritance begins long before deciding how and when that child should receive assets. A complete estate plan also needs to address who will manage the estate, who can make decisions during incapacity, how assets will reach the intended beneficiaries, and who will care for minor children if their parents cannot.
Although every family’s plan should be tailored to its circumstances, several core documents commonly work together in a Colorado estate plan.
Revocable Living Trust
A revocable living trust is an estate planning arrangement created during your lifetime. You can generally serve as your own trustee while you are able to manage your affairs and name a successor trustee to take over if you become incapacitated or after your death.
For families, one of the greatest benefits of a living trust is the ability to control how an inheritance is received, not simply who receives it.
Instead of directing that a child receive an inheritance outright at age 18, or even at some later age you select, a trust can continue for that child’s benefit. Depending on how it is designed, the trust can provide access for education, health care, housing, starting a business, raising a family, or other needs while also providing protection from risks the child may encounter later in life.
A continuing trust can also offer protections that disappear when assets are distributed outright, potentially including protection in the event of divorce, creditor problems, lawsuits, poor financial decisions, or other circumstances.
A revocable trust can also simplify administration after death and may allow properly aligned assets to be administered without probate. That requires more than signing the trust document, however. Asset ownership and beneficiary designations need to be coordinated with the estate plan.
Last Will and Testament
Even families using a revocable living trust should generally have wills.
A will performs several important jobs. It identifies the person who should serve as the personal representative of the probate estate, directs how probate assets should pass, and can nominate guardians for minor children.
In a trust-based estate plan, a will commonly serves as a backup. Sometimes called a “pour-over will,” it can direct probate assets that were not already held in the trust into the trust after death, where they can then be administered according to the trust’s terms.
Colorado law imposes requirements for a valid will. In general, the person making the will must have the required legal capacity and intent, sign the document, and satisfy Colorado’s execution requirements. A properly prepared and executed will can also be made self-proving, which can simplify proving the will during probate.
For parents of minor children, the guardianship provisions deserve particular attention. The person selected to raise a child does not necessarily have to be the same person selected to manage the child’s inheritance. Separating those roles sometimes gives families greater flexibility and oversight.
Durable Financial Power of Attorney
A durable financial power of attorney authorizes another person — called an agent — to act for you with respect to financial and legal matters.
Under Colorado law, powers of attorney created under the current statute are generally durable unless the document provides otherwise. This means the authority can continue even if the person who created the power of attorney later becomes incapacitated.
That can be critical for a family. If a parent becomes seriously ill or injured, someone may need authority to handle banking, pay bills, deal with insurance, manage property, communicate with financial institutions, or address other legal and financial matters.
Without appropriate advance planning, family members may have to seek court authority through a conservatorship when financial decisions need to be made for someone who no longer has capacity.
A carefully drafted power of attorney should do more than simply name an agent. The authority granted to the agent should fit the family’s estate plan, including any trusts, business interests, gifting strategies, digital property, real estate, and other assets that may need attention during incapacity.
Medical Durable Power of Attorney
A medical durable power of attorney addresses a different question: Who should make health care decisions if you cannot make or communicate them yourself?
The document allows you to appoint someone you trust to act as your health care agent.
For parents, spouses, and other family members, having that designation in place can reduce uncertainty at an already difficult time. Rather than leaving family members to determine who has authority or trying to reach agreement during a medical crisis, you have selected the person you want involved in your care.
The medical power of attorney can work together with other advance medical directives to communicate your wishes and give the appropriate person authority to advocate for them. Colorado recognizes medical durable powers of attorney as a form of advance health care directive.
Living Will
A Colorado living will, formally known as a declaration as to medical treatment, is different from a medical power of attorney.
A medical power of attorney identifies who can make health care decisions for you. A living will provides instructions about certain end-of-life medical treatment when the circumstances specified by Colorado law apply.
It allows an individual to express wishes concerning life-sustaining procedures in advance rather than requiring family members to make those decisions without guidance during a medical crisis.
A strong incapacity plan often includes both documents. The living will records your choices concerning specified end-of-life treatment, while the medical power of attorney gives a trusted person authority to address the many health care decisions that cannot all be anticipated in a written directive.
Together with a financial power of attorney and appropriate trust planning, these documents help protect a family not only after a death, but also during a period of incapacity.
Protecting More Than the Inheritance Itself
The documents are only the framework. The more important planning question is what those documents are designed to accomplish.
Parents often begin by saying, “I want everything to go to my children.” That answers who should benefit from the estate, but it leaves many important questions unanswered.
For example:
- What happens if a child is still a minor?
- Should a young adult receive a substantial inheritance outright?
- What happens if a child later divorces?
- Could an inheritance become vulnerable to creditors or a lawsuit?
- What if a child has difficulty managing money?
- What if a beneficiary has special needs?
- Should a successful adult child receive an inheritance outright when assets could instead remain protected for that child’s benefit?
- What should happen to the remaining inheritance when the child eventually dies?
These are the questions that turn estate planning into legacy planning.
A well-designed trust can allow a child to have meaningful access to an inheritance while still providing safeguards. For some families, protection is needed only while a beneficiary is young. For others, a lifetime protective trust may be appropriate.
Importantly, lifetime trust planning does not necessarily mean placing an adult child under someone else’s control forever. A properly designed trust can give a responsible adult beneficiary substantial authority over the assets while retaining protections that would be lost if the inheritance were simply distributed outright.
We also recommend lifetime protective trusts when parents want an inheritance to benefit a child without unnecessarily exposing it to risks such as divorce, lawsuits, creditors, or poor financial decisions. Depending on the circumstances, an adult child may eventually serve as trustee or have substantial control over the trust while still preserving important protections. The appropriate structure depends upon the beneficiary, the assets involved, and the family’s goals.
The right balance depends upon the child, the family, the nature and amount of the assets, and the parents’ objectives.
Frequently Asked Questions
What is the best way to leave your assets to your children?
There is no single best way to leave assets to children. The right approach depends on their ages, their circumstances, and how much protection you want the inheritance to carry. Minor children cannot hold significant property directly, so a trust or custodianship is usually needed. For adult children, the choice between leaving assets outright or in trust depends on their situation. A trust can protect an inheritance from divorce, creditors, or poor timing, in a way an outright gift cannot. Choosing the right trustee is often the decision that matters most, since that person will be interpreting your intentions when you are no longer there to clarify them.
What is the best way to leave your house to your children in your will?
You can leave your house through your will, and for many families that is a reasonable choice. The most important thing to understand is that a house passing under a will generally goes through probate before title can transfer. If you leave the house to more than one child, they will own it together and will have to agree on what to do with it, which can be difficult at an already difficult time. Clearer approaches include giving the personal representative authority to sell the property and divide the proceeds, or leaving the house to one child while balancing the others with different assets. If you would rather the house avoid probate entirely, other options such as a revocable living trust or a recorded beneficiary deed are worth discussing with an estate planning attorney.
How much does it cost to create a family estate plan in Colorado?
There is no standard statewide price for an estate plan. Cost depends upon the complexity of the family, the assets involved, whether the plan uses wills or trusts, the level of inheritance protection desired, tax considerations, business interests, and other planning needs.
Price is therefore better evaluated in relation to the planning being provided. A simple plan for an individual with straightforward wishes is different from a plan for parents who want lifetime protective trusts, have a blended family, own a business, have significant retirement assets, or need more sophisticated tax planning.
An initial estate planning meeting can help identify what level of planning is actually appropriate before decisions are made about documents and cost.
How often should a Colorado family update its estate plan?
An estate plan should be reviewed whenever there is a significant change in the family, finances, or law. Events that commonly warrant a review include marriage or divorce, the birth or adoption of a child, deaths in the family, a significant inheritance, buying or selling a business, substantial changes in assets, moving to another state, or concerns about the people serving in fiduciary roles.
Even when nothing dramatic has happened, periodic reviews are useful. Families change gradually, assets acquire new titles and beneficiary designations, financial institutions change, and estate planning laws evolve.
The goal is not necessarily to rewrite documents every few years. It is to confirm that the existing plan still produces the result the family intends.
Does a Colorado will have to go through probate even with an estate plan in place?
A will does not avoid probate. In fact, the will is the document that tells the probate court how probate assets should be administered.
Whether probate is necessary depends primarily upon how assets are owned and whether they have effective beneficiary designations, not merely upon whether a person signed a will.
For example, an asset owned jointly with survivorship rights may pass to the surviving joint owner. An account with an effective beneficiary designation may pass directly to the beneficiary. An asset properly held in a revocable living trust can generally be administered by the successor trustee rather than through the probate estate.
Other assets owned individually at death may be subject to probate.
This is why estate planning should include more than document preparation. Asset ownership and beneficiary designations need to be coordinated with the legal documents so that the plan works as intended.
What is the difference between a trustee and an executor in a Colorado estate plan?
Colorado generally uses the term personal representative for the person sometimes called an executor.
A personal representative administers the probate estate. That can include gathering probate assets, addressing creditor claims, paying appropriate expenses, completing required court procedures, and ultimately distributing the remaining estate according to the will or Colorado law.
A trustee administers property held in a trust. The trustee’s authority comes from the trust agreement and Colorado trust law rather than from serving as the representative of the probate estate.
One person can serve in both roles, and that is common. But the jobs are legally distinct.
For families using trusts to protect children’s inheritances, the trustee’s role may continue long after the probate estate has been closed. The personal representative might complete estate administration within a relatively short period, while a trustee could continue managing a child’s inheritance for years — or, in a lifetime protective trust, potentially throughout the beneficiary’s life.
Contact Our Experienced Family Estate Planning Attorneys in Denver Today
Call (303) 420-2863 from wherever you are in greater Denver, JeffCo, or the Front Range. All messages are promptly returned. We keep meeting schedules flexible to accommodate your request for an evening or weekend appointment. For an informative, confidential initial consultation with our Arvada law firm’s founder Karen L. Brady, contact us today by toll-free phone, e-mail, or fax. We can recommend strategies and solutions that can help protect your children’s legacies.
