Wills, Trusts, & Probate FAQs
1. What if I Die Without a Will in Colorado?
If you die intestate, meaning you don’t have a will, your estate, depending on its size, could go into what is referred to as “probate.” This means that the court gets involved to settle debts using your assets, then distribute the remaining property (if any) according to a predetermined formula.
Colorado has what are called intestacy succession laws to determine what happens if you die without a will. Some of the key points are:
- If you are survived by a spouse, but have no parents or children, your spouse will inherit the entire estate.
- If you are survived by children and a spouse who is the legal parent of your children, your spouse will inherit the entire estate.
- If you are survived by a spouse who has children who are not legally your children, your spouse will inherit the first $225,000 of the estate, plus half of the rest of the estate. The second half of the remaining estate is divided equally among your children.
- If you are survived by a spouse and adult children who are not legally your spouse’s children, your spouse will inherit the first $150,000 of the estate and half of the remaining balance. Your children will inherit the remaining half of the balance.
- If you have at least one minor child of whom you are the legal parent, but your spouse is not a legal parent, the entire estate will be equally split between your surviving spouse and your child(ren).
- If you are survived by a spouse and one or both parents, but with no children, your spouse will inherit the first $300,000 of your estate and 75% of the remaining balance. Your parent(s) will receive the remaining 25%.
If you have a significant estate, over $11.4M, your estate will be subject to federal taxes. A thoughtfully prepared will can distribute assets in such a way that tax liability is minimized or eliminated, saving your loved ones considerable cost and difficulty.
Unfortunately, issues such as child custody and business assets are not so easily determined. If you are survived by a minor child, the court will appoint someone to represent his or her best interests. Keep in mind, this person does not know your wishes or intent, nor does he or she know your child. Though they do their best, providing for your child(ren)’s care and well-being in a will is the only way to truly ensure they receive the care you would want.
The only way to ensure your desires are known and followed is by establishing a will with the help of a family law attorney well-versed in estate law. The Gasper Law Group has a long and successful history helping Colorado residents with wills and probate issues. We can help.
2. Who Needs a Will?
A will is a legal document that outlines the distribution of your property and money after you’ve passed. It also relays your wishes regarding issues like who should care for minor children or how your business assets should be distributed.
Wills are not only for the wealthy. Regardless of how much money or assets you have, a will helps to ensure that your personal belongings, money, and other assets will go to the person or people you direct.
If you are a business owner, establishing a will is crucial. A will can outline who controls the business once you’ve gone. Without a will, your interest in your business will go into probate, which can cause the business to be assigned a temporary owner for a period of months. Your heirs, determined by the state through a set formula, are all assigned a percentage of the business assets based on Colorado’s intestacy laws. This, too, can cause significant problems among family members and other would-be beneficiaries.
A will allows you to specify what funeral arrangements you would like, and spell out other issues that are important to you—and that you don’t want to burden your loved ones with.
Also, a will is critical if you have minor children. Should something tragic happen to you while your children are still young, a will allows you to choose a legal guardian who will care for them as you would, if there is no surviving parent or spouse.
Taking care of all of your affairs is necessary, even after you’ve passed. Unfortunately, credit card debt and other bills don’t simply go away after you’ve died; they must be paid from your remaining assets before they can be distributed to your beneficiaries. A will allows you to assign an executor to cancel credit cards and pay bills so that your loved ones can be spared the anxiety and hassle at an already-difficult time.
Remarkably, an estimated 70 percent of Americans do not have a will or a trust. Without a will, decisions about your estate are left to probate court—that is, in the hands of state officials or judges who don’t know you or your wishes.
If your estate ends up in probate, your family and loved ones will likely have to spend a considerable amount of time and money sorting out your affairs, and the result may very well be something you would not have chosen.
The family law attorneys at The Gasper Law Group can help you establish a legally binding will that addresses potential issues that we see all-too-often in probate court. We can help you to write a will that ensures that, should something happen, your desires are met and your family members and loved ones are spared from additional pain.
3. What is the Difference Between a Will and a Trust?
Both wills and trusts are important estate planning devices that can work together to ensure your affairs are properly handled. The main difference between a will and a trust is that a will goes into effect after you have passed. A trust can be created when you wish it.
An executor can be assigned in a will to carry out your wishes; in a trust, a trustee is designated to hold and manage property before or after the death of another person, who is called the “beneficiary.” A trustee can be another person or an institution, such as a law firm or a bank.
There are two types of beneficiaries in a trust. The first type of beneficiary, who is often a child or an elderly person, receives income from a trust, often on a regular, recurring basis. The second type of beneficiary receives income that is left over after the first beneficiary (or beneficiaries) die. An example would be an elderly person who has a trust established to pay for their daily care. When they die, their surviving children may become beneficiaries.
Another difference is that a trust can only manage property or assets that have been defined in the trust, while a will covers any property that is in your name. A trust also does not allow you to specify your funeral arrangements, name caretakers for pets, or cancel debts that others may owe—all of which can be done through a will.
What a trust can do is help you to plan for disability and save you money on taxes. Trusts can work hand-in-hand with wills, and are helpful in many situations.
The attorneys at The Gasper Law Group can help you to develop a trust and a will to protect your assets. Call us today!
4. Do You Need a Lawyer to Write a Will?
In today’s internet-driven world, many people think they can get by with what is called a “statutory will.” This is a form they can download, then fill in blanks or check boxes, sign, and call their last will and testament. Most state probate courts, including Colorado, do not acknowledge statutory wills.
There are many rules that determine whether or not a will can be enforced by the state. Why take a chance?
The probate attorneys at The Gasper Law Group can help you draft a binding will to account for real estate, bank and savings accounts, investments, 401k/pension/retirement accounts, life insurance policies and annuities, business ownership and interests, vehicles, and other personal property, as well as outline your wishes for children, pets, real estate, funeral arrangements, and any other topics important to you.
As life changes, we’ll be there for you to help you update your will so that, if and when the time comes, you will have been prepared. After all, peace of mind is the last loving gift you can give to your loved ones.
Contact Gasper Law Group for a FREE initial consultation.
5. What is a Durable Power of Attorney?
A power of attorney (POA) gives someone the authority to handle matters pertaining to a will or a living trust on your behalf in matters such as finances or health care. A durable power of attorney will remain in effect in the event the individual becomes incapacitated due to injury or illness.
A durable power of attorney will be able to assist with plans around medical emergencies and mental incapacitation to protect your assets, unlike an ordinary power of attorney that will expire if you are mentally incapacitated.
6. When Should I Make a Will or Trust?
There isn’t a specific time or age that’s best for making a trust or creating a will in Colorado, but everyone should create one at some point after they have attained a number of assets.
A majority of people may set up a will, but a living trust isn’t always necessary. Setting up a living trust will depend on certain circumstances, such as an individual’s age, financial situation, and marital status. You should also consider creating a trust in conjunction with a will that names a specific executor, along with guardians for any children who are minors. A will also ensures that all property is cared for if certain properties don’t appear in your trust.
In short, it’s often best to have a will in place at all times, but certain circumstances may warrant the creation of a living trust.
7. How Often Should I Update My Will or Trust?
Under certain circumstances, you should make changes to your will or trust, but these circumstances will differ between the two.
You should make updates to a will in the event of the following:
- Changes in tax laws that affect estate assets
- Inheritance of assets from family or friends
- Buying or selling a business
- Buying or selling real estate
- Marriage or divorce
- Financial struggles
- Birth of a new child or grandchild
- In-laws join the family
- Unanticipated medical costs
- Moving to a new state or country
- The death or incapacitation of a child, grandchild, or spouse
You should make updates to a living trust in the event of the following:
- Marriage or divorce
- Changes in residency status
- Financial changes
- Expiration of trustees or beneficiaries
- Trust assets are impacted by new tax laws
It’s also ideal to make updates to your trust’s schedule of assets once every five years, which will help you keep track of new or expired assets.
8. What is a Family Trust?
A family trust is simply a subset of trusts that includes family members as beneficiaries. The purpose of family trusts is to ensure that assets or money go to designated family members.
9. What is Probate?
In simple terms, probate is the process that the state goes through to determine what happens to your estate if you don’t have a will. Probate can also involve validation of a will to determine if it is genuine or not, as is often the case for handwritten, or holographic wills, or other wills that are not properly documented or notarized.
The probate process can be long and expensive if a well-executed will has not been established. Some cases have been known to go on for years, leaving loved ones in a prolonged difficult position.
Every will must be validated through the probate process, but not all wills are created alike. The best way to avoid long probate processes is to write a self-proving will, meaning a will that is properly executed, witnessed, and notarized, with the help of a probate attorney.
Should you find yourself facing probate court to settle a loved one’s estate, the attorneys at The Gasper Law Group can help you to contest a will or navigate the probate process. We will make sure you are heard, and that your rights are protected.
10. What is Intestacy?
Intestacy is the condition of an estate in the event its owner dies without a will, provided he or she owned property with a total value that was greater than the amount of debt they owed. Wills that only cover a portion of a person’s estate may also be intestate upon the owner’s passing.
When intestacy occurs, the estate goes to the probate courts to designate beneficiaries and distribute assets. The best way to avoid intestacy is to create a comprehensive will that identifies beneficiaries who you want to inherit your assets.
11. Can You Avoid Probate in Colorado?
Yes, you can avoid probate in Colorado by making a living trust, which will prevent any asset you own from going to probate courts, including bank accounts, real estate, and more. You can do so by creating a trust document that names a specific individual to serve as a successor trustee following your death. You will then need to transfer ownership of your property to yourself as the trustee identified in the trust.
You can also avoid probate in Colorado through:
- Joint ownership of property
- Payable-on-death designations for bank accounts
- Transfer-on-death real estate deeds
- Transfer-on-death registration for securities
- Simplification of probate procedures for small estates
12. What is the Difference Between Formal and Informal Probate?
Informal and formal probate both refer to the kinds of procedures that are used to appoint a representative for an individual to handle various matters and accept a will for probate. The most commonly used of the two is informal probate, which is the least difficult to enact if assets are straightforward and the parties involved are in agreement with each other.
However, formal probate will be required under certain circumstances, such as when:
- There are issues with a will
- Heirs are missing or unknown
- Heirs are still minors
- The estate is insolvent, i.e., debts exceed assets owned
- There are disputes or there are likely to be disputes among heirs
- Problems are expected with the administration
The informal probate process will entail presenting an application to a registrar as opposed to a judge. Registrars then approve the estate and ensure completion of all paperwork, but won’t be involved once they have approved the estate.
Formal probate, on the other hand, involves a probate attorney. The formal process can be more complicated and involve many steps, which is why it’s best to consult with a probate attorney at The Gasper Law Group who can walk you through formal probate in Colorado.