Frequently Asked Questions
Find Answers to Common Questions Here
Welcome to our FAQ page, where we address common questions about legacy planning and estate administration in Colorado. At Premier Legacy Law, we understand that navigating the legal landscape can be complex and overwhelming. Our goal is to provide you with answers to common questions related to estate planning, probate and trust administration, and business formation. Please note that the FAQ section is intended to provide general information and is not legal advice. Contact us to schedule a complimentary planning meeting where we can provide guidance tailored to your specific situation.
We have FAQs for Estate Planning, Probate and Trust Administration, and Business Formation below.
Estate Planning
What is estate planning?
Estate planning involves creating a comprehensive legal plan to manage and distribute your assets according to your wishes during your lifetime, in case of incapacity, and after death. An estate plan also includes healthcare directives and legally enforceable instructions intended to be honored by family, friends, and third parties alike. This is one of the best gifts you can leave your family.
Why is estate planning important?
Estate planning is important because it allows you to maintain control over your assets, minimize taxes, protect your loved ones, and ensure your healthcare preferences are followed. A good estate plan preserves your legacy, reduces the strain on your loved ones tasked with administering your estate, minimizes the time and cost associated with settling an estate, minimizes conflict between family members, reduces the tax burden on your estate, and creates an effective mechanism for trusted individuals to act on your behalf in case of serious illness or death.
What are the benefits of working with an experienced estate planning attorney?
Estate planning attorneys have the knowledge and experience to create customized plans based on your unique needs, circumstances, and wishes. They can provide guidance, ensure legal compliance, and help minimize potential pitfalls or challenges.
What documents are included in an estate plan?
A comprehensive estate plan in Colorado typically includes a Will (Last Will and Testament), Trust (if applicable), General Durable Power of Attorney, Healthcare Power of Attorney, Advance Healthcare Directive (Living Will), Health Insurance Portability and Accountability Act (HIPAA) Waiver, and Declaration of Disposition of Last Remains.
Do I need an estate plan if I don’t have a lot of property?
Yes, everyone can benefit from good estate planning as it ensures your wishes are followed, you are protected by trusted agents during incapacity, guardianship for minor children is established, and healthcare decisions are made according to your preferences.
What is a Will, and why do I need one?
A Will is a legal document that specifies how, and to whom, your assets should be distributed after death. It also allows you to name guardians for minor children and a personal representative to manage the estate. A carefully planned Will memorializes your wishes, making them legally enforceable in court, helps minimize court battles, and avoids the pitfalls of the default and rigid rules provided by the government to those who pass away without leaving a valid Will.
Can I name a guardian for my minor children in my estate plan?
Yes, through your estate plan, you can designate a guardian for your minor children in case of incapacity or death. This ensures their care and well-being according to your preferences.
Can I change or revoke my estate plan?
Yes, an individual can change or revoke her or his estate plan at any time as long as she or he is mentally competent. Please consult with an attorney to ensure the changes are legally valid and avoid marking on your original estate planning documents.
What happens if I die without an estate plan?
If a Colorado resident dies without an estate plan, her or his assets will be distributed according to the default Colorado laws, which may not align with an individual’s wishes. This is a default for everyone who dies without a plan and it designates nearest family members to be in charge and inherit assets without considering your preferences. Probate court proceedings may also be required, causing delays and additional costs.
How does estate planning help minimize taxes?
Estate planning strategies, such as establishing trusts and lifetime gifting strategies, can help minimize estate taxes. Proper planning allows you to maximize the amount of wealth passed on to your beneficiaries.
How much does estate planning cost?
The cost of estate planning varies depending on factors such as the complexity of your estate and the types of documents in your plan. Because everyone’s individual circumstances differ, fees are discussed during the complimentary initial planning meeting.
Are there any specific estate planning considerations for blended families?
Blended families may have unique estate planning considerations, such as remarriage protection after the death of a spouse, providing for both biological and stepchildren, and ensuring fair distribution of assets. Estate planning can help navigate these complexities.
What is a revocable living trust, and when should I consider using one?
A revocable living trust is a legal entity that holds assets for the benefit of beneficiaries without limiting the control that the owner(s) have over these assets during their lifetime(s). Trusts are useful for various purposes, such as avoiding probate, keeping your plans private, protecting beneficiaries, and managing distributions over time.
What is a power of attorney, and why is it essential to include in an estate plan?
A power of attorney is a legal document that designates someone to act on your behalf. Usually, this document is used if you become incapacitated and cannot manage finances or make healthcare decisions. Typically, there is one power of attorney for assets/finances and a separate one for healthcare decision-making.
What is an advance healthcare directive, and why should I have one?
An advance healthcare directive (living will) outlines your healthcare preferences and wishes during end-of-life situations. It ensures your wishes regarding ongoing medical treatment and end-of-life care are respected.
What is the difference between a revocable trust and an irrevocable trust?
A revocable trust can be modified, amended, or revoked during the owner’s lifetime, providing ultimate flexibility and control to the owner to make any necessary changes in response to life’s evolving circumstances. An irrevocable trust cannot be changed or revoked after it is created. When used correctly, an irrevocable trust offers benefits such as asset protection and should only be used in specific circumstances. Always seek legal advice before establishing any trust.
How often should I update my estate plan?
It is generally recommended to review your estate plan every few years or after major life events, such as marriage, divorce, birth of children, loss of a loved one, or significant changes in financial circumstances. Updating your plan ensures it remains current and aligned with your wishes.
Can I include digital assets in my estate plan?
Yes, it’s important to address digital assets in your estate plan. This may include digital files, online accounts, social media profiles, cryptocurrency, and intellectual property. Clearly state your wishes regarding access, management, and distribution of digital assets.
Can an estate plan help with charitable giving?
Absolutely. Estate planning allows you to include charitable giving as part of your legacy. It can involve charitable trusts, donor-advised funds, or specific bequests to charitable organizations.
Probate and Trust Administration
What is probate, and why should I try to avoid it?
Probate is the legal process that validates a Will (if one exists) or if there is no Will, it applies the default Colorado laws to settle the decedent’s debts and distribute assets after death. This is often a lengthy and expensive process. Avoiding probate can save time, money, and maintain privacy for your estate.
Are there any shortcuts to probate in Colorado?
Generally, the answer is no. However, in some circumstances probate may be avoided in the event the decedent left what is legally referred to as a “small estate” in Colorado. If you are handling someone’s estate, you should consult with an attorney to help determine if you can use the small estate process.
How long does the probate process typically take?
The duration of the probate process varies depending on factors such as the complexity of the estate, assets involved, and court caseload. The minimum amount of time for probate in Colorado is 6 months and a typical probate matter can last between 6 to 12 months.
Do all assets go through probate?
No, not all assets go through probate. Certain assets that have designated beneficiaries or joint owners can pass automatically upon the owner’s death. These assets include life insurance policies, retirement accounts, bank accounts with payable-on-death designations, and assets held in trusts.
What is a Personal Representative and what are their responsibilities?
A Personal Representative, formerly known as an Executor or Administrator, is an individual or entity appointed to manage the estate of a deceased person. Their primary responsibilities are to carry out the instructions outlined in the deceased’s will or, in the absence of a will, settle the estate’s debts, and to distribute the remainder of the estate assets to beneficiaries.
What is a Trustee and what are their responsibilities?
A Trustee is an individual or entity appointed to manage a trust on behalf of the beneficiaries. The Trustee is responsible for managing the trust assets as well as ensuring they are invested and maintained appropriately. Ultimately, the trustee must follow the terms of the trust, settle debts, and distribute property to beneficiaries in accordance with the terms of the trust document.
What is trust administration, and how does it work?
Trust administration is the process of managing and distributing assets held in a trust after the trust creator’s death or incapacity. It involves tasks such as asset valuation, beneficiary notifications, and ensuring the terms of the trust are followed.
Business Formation
What are the advantages of working with an attorney for business formation?
Working with an attorney for business formation ensures compliance with legal requirements, helps with choosing the appropriate business structure, and provides guidance on important decisions. It protects your interests and sets a solid foundation for your business.
What is the difference between a sole proprietorship, partnership, LLC, and a corporation?
A sole proprietorship is an unincorporated business owned by a single individual, while a partnership involves two or more owners. An LLC (Limited Liability Company) and corporation are the preferred separate legal entities that offer liability protection for owners.
Do I need a separate business bank account?
It is generally advisable to have a separate bank account for your business. This helps maintain clear financial records, limit exposure of personal assets, separate personal and business funds, and simplifies accounting and tax filings.
What legal requirements should I be aware of when starting a business?
Legal requirements for starting a business include obtaining necessary permits and licenses, registering with government authorities such as the Colorado Secretary of State, complying with tax obligations such as obtaining a tax identification number and regularly filing taxes, as well as following employment laws. We can guide you through the specific requirements for your business.
Can I change my business structure after the business has been formed?
Yes, it is possible to change your business structure after the business has been formed. However, it can involve various legal and tax implications. Consulting with an attorney is recommended to understand the process and ensure compliance with applicable laws.
Can an attorney help with business succession planning?
Yes, business succession planning involves creating a strategy for the transfer of ownership and management of a business. An attorney can assist in drafting agreements, addressing tax implications, and developing a smooth transition plan to preserve the business’s continuity.
What are the legal requirements for dissolving a business?
The legal requirements for dissolving a business vary depending on the business structure and applicable state laws. It generally involves filing dissolution documents, settling outstanding obligations, and distributing remaining assets. Consulting with an attorney ensures compliance with the necessary legal steps.
How can I protect my business’s confidential information and intellectual property?
To protect confidential information, you can implement non-disclosure agreements (NDAs), non-compete agreements, and other contractual provisions. Our law firm can assist in drafting these agreements and provide guidance on best practices for safeguarding sensitive business information.