You’ve worked hard to build a life with your partner, and understanding what every couple must know about estate planning in Colorado is crucial. Your estate plan should reflect that commitment. If you’re legally married, you have powerful tools to protect your spouse, using strategies that encompass what every couple must know about estate planning in Colorado. These tools also ensure their financial security when you’re gone. Whether you’re blending families, managing separate assets, or simply planning for the future, here are several key estate planning strategies. These strategies can provide long-term benefits for both of you and align with what every couple must know about estate planning in Colorado.
Lifetime Qualified Terminable Interest Property (QTIP) Trust
If one spouse owns significantly more assets than the other, a lifetime QTIP trust allows the wealthier spouse (grantor) to transfer property into a trust. This trust is for the benefit of the less wealthy spouse (beneficiary). Unlike an outright gift, a QTIP trust may offer greater asset protection from creditors and is part of what every couple must know about estate planning in Colorado. It also offers more control over what happens to the assets after both spouses pass away.
This strategy is particularly useful in second or subsequent marriages. The beneficiary spouse receives income from the trust during their lifetime, but understanding estate planning in Colorado is crucial. They may also access the principal for specified needs such as healthcare or education. Once the beneficiary spouse passes away, remaining assets can go to the grantor’s children or chosen heirs.
If properly structured, the trust assets may be excluded from the grantor’s estate upon death. However, if the marriage ends in divorce, the trust must specify that the beneficiary is the current spouse. Otherwise, the ex-spouse could retain income rights for life, a classic example of what every couple should know.
Spousal Lifetime Access Trust (SLAT)
A spousal lifetime access trust (SLAT) allows one spouse to gift assets into a trust that benefits the other spouse. It can also benefit other beneficiaries, such as children or grandchildren. The assets in the SLAT are shielded from both estate taxes and creditors, another part of understanding estate planning in Colorado.
Unlike the QTIP trust, the SLAT doesn’t require that the spouse receive income. Access to trust funds can be structured however the grantor prefers. This makes SLATs a flexible tool for using your estate tax exemption effectively. However, SLATs are irrevocable. In the event of a divorce, the grantor spouse loses indirect access to the assets.
Caution must be taken to avoid creating “reciprocal trusts” if both spouses use this strategy. Improperly structured reciprocal trusts that are too similar may be unwound by the IRS, highlighting what every couple must know. Working with a trusted Colorado estate planning law firm is critical to ensure compliance and effective tax planning.
Community Property Considerations
If you live in a community property state, assets acquired during the marriage may be jointly owned. Before funding a trust like a SLAT or QTIP with community property, you may need a partition agreement. This agreement divides ownership. It has legal and tax implications, so be sure to consult with an experienced estate planning attorney to understand what every couple must know about estate planning in Colorado and how it affects your estate.
Portability of the Estate Tax Exemption
The federal estate tax exemption is historically high right now ($13.99 million in 2025). However, it’s set to drop significantly in 2026 unless Congress intervenes. Portability allows a surviving spouse to use the unused portion of the deceased spouse’s estate tax exclusion—called the Deceased Spouse’s Unused Exclusion (DSUE)—a must-know aspect of estate planning in Colorado.
Deceased Spouse’s Unused Exclusion (DSUE)
To secure the DSUE, a federal estate tax return (Form 706) must be filed within nine months of the first spouse’s death. Extensions are possible, but the form should meet the deadline. If this isn’t done timely, the surviving spouse loses the DSUE. They can only rely on their own exemption.
Important note: If you remarry, you must use the DSUE from your most recent deceased spouse. If your first spouse’s DSUE hasn’t been used before your new spouse passes, it’s lost. Consider consulting on what every couple must know about this.
We Can Help You Plan for the Future
Your relationship is built on love and partnership—your estate plan should reflect that. With thoughtful planning and guidance from an experienced wills and trusts lawyer in Colorado, you can ensure your spouse is protected. Furthermore, your shared legacy is preserved.
Our team offers comprehensive consultations to discuss what every couple must know about estate planning in Colorado, tailored to your goals, family dynamics, and financial picture. Contact us today to discuss how we can create a strategy that safeguards your spouse’s future and honors your wishes.
