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3 Estate Planning Tips

Estate planning can seem like a daunting task, but it doesn’t have to be – as long as you have a team of people to help you along the way. While creating a valid will or trust should be on the top of your To Do list, there are other estate planning tips that can add other layers of protection for your estate as well as your family’s financial future. Here are 3 tips to take into consideration when you start estate planning in Colorado:

Tip 1: Divide and Conquer the Responsibilities

There is a lot to be said for teamwork when it comes to estate planning. Rather than putting all of your eggs in one basket by appointing a single individual to handle your affairs, spreading responsibilities to several people or groups can make the process more efficient. Some individuals can work with you directly while you are of sound mind and good health; others will take over in the event you become incapacitated; and others will be responsible for handling your affairs after you pass away. Start thinking about people or groups to fill these roles: 

  • Investment advisor to help you manage your money now
  • Estate planning attorney to draft pertinent documents to protect your estate
  • Agents under powers of attorney to make financial and medical decisions on your behalf
  • Certified public accountant (CPA) to handle taxation matters
  • Insurance advisors to ensure you have adequate protection and beneficiaries in place

Tip 2: Stay on Top of Tax Laws

The current federal estate tax exemption threshold is $11.4 million for individuals. That means you can leave that monetary amount to your beneficiaries and they will not have to pay federal estate or gift taxes. There is also currently a $15,000 gift exclusion amount that you can distribute each year with no gift tax due. The important takeaway here is that these numbers are constantly changing based upon the political climate. In fact, the current estate tax credits are due to sunset in 2026 which would cut the current credits by half. If you have a sizeable estate, this could greatly impact your estate plan in the future. If you haven’t planned for this reduction, your estate could be subject to estate tax which may reduce the amount your beneficiaries receive.  

Your tax advisor or estate planning attorney should regularly update you on the new tax laws in Colorado and at the federal level to ensure that your current estate plan will minimize estate taxes. You may need to revisit your gifting plan so you can keep your estate value well within the threshold amounts. 

Tip 3: Review, Review, Review

An estate plan should not be a static document; it should be a dynamic work in progress. The more regularly you review your plan, the easier it will be to keep it current and relevant. In addition to reevaluating beneficiaries, you may need to update the terms of your document or revise the people you have named to act on your behalf (medical and financial powers of attorney, for example). Changes occur in laws, relationships dissolve, your personal viewpoints change, etc. If your estate documents are not reviewed regularly, they may not reflect the person you have become and the people you trust. 

It is also important to review the beneficiaries you have named on your life insurance or disability insurance policies and other types of documents. You may also need to increase your coverage so you will have an adequate amount to protect your beneficiaries. 

Start Building Your Team with Us 

It takes a village to properly plan your estate. The first step in the process should be to contact the Denver estate planning lawyers at The Brown Law Firm, LLC. We can get the process started and help you identify all of the other key players that should be involved in your estate planning. We are also happy to work with your other team members (tax lawyers, powers of attorney, etc.) to ensure you are properly covered. Our goal is to provide adequate protection for your estate right now and also for your surviving family members after you are gone. Contact us today at (303) 339-3750 or send us a message online to start the conversation.