Estate Planning 101

Estate planning isn't just for the wealthy—everyone needs a plan to protect their family and ensure their wishes are honored. This guide covers the essential documents and concepts every adult should understand.

The Essential Estate Planning Documents

Last Will and Testament

A will is the foundation of any estate plan. It specifies:

• Who inherits your assets
• Who will be the guardian of minor children
• Who will execute (manage) your estate

Without a will, the state decides who gets your assets according to intestacy laws—which may not match your wishes.

Revocable Living Trust

A trust holds assets for beneficiaries and offers several advantages:

• Avoids probate, keeping your affairs private
• Provides continuity if you become incapacitated
• Can provide for minor children or special needs beneficiaries
• Offers more control over how and when assets are distributed

Financial Power of Attorney

Authorizes someone to manage your financial affairs if you become unable to do so. Choose someone you trust completely—they'll have access to your bank accounts and investments.

Healthcare Power of Attorney

Designates someone to make medical decisions on your behalf if you can't communicate. This person should understand your healthcare preferences and values.

Living Will / Advance Directive

Specifies your wishes for end-of-life care, including whether you want life-sustaining treatment in certain situations. This gives your family guidance during difficult times.

Beyond the Basic Documents

Beneficiary Designations

For retirement accounts, life insurance, and some bank accounts, beneficiary designations override your will. Review these regularly—outdated designations are one of the most common estate planning mistakes.

HIPAA Authorization

Allows designated individuals to access your medical information. Without this, healthcare providers may not be able to discuss your condition with family members.

Letter of Intent

A non-binding document that provides guidance to your executor and beneficiaries. Can include funeral wishes, location of important documents, and personal messages.

Estate Planning for Different Life Stages

Young Adults (20s-30s)

• Basic will naming beneficiaries
• Power of attorney documents
• Beneficiary designations on retirement accounts
• Guardian designation if you have children

Established Adults (40s-50s)

• Review and update existing documents
• Consider a revocable living trust
• Life insurance to protect family
• Begin thinking about legacy goals

Pre-Retirees and Retirees (60+)

• Comprehensive estate plan review
• Long-term care planning
• Gifting strategies if appropriate
• Ensure beneficiary designations align with overall plan

Colorado Estate Planning Considerations

For Douglas County residents, keep these state-specific factors in mind:

• Colorado does not have a state estate or inheritance tax
• Probate in Colorado is relatively straightforward but still worth avoiding for larger estates
• Colorado recognizes transfer-on-death (TOD) deeds for real estate
• Community property laws do not apply in Colorado (it's an equitable distribution state)

Common Estate Planning Mistakes

• Not having a plan at all - The biggest mistake
• Outdated beneficiary designations - Ex-spouses, deceased relatives
• Not funding your trust - A trust only works for assets titled in it
• Forgetting digital assets - Social media, crypto, online accounts
• Not updating after life changes - Marriage, divorce, births, deaths
• DIY for complex situations - Some situations require professional help

When to Update Your Estate Plan

Review your estate plan every 3-5 years or after major life events:

• Marriage or divorce
• Birth or adoption of a child
• Death of a beneficiary or executor
• Significant change in assets
• Moving to a new state
• Changes in tax laws

Working with Professionals

While simple estates can use online tools, consider working with professionals for:

• Estates over $1 million
• Business ownership
• Blended families
• Special needs beneficiaries
• Complex investment portfolios
• Real estate in multiple states