Whether or not your devisees or heirs will have to go through probate to transfer title to your assets depends on how your assets were owned when you died. Depending on how your assets are owned, your estate may not have to go through the probate process because your will or the intestacy laws may not control the distribution of some or all of your assets.
There are certain types of assets that are not governed or distributed per the terms of a will. Only assets that were owned by you in your individual name (and which do not have a beneficiary designation) are controlled by the will. Assets that are titled in a living trust, or owned in joint tenancy, such as real property or a bank account, or assets that have a beneficiary designation like a life insurance policy or IRA, pass to the beneficiaries by operation of law, and are not subject to the provisions in the will or the probate process.
Probate is the legal process that is used to transfer title of non-jointly owned assets from the decedent to his or her devisees (recipients named in the will) or heirs (recipients named by law). Wills and intestate estates which must be probated range from simple and inexpensive to complicated and costly, depending upon the degrees of court involvement and complexity of the estate.
Powers of attorney or an “advanced directives” allow you to designate someone you know and trust to be your agent to make health care and financial decisions on your behalf. The health care power of attorney and financial power of attorney are critical components of your asset plan. When you complete your estate plan, you choose who will be your agent, and what decisions your agent may or may not make on your behalf concerning emergency and important medical decision and management of your financial assets.
Your will is part of an estate plan that includes your health care power of attorney, financial power of attorney, and living will. Once you have executed a will and estate plan documents, there will be changes in your life, your families’ lives, and changes in laws, including state and federal tax laws. Colorado passed the “Power of Attorney Act in 2010,” therefore, any documents executed prior to 2010 should be reviewed by an attorney.
In addition, if you moved to Colorado or move to another state, it is prudent to have your will reviewed by a local attorney. While Colorado law recognizes wills from other states that were validly executed in that state, there are other factors that could affect your will, including community property issues, differing rules about the disposition of personal property, and local rules regarding spousal and dependants’ rights.
If a person dies without a will, he or she is said to have died “intestate.” When this happens, Colorado law essentially writes the person’s will for them through a set of statutes that dictate who is entitled to what, who has priority to be the personal representative, and other terms and procedures related to estate administration or probate.
There are many reasons a person may want a will. Families with minor children would want to have a will to appoint a guardian of your choice for the minor children and to manage the assets of the minor children in trust, in the event there is no surviving parent and eliminates the costly court proceedings to appoint a guardian. A will designates who will receive your property upon your death, and appoints a person called a personal representative to oversee and administer your estate and making sure your wishes are followed.
An estate plan is a series of documents in which you provide instructions and declarations regarding your care if you become mentally or physically incapacitated and how your assets should be distributed upon your death. The estate plan usually includes a will, health care power of attorney, living will, and a financial power of attorney. A good estate plan provides both financial and personal considerations. The estate planning documents will address the preservation and growth of your assets both while you are alive and for your beneficiaries after your death and should include legal strategies to minimize tax liabilities upon your death. The health care power of attorney and living will allow you to document and control decisions with regard to who should speak for you and who should care for you when you are unable to do so yourself.