Family Estate Planning

 

Documents that benefit your children:

  1. Delegation of Power by Parent: If you have an emergency in the short-term and need a trusted person to care for your children, you can use a Delegation of Power by Parent to grant short-term custody. This document is very useful if you need someone, whether or not a family member, to care for your children for a few days or weeks.
  2. Nomination of Guardian If you and your spouse, or partner, are unable to care for, or raise, your children, you want to name someone you trust implicitly as their guardian. You can name a couple or a single person. In Colorado, a court is required to appoint who you name as guardian unless it would endanger your children.

Documents that benefit you while you are alive:

  1. Durable Power of Attorney—General/Financial: This document is used by one person (the principal) to grant to another (the agent) the legal right to stand in the shoes of the principal and act for the principal in financial and business matters. This authority is granted immediately and endures even though the principal becomes temporarily or permanently incapacitated—it is for such an event that the power of attorney is put in place. The agent cannot “take the money and run.” The agent must use the principal’s finances as the principal would, for the benefit of the principal.
  2. Durable Power of Attorney—Health Care: This document is very similar to the Durable Power of Attorney—General/Financial, except it is tailored to address the various health care needs and decisions required for the benefit of the incapacitated individual.
  3. HIPAA Authorization: This document comes from the 1996 Health Insurance Portability and Accountability Act (HIPAA). In the event of your temporary, or permanent, incapacity, it is through this document that you authorize your agent, in your Durable Power of Attorney for Health Care, to have access to your private health care information. Without this document, your agent will be prevented from having access to your protected health care information and thus may be unable to make good health care decisions for you when you are incapacitated.
  4. Living Will (Declaration as to Medical or Surgical Treatment): This document is sometimes referred to as the “pull-the-plug” document. It applies when you are in the final moments of life. In this document, you decide, in advance, what instructions you want to give, regarding life-sustaining procedures, artificial nourishment and organ donation. This document is used to help your health care agent and medical personnel carry out your wishes in the event you are terminally ill, comatose and otherwise incompetent or unable to make such decisions for yourself.

Documents that benefit you and your family after you have passed on:

  1. Last Will and Testament: This document directs how your assets will be given away after your death. Your assets can be given directly to individuals or can be given to a trust that will then distribute the assets. Having a Will does not mean you avoid probate.
  2. Revocable Living Trust: A trust is a simple written agreement where you put legal title to certain property in the name of a person—generally yourself—as trustee of your trust, to be held for the benefit of yourself or your beneficiaries. This tool is generally used to avoid probate and will do this for virtually any asset you own. It is also a very helpful tool, if you have a child with special needs.
  3. Marital Deduction or A-B Living Trust: Similar to the Revocable Living Trust, this trust also avoids probate; however, this type of trust is more complex and takes advantage of the marital exclusion from estate taxes. This trust is used to pass to one’s heirs/beneficiaries the greatest amount of one’s estate assets rather than having these hard-earned assets go to the government in taxes. Currently that amount is $5,250,000 per person ($10,500,000 per couple. This Trust remains helpful in protecting the maximum amount of one’s estate, especially in the event a surviving spouse remarries.
  4. Beneficiary Deed or Transfer on Death Deed: In states where this is permitted, at your death, you can automatically transfer title to your real estate (home, timeshares, rentals, mineral interests, etc.) to your beneficiaries without probate—and without having to have a living trust.
  5. Quitclaim Deed: This document is used to transfer title to certain real estate assets into joint tenancy, tenancy in common, or the name of your living trust. This deed is often used in estate planning so your heirs and beneficiaries avoid having to go to probate in all states where you own real estate.
  6. IRA Inheritance Trust: A specialized, IRS-compliant trust that serves as the beneficiary of your IRA. This unique trust assures the distribution of your IRA assets to your beneficiaries over their respective lifetimes. Your IRA beneficiaries will maximize the stretch-out of your IRA assets. In addition, these inherited assets will be protected from divorce, lawsuits and creditors.

 

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