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A will is a document containing a set of instructions stating what you want to have happen to your property after you pass away. Often, a will distributes out your property, and your heirs will receive that property outright (or in other words, all at once) after the probate process is over, which generally lasts about six to twelve months. Probate is the term used to describe administering your will, or distributing out your assets. You can also nominate a guardian and conservator for your minor children, distribute out your “stuff” (the legal term is tangible personal property), which is generally clothes, furniture, jewelry, artwork, kitchenware, etc.
In a will, you nominate a Personal Representative (often call an Executor) to administer your estate. That Personal Representative then files your will with the court after your passing. The court has the discretion to choose whether to appoint your nominated Personal Representative, who then has the authority to wraps up your final affairs, pays any remaining debts and bills, and then distributes your remaining property to your heirs according to what your will says.
A will only begins to have authority after you pass away, so it does not provide you with any incapacity planning during your lifetime. Probate in Colorado is both cost-effective and efficient. However, it is a public process, which may or may not be a factor for you personally.
Will-Based Estate Plans
A comprehensive will-based estate plan includes a Will, a General Durable (i.e. Financial) Power of Attorney, Medical Power of Attorney, Living Will, and HIPAA Waiver.
What is a will?
A will is a document that is filed with a court after an individual has passed away. The will tells the court what the deceased person wants to have happen with their property. The court then supervises the deceased person’s Personal Representative as the Personal Representative distributes the deceased person’s property to its heirs.
What are the advantages of a will?
One great advantage of the will is that it is so well known. When most people think of estate planning, they think of a will.
A will is also generally the most affordable estate planning strategy, and so it allows some individuals to have an estate plan when they otherwise would not be able to afford one.
In Colorado, the process to administer a will (or to distribute a person’s property to their heirs) is one of the most advanced and efficient in the United States. It is therefore relatively quick and cheap to administer a will in Colorado.
What are the disadvantages of a will?
A will does not help protect you if you ever become incapacitated.
The administration of a will is public, so anyone can read what the will says. While this is not a true concern for most individuals, it is a factor to consider when deciding which estate planning strategy to adopt.
What is probate?
Probate is the process by which the court validates the authenticity of a will; appoints a personal representative); and supervises the settlement of an estate, including the payment of bills, filing of tax returns, and transfer of assets to beneficiaries. If no will is presented, the court will appoint an estate representative, called an “administrator.” The administrator carries out the same duties as a personal representative; but when a person dies without a will the court must determine the heirs of the deceased. The complexity and duration of this heirship determination process varies from state to state, but typically the remainder of the probate process, such as the payment of taxes and bills, remains the same whether there was a will or not. Estate assets are distributed to heirs at law as determined by the state’s intestacy laws, not beneficiaries chosen by the deceased who created the will.
In Colorado, probate is a pretty efficient and cheap process. However, it is a public process. The probate court supervises the probate process, and all the funds are distributed in “lump sums” to the heirs named in the will (assuming the will does not create a testamentary trust). Any creditors that you have will also have a voice in the probate process. Once the will has been probated, the will ceases to function, as your estate no longer holds any property.
What is a Personal Representative?
The Personal Representative is also known as an Executor. This is the individual or institution named in a will who becomes responsible for carrying out the instructions provided in your will during the probate process and distributes that property to the heirs. The Personal Representative works under the supervision of a judge and has to report back to the judge on what the Personal Representative has done.
Is a will or trust better for me and my family?
The decision to have a will or trust is an incredibly personal and unique decision. I advise that you meet with an estate planning attorney to help you understand your options and to help you make the best decision for yourself and your family.
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Join Brandon Rains and our special presenter, Katie Spencer. Dr. Katie Spencer is a wealth coach and clinical psychologist. Through her business Northbound Coaching, Dr. Spencer offers an insider’s perspective on wealth dynamics within family systems. By working to strengthen relationships and build the foundation to effectively navigate the landscape of wealth, she helps clients identify […]Find out more »