Preventing Disputes With a Comprehensive Estate Plan
Establishing an estate plan is a gift to your family and friends. Obviously, it’s an opportunity to provide for the financial security of your loved ones. But it is also an opportunity to help your loved ones avoid the arguments and unpleasantness that often erupt when families have to distribute a decedent’s assets. People get weird—especially when they are sad and stressed. And families have a lifetime of baggage that can transform a minor dispute into a relationship-ending battle. Worse yet, if a disgruntled relative decides to go out hire an attorney to take the fight to court, it can bleed significant resources from your estate. You want your intended beneficiaries to get your money, not a bunch of lawyers.
You can’t just assume that your family and friends will get along and “do the right thing.” And disputes are particularly common where:
- there is estrangement in the family;
- siblings, parents or children aren’t fond of the current spouse or partner,
- the decedent was cohabitating with a long-term partner, but remained unmarried.
However, the good news is that there are a number of ways to make sure your friends and family carry out your wishes with minimal rancor after you pass away.
Have a Comprehensive Estate Plan
First and foremost, complete and execute an estate plan. For most people an estate plan will consist of a will, possibly a trust or trusts, a general power of attorney, and advanced medical directives. If you have minor children, your estate plan will also designate individuals to care for your children and manage their finances. The more specific you are regarding your wishes, the less wiggle-room you leave for disputes.
If you pass away without an estate plan, you may be creating a real headache for your loved ones. Colorado law has statutes to determine who will get your property if you die intestate (which is the legal term for dying without a will). But those laws are merely defaults and they tend to privilege a hetro-normative, traditional concept of family. For example if you are in a committed relationship, but remain unmarried, and do not have an estate plan, you may be surprised to learn that all of your property that is in your name, only, will pass to your parents, children or siblings and not your partner. Conversely, if you are in a second marriage and have children from a prior relationship, your kids won’t end up with much unless you are pretty wealthy. Colorado law heavily favors the surviving spouse, especially if there is no estate plan.
Keep Your Estate Plan Up-To-Date
Secondly, help your attorney to keep that plan as clear, thorough and up-to-date as possible. If you have a significant change in life or family circumstances, your will may need to be updated and your assets may need to be retitled. Divorce is a great example. Under Colorado law, once a divorce decree is entered, your ex-spouse and their family members are effectively eliminated from your estate plan. This could create unintended consequences. For example, in some cases, a gift to a stepchild could be nullified even though you still intended for that stepchild to be included in your will. Colorado law doesn’t care if you have a good or bad relationship with your former spouse and their relatives. Once the divorce decree enters, your existing estate plan is altered and needs to be revised.
Title Assets Appropriately
Finally, if you are concerned that certain individuals may try to cause problems, you can consider removing some of your assets from your probate estate. Under the law there are “probate” and “non-probate” assets. Probate assets are things that are transferred pursuant to your will. Non-probate assets are assets that pass according to how the asset is titled. For example, if your home is in your name only, it will pass according what is in your will. But, if it is in your name and someone else’s name in joint tenancy, it will pass to that other person regardless of what it says in your will.
As a practical matter, it is much harder for a disgruntled relative to challenge the titling of assets than it is for them to challenge your will. If most of your valuable assets are non-probate assets, greedy or problematic relatives may decide a will contest isn’t worth it. Therefore, it is possible to strategically title assets in a manner that can put them beyond reach of those who may seek to disrupt your estate plan.
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Contact The Law Office of Keenan Copple PC today to learn more about the importance of estate planning.
Contact us today at (303) 819-6415 to schedule a consultation to learn more about your legal rights and options and how estate planning can best protect you and your family.