I’m Not Married and I Don’t Have Kids, So I Don’t Need to Bother
In my experience, it’s often more important for folks that don’t fit into the “family values” mold to have an estate plan. The anti-DEI gestapo may try to cancel me for pointing this out, but our laws are written with a traditional, hetronormative family in mind. So, if you are in your first marriage with a couple biological children, the default laws (called “intestacy statutes”) may operate just fine for you.
However, if you don’t fit the mold, the intestacy laws will likely lead to undesirable outcomes. If you don’t have a spouse or kids, these laws will operate to distribute your stuff to your parents, siblings and other relatives depending on who is surviving at the time of your death. It doesn’t matter if you are estranged from certain relatives, if they have addiction or gambling issues, if they are in a cult or if they sent you a Christmas card. If your sister is supposed to inherit all your stuff, your sister will inherit all your stuff even if you haven’t spoken to her in 20 years.
If you are unmarried and have a long-time partner, the intestacy laws consider your partner irrelevant. Further, intestacy laws heavily favor spouses. So, if you are married to someone who is not the parent of your children, your children may end up inheriting little to nothing.
So, estate planning is not just for people who are married with kids, and it can be even more important for people who do not have a “traditional” family.
OMG!! Estate Taxes!!!
Estate taxes are a favorite boogie man of the media and politicians (“death taxes,” if the pundit is really foaming at the mouth). I get it! It’s easy to characterize estate taxes as loathsome. But unless you are one of a very small percentage of people that is worth more than about FOURTEEN MILLION dollars, these are demons that can’t hurt you.
Estate taxes are taxes that are applied to the value of a person’s “taxable estate.” Your taxable estate is basically anything of value that you have any ownership or control over at the time of your death. But, here is the thing: estate taxes only hit the dollars that exceed the “estate tax exemption amount.” Right now, that exemption amount is about $13.99 Million for an individual and twenty-eight million dollars for a married couple. So, take a deep breath, check your account balances and if they are under fourteen million dollars, don’t sweat estate taxes.
That doesn’t mean there aren’t other types of taxes you need to consider, but estate taxes are likely not your number one problem. I’ve seen people get so worked up about avoiding estate taxes that they ignore other relevant tax considerations. I’ve also seen folks establish (and pay for) needlessly complicated estate plans to avoid estate taxes they were never going to pay in the first place.
I NEED to Avoid Probate at All Costs
Many of my clients come in wanting to do whatever it takes to avoid probate. I can certainly do that for you. But, I like to make sure it is in my clients’ best interests first.
Colorado is what is called a “uniform probate code” state. Our probate procedures are relatively simple. Most probates can be opened and closed without ever having to go before a judge or appear in court. When push comes to shove, it often costs more in legal fees to set up a revocable living trust to avoid probate than it would cost to do a simple probate.
There are certain instances when it may be in your best interest to set up a trust to avoid probate, (for example if you own property in another state) but I like to make sure that is in your best interest. I never want to up-sell a client on a trust they don’t really need!
Estate Planning is Only for Rich People
I have a surprising secret: some of the most vicious contested probates occur when someone with a modest estate doesn’t properly plan. Here’s the thing: when a wildly wealthy person dies, there is plenty to go around. There is plenty of money for the lawyers and there are plenty of assets to work with in negotiating a settlement. Everybody can walk away with a nice big piece of pie. But, for smaller estates, there is less to fight over.
And fight over it, they will. Have you ever had to break up a fight between your kids in the back seat of your car because one of them didn’t like the way the other one was looking at them? That is the energy probate litigation clients bring to court. Once the fight starts, people dig their heels in real quick. Believe me: unlike big corporate clients, clients with gripes about estate distributions are not rational economic actors.
But, proper planning is instrumental in avoiding conflict, disappointment and unmet expectations. An attorney can help you establish an estate plan that is tough to contest. So, if one of your relatives does decide they want to fight with your heirs after you are gone, they won’t get very far. If you have a valid, well-considered estate plan in place, the problem-relative will likely be told they don’t have a case. It’s the legal equivalent of telling a kid that wanted a bigger piece of cake “you get what you get, and you don’t throw a fit.”
Any valid, well-considered estate plan will be instrumental in stopping squabbles and litigation before it starts. And, I know most people would rather have their intended heirs get their money than have it end up going to a bunch of litigation attorneys.
Estate Planning is Going to Be Incredibly Expensive
Let me dispel this notion real quick. Estate plans should not cost thousands upon thousands of dollars. Here are some things that might cost more than an estate plan: a new hot water heater, your monthly daycare bill, a new set of snow tires, an Ikon season pass. Our fees are more reasonable than you might think. Seriously, give us a call at (303) 819-6415 and we can give you a good estimate of your total cost. We realize nobody likes surprise legal fees, so we will make sure you have a good idea of what you are getting into upfront.
Five Big Estate Planning Myths
I’m Not Married and I Don’t Have Kids, So I Don’t Need to Bother
In my experience, it’s often more important for folks that don’t fit into the “family values” mold to have an estate plan. The anti-DEI gestapo may try to cancel me for pointing this out, but our laws are written with a traditional, hetronormative family in mind. So, if you are in your first marriage with a couple biological children, the default laws (called “intestacy statutes”) may operate just fine for you.
However, if you don’t fit the mold, the intestacy laws will likely lead to undesirable outcomes. If you don’t have a spouse or kids, these laws will operate to distribute your stuff to your parents, siblings and other relatives depending on who is surviving at the time of your death. It doesn’t matter if you are estranged from certain relatives, if they have addiction or gambling issues, if they are in a cult or if they sent you a Christmas card. If your sister is supposed to inherit all your stuff, your sister will inherit all your stuff even if you haven’t spoken to her in 20 years.
If you are unmarried and have a long-time partner, the intestacy laws consider your partner irrelevant. Further, intestacy laws heavily favor spouses. So, if you are married to someone who is not the parent of your children, your children may end up inheriting little to nothing.
So, estate planning is not just for people who are married with kids, and it can be even more important for people who do not have a “traditional” family.
OMG!! Estate Taxes!!!
Estate taxes are a favorite boogie man of the media and politicians (“death taxes,” if the pundit is really foaming at the mouth). I get it! It’s easy to characterize estate taxes as loathsome. But unless you are one of a very small percentage of people that is worth more than about FOURTEEN MILLION dollars, these are demons that can’t hurt you.
Estate taxes are taxes that are applied to the value of a person’s “taxable estate.” Your taxable estate is basically anything of value that you have any ownership or control over at the time of your death. But, here is the thing: estate taxes only hit the dollars that exceed the “estate tax exemption amount.” Right now, that exemption amount is about $13.99 Million for an individual and twenty-eight million dollars for a married couple. So, take a deep breath, check your account balances and if they are under fourteen million dollars, don’t sweat estate taxes.
That doesn’t mean there aren’t other types of taxes you need to consider, but estate taxes are likely not your number one problem. I’ve seen people get so worked up about avoiding estate taxes that they ignore other relevant tax considerations. I’ve also seen folks establish (and pay for) needlessly complicated estate plans to avoid estate taxes they were never going to pay in the first place.
I NEED to Avoid Probate at All Costs
Many of my clients come in wanting to do whatever it takes to avoid probate. I can certainly do that for you. But, I like to make sure it is in my clients’ best interests first.
Colorado is what is called a “uniform probate code” state. Our probate procedures are relatively simple. Most probates can be opened and closed without ever having to go before a judge or appear in court. When push comes to shove, it often costs more in legal fees to set up a revocable living trust to avoid probate than it would cost to do a simple probate.
There are certain instances when it may be in your best interest to set up a trust to avoid probate, (for example if you own property in another state) but I like to make sure that is in your best interest. I never want to up-sell a client on a trust they don’t really need!
Estate Planning is Only for Rich People
I have a surprising secret: some of the most vicious contested probates occur when someone with a modest estate doesn’t properly plan. Here’s the thing: when a wildly wealthy person dies, there is plenty to go around. There is plenty of money for the lawyers and there are plenty of assets to work with in negotiating a settlement. Everybody can walk away with a nice big piece of pie. But, for smaller estates, there is less to fight over.
And fight over it, they will. Have you ever had to break up a fight between your kids in the back seat of your car because one of them didn’t like the way the other one was looking at them? That is the energy probate litigation clients bring to court. Once the fight starts, people dig their heels in real quick. Believe me: unlike big corporate clients, clients with gripes about estate distributions are not rational economic actors.
But, proper planning is instrumental in avoiding conflict, disappointment and unmet expectations. An attorney can help you establish an estate plan that is tough to contest. So, if one of your relatives does decide they want to fight with your heirs after you are gone, they won’t get very far. If you have a valid, well-considered estate plan in place, the problem-relative will likely be told they don’t have a case. It’s the legal equivalent of telling a kid that wanted a bigger piece of cake “you get what you get, and you don’t throw a fit.”
Any valid, well-considered estate plan will be instrumental in stopping squabbles and litigation before it starts. And, I know most people would rather have their intended heirs get their money than have it end up going to a bunch of litigation attorneys.
Estate Planning is Going to Be Incredibly Expensive
Let me dispel this notion real quick. Estate plans should not cost thousands upon thousands of dollars. Here are some things that might cost more than an estate plan: a new hot water heater, your monthly daycare bill, a new set of snow tires, an Ikon season pass. Our fees are more reasonable than you might think. Seriously, give us a call at (303) 819-6415 and we can give you a good estimate of your total cost. We realize nobody likes surprise legal fees, so we will make sure you have a good idea of what you are getting into upfront.