Three Simple Reasons to Make Your Will

It is easy to put off writing your will. One recent study suggested that two-thirds of us have not written our will. Ben Franklin’s famous quote ”In this world nothing can be said to be certain, except death and taxes” seems apropos. If you die without a valid will the State of Colorado decides what people will get your estate. These people are called your heirs and they will be your blood relatives or legal spouse. If an heir cannot be located then the share is paid to the State. This one-size-fits-all approach might be fine for some people, but remember it comes only in one size! If you want your estate to go to an unmarried partner or fried, or if you have charitable intentions the one-size approach will not work.

Consider a recent case I handled. Mary and Mike (not their real names) had lived together for over ten years, but they somehow had never bothered to marry or make a will. Their home was in Mike’s name and Mike had substantial funds in his business. Mike had a daughter from his first marriage, but they were not close at all. Mike died suddenly and unexpectedly, in his early 50s, of a heart attack. Within ten days, the daughter and a paralegal were knocking at Mary’s door to rummage through the home and records and to politely ask Mary when she would be moving out. There was little Mary could do. She was not an heir or a spouse and Mike did not have a will in place. Mike could have written a will that left everything to Mary or split his estate between Mary and his daughter. One thing was certain; the way things turned out certainly would not have been Mike’s wish.

In your will, you can also nominate a person or bank to act as the ”executor” (called a personal representative in Colorado). Without a will, the State of Colorado again decides who will be in charge of your estate. When you nominate a personal representative you get to pick the person who is best suited to wind up your affairs. The on-size-fits-all approach applied by the State may put the wrong person in charge of your estate. For instance, if you are divorced and have children who are minors, your ex-spouse may well end up in control of your estate.

Dying without a will precludes you from employing a number of relatively easy tax planning devises to save on federal estate taxes. People with somewhat larger estates, and remember that the Internal Revenue Services includes the value of pension, retirement plans and life insurance in calculating the taxable estate, can ultimately save a significant amount in estate taxes.

Consider a married couple with two grown children. They decide they don’t need a will as everything they have is payable to the other spouse at the death of the first spouse. The state of Colorado says that what is left after the second dies will go equally to the two children. This couple may have made a $900,000 mistake and enriched the U.S. Treasury by the same amount. A will with tax planning could easily avoid this problem.

In short, making a will is not something to put off. The consequences may be dire. This is not the time to take shortcuts to save money. Now is the time to evaluate your property and to think about who you want to benefit after you are gone.

Contact an experienced estate planning attorney that knows Colorado Estate and Tax law. Since 1980, Steven R. Warden has represented clients with respect, dignity and courtesy when dealing with their estate planning and probate needs.