There are five primary documents that may be applicable to each Colorado Estate Plan. Accordingly, it is important to be familiar with these five primary documents and understand how each may apply to your circumstances.

No matter how much wealth one may have accumulated, everybody of all ages needs to plan for the following:

1. Incapacity;
2. Death; and
3. Children

The five primary estate planning documents helps individuals to plan for these three areas while they also help to avoid costly and time consuming court proceedings, provide greater control over who gets what and when, and offer tax and asset protection.

1. Colorado Revocable Living Trust

A Colorado Living Trust has become a growing alternative to the traditional Colorado Last Will and Testament (“Colorado Will”) as a way to pass property on when one dies due to its flexibility and tremendous benefits while one is both alive and upon his or her passing.

In addition to providing for the disposition of one’s property, like a Colorado Will, a Colorado Living Trust also provides the following benefits:

• Allows smooth transition of management upon incapacitation and death;
• Provides care of disabled and handicapped children and grandchildren;
• Can avoid Colorado probate proceedings and any other state you may own real property;
• Can reduce settlement expenses in comparison to a probate proceeding involving Colorado Wills;
• For married couples, minimizes and potentially eliminates estate taxes;
• For beneficiaries, a Colorado Living Trust can keep assets out of their own estates which can further limit estate taxes; and
• Offers asset protection instead of distributing the assets outright.

2. Colorado Will

A Colorado Last Will and Testament (“Colorado Will”) is part of the estate plan that addresses three primary matters. First, for assets titled in one’s name, it controls where those assets are to be transferred after one’s passing. Second, it designates who will handle the administration of one’s estate. In Colorado, that individual is referred to as the Personal Representative. Finally, if one has minor or special needs children, Colorado Wills can designate their legal guardian and/or conservator.

It is important to note that a Colorado Will is not a private document. Within 10 days after one’s passing, Colorado law requires Colorado Wills to be “lodged” in the county district court where the individual lived. Upon opening a probate proceeding in court, it becomes a matter of public record.

3. Colorado Durable General Power of Attorney

A Colorado Power of Attorney is an inexpensive yet very flexible document used to grant another the power to handle one’s financial and legal affairs. In general, the agent has authority to do whatever the principal may do — withdraw funds from bank accounts, enter into contracts, trade stock, pay bills, cash checks — except as expressly limited in the power of attorney document. When transacting business on behalf of the Principal, the Agent must use the Principal’s finances as the Principal would use them for the Principal’s own benefit.

Without a Colorado Power of Attorney in place at the time of one’s incapacity or unavailability, a legal proceeding would need to be started to have one appointed as the Conservator to handle the exact same matters as an Agent appointed in a Colorado Power of Attorney document. In essence, a Colorado Power of Attorney helps maintain family harmony by avoiding the expense of litigation and understanding the wishes of the Principal, in advance.

4. Colorado Medical Power of Attorney

A Colorado Medical Power of Attorney (also known as a Colorado Health Care Power of Attorney) is a legal document that enables an individual to appoint another person or an organization to act on one’s behalf to manage his or her medical affairs if the Principal is unable to do so.

Without a Colorado Medical Power of Attorney in place at the time of one’s incapacity or incompetence, a legal and public proceeding may be required to have one appointed as the Guardian to handle the exact same matters as an Agent appointed in a Colorado Medical Power of Attorney document. In essence, a Colorado Medical Power of Attorney helps maintain family harmony by avoiding the expense of litigation and understanding the wishes of the Principal, in advance.

5. Colorado Living Will

A Colorado Living Will is a legal document that allows one to state, unilaterally and in advance, whether he or she desires to forego artificial life support in the event he or she is in a terminal condition. Even if one decides to reject life sustaining treatment, medical professionals will continue to provide one with all necessary treatment for the purpose of alleviating pain and suffering. In addition to refusing life sustaining medical treatment, a Colorado Living Will permits one to decide in advance whether he or she wishes to have “food” and “water” provided intravenously if he or she is unable to take food and water orally.

In Colorado, a Living Will comes into effect when two conditions are met: (1) two physicians are in agreement the patient has a terminal condition and (2) the patient has been unconscious and unable to communicate for a period of at least seven (7) consecutive days.