If you are a pre-retiree or retiree in Colorado, estate planning has likely crossed your mind.  Estate planning with the assistance of a Certified Estate Planner™ a CERTIFIED FINANCIAL PLANNER™ Professional, and an attorney, can minimize your tax burden and maximize the amount of money you leave to your loved ones.  

Let’s discuss ways to get your financial life balanced. Contact The Normandy Group today!

Retirement planning is not a DIY (do it yourself) project.  Leaning on a team of financial professionals for guidance through the entirety of the retirement and estate planning process can allow you to rest easy knowing you have done everything in your power to prepare your family’s finances for the future.

Estate Planning with Taxes in Mind

Currently, Colorado does not have an estate tax. However, the federal government may tax your estate, depending on the estate’s gross value. It may be beneficial to create a living trust, as opposed to a last will and testament to avoid paying certain estate taxes. An attorney that specializes in estate planning and/or your financial advisor can offer guidance as to the pros and cons of the different types of estate planning strategies.

There is an opportunity to decrease the estate tax with the gifting of money or assets during one’s lifetime to relatives, friends, charitable causes, etc.  In fact, an individual can gift up to $15,000 per year to an unlimited number of people without reducing the lifetime exemption of $11.58 million per individual for gift taxes or filing a gift tax return.  This is just one example of how a financial advisor can help you prepare your savings, assets, and investments to mitigate the end-of-life tax burden.

Have an Awareness of Probate

Probate is a legal procedure that distributes assets upon one’s death. Creating a will allows you to direct your assets to individuals of your choice.  However, if you do not have a will and pass away “intestate”, state law dictates which individuals receive your property.  The probate process ensures assets are provided to the right people and ensures the decedent’s creditors are paid as appropriate.  

Do not let the probate process determine which relatives receive your hard-earned assets.  Instead, prepare for your eventual passing by meeting with an attorney to create a will.

The Time to Create a Will is Now

The scope of retirement planning should extend to creating a will.  Wills are legal instruments that ensure property and assets are distributed as desired upon death.  Designate the beneficiaries as appropriate in your will, have an attorney draft your will and you will have set the stage for your hard-earned assets to be bequeathed exactly as you desire.  Your will designates beneficiaries, appoints guardians and conservators for your minor children and can ultimately provide you with invaluable peace of mind.

Is Your Property Correctly Titled?

Disposition of your property is not completely determined by your Will after you pass away.  If the property in question is held in joint tenancy, the Will does not play a role in its dispersal.  Rather, this property is passed on to the joint tenant who is still alive.  

Furthermore, life insurance proceeds, stocks/bonds that can be transferred on death, annuities and payable on death bank accounts are not dispersed based on will language.  Such assets are transmitted to beneficiaries as detailed on the form for designated beneficiaries of a particular asset.  

In other words, the creation of a will is only an important first step.  Your attorney can also play a vital role in assuring your property is titled properly and consistent with the wishes you expressed in your will.

Living Probate in the Context of Retirement Planning

Retirement and estate planning should prepare for a potential living probate.  Living probate refers to the court’s management and supervision of your estate should you become legally incapacitated.  Though no one wants to think of such a situation, it is important to ponder it simply because the body and the mind do not last forever.  With a living probate, the court will appoint a Conservator and a Guardian.  One person can serve in the capacity of both.  Generally, a Conservator manages financial matters and a Guardian is responsible for ensuring you have the proper medical care, clothing, shelter, sustenance, etc. 

Meet with your estate planning attorney to proactively designate an individual(s) to act as your Conservator and/or Guardian.  Typically, a Conservator will be nominated within a financial power of attorney and a Guardian will be nominated within a medical power of attorney.  That is why powers of attorney play an essential role of an effective estate plan.  

Further, it is important to establish these documents before you become incapacitated as there is no guarantee your incapacitation will prove temporary.  It is possible poor health, an accident or another unfortunate development will leave you permanently incapacitated throughout your life. Selecting qualified people who will accept and act in these roles is imperative.  They will be responsible for caring for you and ultimately ensuring your assets are distributed to beneficiaries without significant reductions due to mismanagement or neglect.

Start Planning for Your Retirement Today 

The moral of this story is to be proactive.  By working with a CERTIFIED FINANCIAL PLANNER™ Professional, a Certified Estate Planner™ and an estate planning attorney, you can lay the groundwork for an enjoyable retirement.  By developing a comprehensive financial plan that includes estate planning, you will have set the stage for financial success.

The CERTIFIED FINANCIAL PLANNER™ Professionals and Certified Estate Planners™ at The Normandy Group offer serious financial planning for today’s complex world.  By combining tax, financial, and estate planning strategies we can help you achieve your goals. Contact us today for a complimentary consultation.

Download our free Book “Ways & Means – Maximize the Value of Your Retirement Savings”: