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Is estate planning really necessary?

On Behalf of | Jul 25, 2019 | Estate Planning

Is estate planning really necessary?  Some individuals may feel that they are not wealthy enough to actually need an estate plan. To be honest, estate planning takes time and money that some Colorado residents may feel can best be spent elsewhere.

First of all, an estate plan makes sure that the individual’s loves ones, and assets, are taken care of if he or she dies, or becomes incapacitated. This can be essential if the individual has minor children as the estate plan can establish the parent’s wishes as to who should become responsible for the children. Additionally, the estate plan can also provide the means to care for these children.

The first step in establishing an estate plan is to determine the individual’s net worth. This can be accomplished by analyzing the individual’s assets, including personal property, real estate holdings, retirement accounts, investment accounts and other such accounts. Then, any liabilities for which the individual is responsible should be subtracted from the assets. This should provide an indication of the individual’s net worth. Additionally, it should provide a list of items that will need to be addressed if the individual dies or becomes incapacitated.

Once the foundation for estate planning is set, the Colorado resident will need to determine if a will, trust, combination of the two and/or other estate planning tool is the appropriate choice. This decision will be based upon the individual’s circumstances. Experienced legal counsel can assist in determining the appropriate tools and how to best structure the overall estate plan to meet the individual’s goals.