On this blog, we often examine topics regarding people’s estates. We explore estate planning strategies and explain estate administration tasks. However, without a solid understanding of what your estate is in the first place, you may not know what you have or why you must protect it.
In this post, we will discuss what comprises your estate as well as what happens to it upon death.
Assessing your estate
Defined broadly, an estate is everything you own that is worth money. Components of an estate can be tangible or intangible; the value may stay the same, or it can fluctuate frequently; the elements can change in the span of a single transaction.
More specifically, pieces of your estate can include:
- The money you have in the bank
- Homes you own
- Cars you own
- Land you own
- Personal property
- Valuable collections of art, coins, toys, etc.
- Retirement accounts
- Insurance policies
- Business interests
- Tenant-in-common property
- Intellectual property, including copyrights, trademarks and patents
- Digital property, including cryptocurrency and online stores
When you pass away, these items and any other property you have will need to be distributed.
Take steps to protect what you have
Once you know everything that is part of your estate, the importance of protecting it and distributing it per your wishes should become clear.
If you suddenly pass away and have not made a plan for what you want to happen with your property, the courts will decide how to pass everything on. In Colorado, intestacy laws are in place for distributing property for people who do not have a will.
Per these laws, your property will transfer to heirs in a specific order, depending on surviving parties. The courts could divide the estate among your spouse and children; it could all go to your parents or siblings; or in some cases to a distant heir.
However, you can preserve the assets and direct them to designated parties by creating a will or utilizing planning tools like trusts. These measures enable you to decide what happens to your property and minimize financial penalties and expenses.