What Is Estate Planning? Essential Steps for Securing Your Legacy

A 2024 survey found that almost 70% of Americans consider estate planning important. Despite this, only about 25% of people in the U.S. have gone through the estate planning process. Changing this sobering statistic begins with the all-important question: What is estate planning?

If you’ve already put plans for your estate in place, you’re in a better position to rest on your laurels. You can enjoy the peace of mind that comes with this and live your life without worrying about the security of your legacy.
You may be scratching your head over whether or not to draw up an estate plan. If so, read on to learn about all the relevant steps so you can start addressing them one by one.

What Is Estate Planning?

Before we begin breaking down the steps you’ll go through during estate planning, it’s vital to understand the general concept. Estate planning is a legal process that involves making the proper preparations in advance of your death to ensure your money, real estate, retirement accounts, and other assets are left to the right heirs and beneficiaries.

More often than not, those taking part in the estate planning process will have a legal expert leading the way. An estate planning attorney in Denver can lend a hand as you aim to put together estate plans for yourself or a loved one.

During estate planning, you’ll generate a list of your assets, review your debts, and review any tax obligations you might need to consider. Thankfully, Colorado doesn’t have an estate or inheritance tax. However, there is a federal estate tax that might need to appear on your radar, depending on the value of your estate.

When Should Estate Planning Take Place?

Recent surveys suggest that about two-thirds of Americans over 70 have created wills during the estate planning process. The latest statistics on estate planning might lead you to believe that only those who have hit retirement age need estate planning. However, this couldn’t be further from the truth.

In reality, everyone can (and should) strongly consider coming up with a will and taking other steps that involve estate planning. Even if you’re only in your 50s, 40s, 30s, or 20s, you shouldn’t let age stop you from creating estate plans.
Some Americans use big life events like the birth of a child to take a more serious approach to estate planning. Others have health scares that show them they shouldn’t move forward without assigning a medical power of attorney. Your reason for starting estate planning will be as individual as you are.

What Are the Essential Steps for Estate Planning?

In most cases, estate planning takes at least a few weeks and sometimes several months. You’ll need to follow proper protocol to complete this process and secure a legal document outlining your final wishes to ensure they will be carried out faithfully.

These are the steps you’ll take as you navigate your way through estate planning with assistance from a trusted lawyer:

Create a will.
Consider creating a trust.
Assign a power of attorney.
Choose a guardian for minor children.
Think about taking out a life insurance policy.
Address any tax-related responsibilities.
Pick a personal representative for your estate.

An experienced estate planning lawyer in Denver can walk you through these steps and explain the importance of each. They can also answer any questions you might have, ranging from basic inquiries like “What is estate planning?” to more complex ones like “What should I include in my will?”

Can Estate Plans Change?

Americans delay doing estate planning for a variety of reasons. Some do it because they don’t want to devote any time to thinking about death. Others do it because they think they’re not old enough or don’t believe they have enough assets to require a will.

Still, others bypass estate planning because they assume it isn’t worth doing it now, as many aspects of their lives will likely change in the coming years. However, this isn’t a valid excuse since there’s no reason you can’t adapt your estate planning accordingly as you grow older.

An estate planning lawyer in Colorado will often advise you to start the estate planning process while you’re still young and then make adjustments to it every three to five years. You can add future children to an estate plan or remove an ex-spouse from a will without encountering any issues. You can also alter your estate plans as the value of your assets increases.

Why Is Estate Planning Important?

Still not sold on setting aside time to go through the estate planning process? You’ll miss out on all the benefits of estate planning if you choose not to begin this process. In this case, it helps to think long-term.

Here are some of the reasons estate planning is important:
Provides financial protection for your children and immediate family members
Stops family squabbles from breaking out over estate-related disagreements
Prevents your family from having to endure a lengthy probate process in Colorado
Protects your assets from creditors and anyone else who might file lawsuits against you
Lowers your tax obligations in certain cases

But above all else, the top reason to do estate planning might just be that it enables you to enjoy the later years of
your life without being concerned about what will happen to your assets when you aren’t around anymore. You can’t put a
price tag on this kind of peace of mind.

Ready To Create an Estate Plan? Call Us for Help

Are you preparing to secure your legacy by taking the essential estate planning steps listed here? TNS Associates, P.C., can help bring your estate plans to life. We can also talk to you more about estate planning tools like irrevocable trusts that could come in handy and even answer key questions like “What is estate planning?” to help put your mind at ease.