Protecting Your Assets in Colorado: Essential Estate Planning Steps

Create a comprehensive list of all your assets including bank accounts, investment accounts, retirement accounts, real estate, vehicles, valuable personal property, digital assets, and business interests. Include account numbers, locations, and approximate values. Store this document securely and inform your trusted representatives where to find it. Update this inventory annually or whenever you acquire or dispose of significant assets.

In Colorado, a valid will must be in writing and signed by you (the testator) and two witnesses. Colorado recognizes holographic (handwritten) wills if they are signed and the material portions are in your handwriting. Your will should name an executor, guardians for minor children, and specify how your assets should be distributed. Colorado is not a community property state, so you have more flexibility in how you distribute assets, but surviving spouses have rights to claim a portion of the estate regardless of what the will states.

A living trust can help your assets avoid probate in Colorado. The Colorado probate process is relatively streamlined compared to other states, but a trust can still save time and money. Assets in a trust pass directly to beneficiaries without court involvement. Colorado recognizes both revocable and irrevocable trusts. Consider which type is appropriate based on your asset protection and tax planning needs. A revocable trust offers flexibility but less asset protection, while an irrevocable trust offers stronger protection but less control.

This document allows someone to manage your financial affairs if you become incapacitated. In Colorado, powers of attorney are durable by default, meaning they remain in effect during incapacity unless specified otherwise. Colorado follows the Uniform Power of Attorney Act. You can make the power effective immediately or only upon incapacity ('springing'). Consider carefully who to appoint, as this person will have significant control over your finances.

This document appoints someone to make medical decisions for you if you cannot. In Colorado, this is sometimes called a Medical Durable Power of Attorney. There is no statutory form, but many hospitals and healthcare providers have their own forms. The document should clearly state your agent's authority and any limitations. Consider appointing alternate agents in case your first choice is unavailable.

In Colorado, this is officially called a 'Declaration as to Medical or Surgical Treatment' and allows you to specify your wishes regarding life-sustaining procedures if you have a terminal condition or are in a persistent vegetative state. Colorado law (§ 15-18-101 to 113) provides specific requirements for this document. It must be signed by you and two witnesses who are not healthcare providers, potential heirs, or the appointed agent.

This document allows healthcare providers to share your medical information with designated individuals. This is particularly important because even your healthcare agent may not have access to your medical records without this authorization. The form should comply with federal HIPAA regulations and should name all individuals who may need access to your medical information.

Many assets pass outside of probate through beneficiary designations, including life insurance, retirement accounts, and transfer-on-death accounts. Review and update all beneficiary designations to ensure they align with your overall estate plan. Colorado law recognizes these designations as overriding provisions in your will, so it's crucial they are current and consistent with your wishes.

Colorado offers three types of probate: small estate affidavit (for estates under $70,000 with no real property), informal probate (for uncontested cases), and formal probate (for contested cases or complex situations). Understanding these options can help you structure your estate to minimize probate complexity for your heirs. Colorado's probate code is found in Title 15 of the Colorado Revised Statutes.

How your real estate is titled affects how it passes at death. Colorado recognizes joint tenancy with right of survivorship, which allows property to pass automatically to the surviving owner. For married couples, property can be held as tenants in the entirety in some states, but Colorado does not recognize this form of ownership. Consider whether joint tenancy, tenancy in common, or transfer on death deeds (allowed in Colorado since 2019) best suit your needs.

Colorado has specific exemptions that protect certain assets from creditors, including homestead protection (up to $75,000 or $105,000 for elderly or disabled homeowners), retirement accounts, and life insurance proceeds. Understanding these protections can help you structure your assets optimally. Consider whether additional strategies like certain types of trusts might be beneficial based on your specific situation.

Store original documents in a secure location such as a fireproof safe or safety deposit box. In Colorado, you can file your will with the district court for safekeeping for a small fee, though this is optional. Provide copies to your executor, healthcare agent, and attorney. Inform these individuals where to find original documents and any access information needed (such as safe combinations or keys).

Estate plans should be reviewed every 3-5 years or after major life events (marriage, divorce, births, deaths, significant changes in assets). Colorado law may also change, affecting your planning. Set calendar reminders to review your documents periodically. Consider scheduling a review with an estate planning attorney to ensure your documents remain compliant with current Colorado law.