The attorneys at Elkhorn Law give this presentation to community groups in the Estes Valley. It covers the points we discuss with nearly every estate planning client, and it is a good place to start if you are wondering whether your own plan needs attention.
1. Procrastination is usually the problem. The most common estate planning mistake is not having a plan at all. Do not delay in order to think through the “perfect” plan; a good estate plan which addresses your life and death today is enough, and it can be updated as your family and property change.
2. A good estate plan addresses both death and disability. A Will only speaks at death. If you become unable to manage your affairs during life, your family needs a financial Power of Attorney and a medical durable power of attorney to act for you without going to court.
3. A good estate plan considers every piece. In particular:
- a will, a will and Trust, and/or beneficiary designations;
- an advance directive (i.e., a “living will”);
- financial and medical durable powers of attorney;
- instructions for burial or cremation and services;
- beneficiary deeds or life estates for real property; and
- the transfer of any business interests.
4. The planning process has five steps: 1) identify the nature and types of property you own; 2) consider your roles and responsibilities in life and balance them with your interests; 3) choose the documents you need; 4) consider the tax consequences with your CPA or financial advisor; and 5) sign the documents properly, with the witnesses and notary which Colorado law requires.
5. Review any marital agreement. If you have a Prenuptial Agreement or Postnuptial Agreement, it should be reviewed to confirm that all of the required supporting information is present and that it still serves the best interests of both spouses. The agreement and the estate plan should say the same thing.
6. Business documents usually control over your will. For closely held corporations and LLCs, the ownership and transfer provisions in the company’s governing documents usually prevail over the terms of your will. See Business Formation and Family Cabin LLC.
7. Beneficiary designations control over your will. Beneficiary designations on life insurance, retirement plans and annuities, and payable-on-death designations on bank accounts, prevail over the terms of a will. A change of registration (e.g., adding a payable-on-death beneficiary) is a different thing from a transfer of ownership (e.g., adding a joint owner), and the difference matters. See Avoiding Probate.
8. The transfer tax system is different from the income tax system. Property that passes at death generally receives a “step-up” in income tax basis to its value at the date of death, which can eliminate the capital gains tax your beneficiaries would otherwise pay on a later sale. Tax-deferred accounts (e.g., IRAs, 401(k)s and annuities) do not receive a step-up, and the SECURE Acts of 2019 and 2022 changed how quickly most beneficiaries must withdraw from inherited retirement accounts. Your beneficiary designations on those accounts deserve as much thought as your will.
9. Most estates will not owe federal estate tax. For 2026, the federal estate and gift tax exemption is $15 million per person, and the annual gift tax exclusion is $19,000 per recipient. A surviving spouse can preserve the deceased spouse’s unused exemption (“portability”), but only by filing a federal estate tax return (Form 706), even where no tax is owed.
10. A valid will saves money and time. On average, the cost of probate in money and time is much less when a person dies with a valid will than when they die without one. See Probating a Will and Probate Without a Will.
This page is general information, not legal advice. Each person’s circumstances call for advice from their own attorney, CPA and financial advisor before completing an estate plan.