Boulder Estate Planning Legal Blog

Estate Planning Strategies for Colorado High Net Worth Families

March 17, 2022 | by Braverman Law Group

Estate planning strategies greatly vary depending on many factors. These include family structure, health needs, and the amount of assets. Because of this, high net worth families have unique needs and strategies they must utilize in the estate planning process. For example, most of the intentions of high net worth families focus more on protecting assets for future generations, rather than accumulating more wealth. Below are some strategies for high-net-worth families to incorporate into their estate plan—along with why these strategies are beneficial in the short and long term.

Gifting Assets—Both to Family Members and Charities

High net worth individuals can benefit from gifting some of their assets, so they can limit their estate size. Why individuals may not seem the inherent benefits in decreasing the estate size, it reduces the estate and gift tax liability after they pass away. To reduce the estate size—while still having enough to pass along significant assets to loved ones—high net worth individuals can gift up to $15,000 per year without having to pay a tax. So, individuals can gift assets to loved ones, that they would otherwise gift them in their will later, to reduce their tax liability now.

Similarly, it is important for high-net-worth individuals to remember that they can gift up to $11.7 million over their lifetime without having to pay a gift tax. Because of this high tax exemption, this gifting option is the most optimal strategy to reduce the estate size and minimize tax liability.

How to Protect Digital Assets in a Colorado Estate Plan

February 22, 2022 | by Braverman Law Group

In today’s world, an estate plan must be more than just crafting a will. With technology at everyone’s fingertips, if an individual dies without disseminating their online accounts and passwords, most of the information within these accounts may be lost forever. While estate planning attorneys may have different recommendations for how to handle the protection of digital assets, this process does not need to be as stressful as it seems. Below are steps and advice for how to secure a loved one’s digital information and include it in the estate plan.

Share Account Information with Loved Ones via a Password Manager

It is understandable that individuals do not want to be sending other people their password information while they are alive, as the accounts are still being utilized. However, it is important that loved ones know this information, so when the person passes away, they can access it. This is especially critical for accounts like financing or bank accounts, or the password to the individual’s phone so loved ones can notify others about the person’s passing.

There is specific password manager software that families utilize that stores all account logins and other information they want securely hidden. While the software contains all of the login and password information for the individual’s accounts, they need only remember a single master password to set up the account and access these digital assets.

Choosing the Right Trustee for Coloradan High Net Worth Individuals

February 15, 2022 | by Braverman Law Group

Estate planning is a complex and complicated endeavor for many individuals. While the estate planning industry is constantly evolving, this process may be even more difficult for high-net-worth individuals. These individuals may have more considerations to take into account when planning their estate, including minimizing estate taxes, protecting their funds for heirs, and changing laws around estate law. Another important consideration for high-net-worth individuals is appointing the right person to manage their estate. Below are tips and answers to common questions to help Coloradans choose the right trustee or estate executor for them and their financial situation.

What Is a Trustee?

Many high net worth individuals have trusts in place—meant to financially benefit their loved ones in the future. By forming a trust, an individual, known as the trustor, gives another party, the trustee, the ability to hold assets for the benefit of another person, a beneficiary. Because the trustee holds and administers the assets in the trust, they are granted major responsibilities. This includes communicating with beneficiaries, paying taxes on the assets of the trust, and providing yearly financial statements.

In many cases, the trustor will write into the trust that the trustee is given leeway to make financial decisions regarding the trust, so long as it is in the best interests of the trust’s beneficiaries. This is a major obligation.

What is a Colorado Spousal Lifetime Access Trust?

January 31, 2022 | by Braverman Law Group

Married couples often wonder if there are specific ways to protect their assets that apply specifically to them. One of these lesser-known estate planning options is the creation of a spousal lifetime access trust (SLAT), which is utilized to transfer assets outside of the estate. Using a SLAT can protect assets from the federal estate tax but ensure the spouse will be able to benefit from the gift after the other spouse passes away. Below is information on SLATs, their purpose, and how to take advantage before the current exemption limit is lowered.

What Is SLAT and How Does it Work?

A SLAT is an irrevocable trust where one spouse places assets in a trust for the benefit of the other spouse. Because the trust is irrevocable, the action cannot be undone and the spouse who created the trust can no longer access the assets. However, this also means that the asset is considered removed from their estate and cannot count for estate tax purposes anymore. For married couples that have an estate of over $24.12 million, they will have to pay an estate tax after they have passed away. Utilizing a SLAT is one way to reduce the overall total of the estate and avoid the estate tax.

When Will the Exemption Limit Be Reduced?

The current provision that exempts married couples with estates over $24.12 million from paying the federal estate tax will be reduced in 2026. By creating—and funding—a SLAT prior to the exemption being lowered, the couple will be able to transfer up to $24.12 million into the SLAT without having to worry about tax implications. However, after the exclusion limit is reduced to $6 million in 2026, couples will be unable to transfer more than $6 million into a SLAT without having to pay taxes. However, married couples that take advantage of the current higher exemption will not be adversely affected when the limit is reduced in the future—meaning, there will be no impact on their already funded SLATS. Additionally, Congress has the ability to lower the exemption limit even sooner, so it is important for interested couples to begin the process of funding a SLAT as soon as possible.

How to Incorporate Your Valuables or a Collection into a Colorado Estate Plan

January 18, 2022 | by Braverman Law Group

Many people are passionate about collecting. Whether stamps, coins, or baseball cards, these collections hold both sentimental, and sometimes, monetary value too. Despite this, individuals may be unaware of how to incorporate these valuables into their estate plan—who will receive these prized belongings once they pass away and how to reduce tension in case multiple family members want the collection. Below are tips that Coloradans should incorporate into their estate plan, especially when thinking about family heirlooms or collections.

Decide Whether Items Will be Kept or Converted

Many antiques and collections have sentimental value. However, because of this, individuals may overestimate their monetary value. When crafting an estate plan, individuals should decide if they would like items to be sold after their death—and the money given to a loved one—or if the item should be kept and passed on to someone. Having an estate planning attorney work with an appraiser can help the client to decide whether it is worth it to sell the collection or not.

After making these choices, the individual must then be clear in their estate plan whether they want the item sold or not. Some estate planning attorneys will also recommend explaining the importance of the collection, so the person receiving the item will know its value, whether monetary or sentimental.

Colorado Estate Planning Year-End Checklist

December 31, 2021 | by Braverman Law Group

It’s that time of year again: As the snow moves in, another year is on its way out. Although you may find yourself busy with holiday gatherings and the multitude of outdoor activities that Colorado has to offer each winter, it is also an important time to check in on your estate plan.

Here are some of the main areas of estate planning to review in 2021.

Tax Exclusions

The unified tax credit allows people to transfer portions of their estate without incurring federal gift or estate taxes.

Why You Need to Update Your Colorado Will and Estate Plan

December 24, 2021 | by Braverman Law Group

Recent surveys show that fewer than half of all U.S. adults have a will, let alone a complete estate plan. While those in the minority may rest easier at night, they may still forget an important piece of effective estate planning.

Put simply; it is not enough to draft a will and be done with it. Instead, it is essential to review and update your estate plan at least every few years, as well as whenever you experience a major change in life circumstances.

Whether you have a simple will in place or a more comprehensive estate plan, such as planning documents for end-of-life medical care and documents pertaining to the care of your children should they become orphaned, there are several reasons why you should consider reviewing and updating your plan on a regular basis.

Colorado Estate Planning Year-End Checklist

December 10, 2021 | by Braverman Law Group

It’s that time of year again: As the snow moves in, another year is on its way out. Although you may find yourself busy with holiday gatherings and the multitude of outdoor activities that Colorado has to offer each winter, it is also an important time to check in on your estate plan.

Here are some of the main areas of estate planning to review in 2021.

Tax Exclusions

What the Tax Debate in Congress Means for Colorado Estate Planning

November 18, 2021 | by Braverman Law Group

Over the past several months, the U.S. Congress has been considering tax legislation that could drastically change the face of estate planning.

Versions of the Build Back Better bill have included provisions to trigger capital gains tax on a regular basis for assets held in trusts, upon death, and when making a gift. Congress also considered dramatically reducing the unified tax credit, which would have restricted the reach of grantor trusts as an estate-planning tool.

But the bill in its current form does not impact the estate tax system directly. Where does this leave Coloradans who have made changes to their estate plan in response to this legislation?

Estate Planning for Colorado Cryptocurreny Holders

October 24, 2021 | by Braverman Law Group

Digital assets have necessitated major changes to estate-planning techniques. Once just a small pocket of the market, the now trillion-dollar-plus crypto market has yielded significant wealth for many individuals and families. For these families, the need to safely secure, transfer, and gift this new type of asset is critically important. Evolving estate planning techniques can help families manage their digital assets effectively to ensure they are neither lost nor devalued as they pass to the next generation.

Protecting Crypto Assets from Loss and Theft

Estate planning can help crypto holders keep their digital assets safe and secure. Cryptocurrency can be purchased, sold, and used through the use of a private key, which is essentially a password known primarily to the owner of the digital currency. Because cryptocurrency can be accessed and manipulated through the use of a password, it is vulnerable to both loss and theft. A fiduciary can help crypto holders maintain their private key in a manner that is safer than storing it personally.