The old saying goes that there are two inevitabilities in life -- death and taxes. In many states, death triggers yet another tax for the survivors of the deceased.
Unfortunately, young people in Colorado and other states, often ignore estate planning. Maybe that is because most young people are just in the highlight, or beginning, of building an estate. But young or old, if you have established any assets at all, you should consider the possibility that something could happen to you.
A new year is an excellent time for Colorado residents to take stock of their estate plans. Changes in federal tax laws can be evaluated to determine the potential impact on one's heirs. Additionally, this is an important time to make adjustments related to major life events that have occurred recently. In 2014, the federal government received nearly $13 billion in estate taxes, making closer scrutiny of one's plans a priority.
In the state of Colorado, a person's will dictates what they want to happen to their assets or estate when they die. This legal document, which can be enforced by the court, assists family members with the division of any property, family items or financial assets.
When it comes to windfalls of any kind, Uncle Sam usually has his hand out. But there are ways for Colorado residents to limit the taxes that heirs have to pay on any legacies they receive.
When parents die, their adult children not only must deal with their grief, but also tend to the practicalities of arranging their funerals and handling matters of their estates. Some Denver residents may be shocked to learn that one or both parents died heavily indebted.
Colorado residents with large estates may have questions about the $5 million federal estate tax exclusion and how it affects them. Because it doesn't affect the majority of residents, few may have even heard of it.
Too many people put off the task of estate planning out of fear of confronting their own mortality or simply because they are too busy with life's day to day activities. But doing so is short-sighted in the long run and can only cause problems for your loved ones when you have passed on.
Nobody likes to dwell on their own mortality, but some issues need to be addressed before health declines or the mind begins to fail. Some of those issues affecting Colorado residents of any age include planning for the distribution of assets after death.
In 2011, Congress introduced a tentative tax planning device that eventually became a permanent part of the tax code due to an act passed in 2012. Dubbed "portability" by tax agents, the new law could provide for some big tax savings if correctly implemented in an estate plan.