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.
The recent brouhaha over Donald Sterling, billionaire owner of the Los Angeles Clippers, may be of interest to Denver residents, especially those who follow basketball.
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.
Colorado residents who wish to preserve their legacy for generations to come may have concerns about the financial savvy of their designated heirs when it comes to asset management over time.
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.
The death of famous actor Paul Walker in November of last year was a tragedy that left fans of his movies devastated. While there are often many lessons that can be learned from tragedies such as this, an important but possibly overlooked lesson includes how the deceased person's estate is handled. It's safe to say that Walker had more assets than the average person in Colorado -- he was worth around $25 million including the real estate he owned, which was worth around $8.5 million. Nevertheless, the setup of Walker's estate may provide some insight and useful estate planning lessons to people with much fewer assets, especially with regards to trusts.
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.
The life of a new parent, while often rewarding, can also be incredibly hectic. Between feeding, changing and scheduling, every day that a new parent spends with their young children can be challenging and overwhelming. New parents in Colorado and all over the country may find it difficult just to get through each day, let alone planning for when their children are grown. However, young parents might find it beneficial to do some estate planning even when their children are very young. Creating a broad plan when the children are still young could prevent some confusion and turmoil should anything happen to one of their parents. Also, performing some estate administration could set some clear goals for the children that the family can help them achieve, as well as setting them on a positive trajectory.