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Colorado Estate Planning Blog

Monday, July 11, 2016

Common Estate Planning Mistake #2 – Thinking Your Finances are Too Simple for an Estate Plan

Many people assume that their financial or family situation is so straightforward that they don’t need to draft formal documents, like a will. Sometimes they assume that establishing joint tenancy (sharing ownership in personal property, such as a home) or joint ownership over financial accounts is enough to protect their assets.

The reality is that no one’s life is as simple as it seems—and even if it is, you should still consider putting protections in place to help ensure that your wishes are known.

Here is an example of how something that seems simple can go wrong.  A widow adds the name of her adult daughter as a joint account holder, so that both of them have the authority to sign checks in order to pay bills. At the mother’s death, the assets in the bank account will pass directly to her daughter, but her other children would not inherit that account. Or, what if the daughter may actually have financial woes? If she is a joint owner on her mother’s account or on her home, these assets would be subject to her daughter’s debts and creditors. Neither scenario may be the mom’s original intention.

For those with young kids, someone needs to be named as the guardian of the children and someone needs to be named to control the kids’ money they inherit should you pass away sooner than expected.

Neither of these situations typically involves complicated finances—it’s simply about being clear how you want your assets handled.




Sommers Law Group, LLC assists clients throughout Denver, Jefferson County, and Arapahoe County, Colorado.



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