Colorado Estate Planning Considerations
Colorado is a Common Law State, which means the rules governing the ownership, division, and inheritance of income and property acquired by a husband or wife during their marriage hold that subject to various qualifications, each spouse owns and has complete control over their own her income and property.
Last Will and Testament and Trusts
The minimum age of a person competent to make a will is 18. The number of witnesses necessary to execute a will is two.
The original custodial gift may be a life insurance policy or annuity contract.
Custodial property may be invested in or used to pay premiums on (1) a policy on the minor’s life if the minor’s estate is the sole beneficiary, or (2) a policy on a third party in whom the child has an insurable interest if the minor or the custodian is the irrevocable beneficiary.
The custodial arrangement terminates when:
- The minor child reaches age 21, or
- The minor child dies.
Dying without a Last Will, the Colorado laws of Intestacy.
The estate goes to the surviving spouse, as follows:
- If there are no surviving descendants or parents – 100% of the estate
- If all descendants are also descendants of the spouse and the spouse has no other descendants, —100%
- If there are a surviving parent(s) but no surviving descendants—$300,000 (base amount, indexed) plus 75% of the balance of the estate
- If all descendants are also descendants of the spouse and the spouse has at least one descendant who is not a descendant of the decedent—$225,000 (base amount, indexed) plus 50% of the balance of the estate.
- If at least one descendant is not also a descendant of the spouse—$150,000 (base amount, indexed) plus 50% of the balance of the estate
- If two or more of the above apply, the rule yielding the most considerable amount to the surviving spouse governs.
- The dollar amounts noted above are adjusted based on the cost of living.
If there is no surviving spouse, or if a portion of the estate does not go to the spouse:
- 100% (or applicable portion) to descendants, per capita at each generation (see CRS §15‐11‐106)
If there is no surviving spouse or descendant:
- 100% to the surviving parent or parents equally
If there is no surviving spouse, descendant, or parent:
- 100% to descendants of parents, per capita at each generation
If none of the above:
- Intestacy laws outline further distribution steps to the level of grandparents and related individuals. See CRS §15‐11‐102.5(5), (6).
- If no legally described recipient can be found, estate assets go to the state of Colorado.
Death With Dignity
Colorado voted to approve Prop 106, which authorizes the medical practice of aid in dying. To be eligible a person must be 18 years old, mentally capable, in the final stages of a terminal illness defined as six months or less to live, and must request and take the medicine by themselves (self-administer).
Colorado follows the Revised Uniform Fiduciary Access to Digital Assets Act to ensure that testators can retain control of their digital property and plan for its ultimate disposition.
- Colorado does not impose an inheritance tax.
- Colorado imposes an estate tax equal to the maximum credit allowed under IRC Sec. 2011 for paid state estate and inheritance taxes. However, the current federal tax code does not permit a credit for paid state estate or inheritance taxes. Therefore, there is no credit estate tax in effect at this time.
- Colorado imposes a GST tax equal to the maximum credit allowed under IRC Sec. 2604 for paid state GST tax. However, the current federal tax code does not permit a credit for paid state GST tax. Therefore, there is no current GST tax.
- Colorado does not impose a gift tax.