Death & Inheritance in Colorado

The Will determines home lending practices and what happens with debt and inheritances when a spouse dies. In a community property state or if the couple are joint tenants with rights of survivorship, you automatically inherit the home, even if it is not the choice of the deceased spouse. In community property states, the living spouse automatically inherits everything you acquired during marriage. Other states say that the living spouse or children have a right to one-quarter or one-half of the estate, no matter what the Will says. In most cases, married couples own their homes entirely, so if one spouse dies, the other automatically inherits the estate without having to go to court. In a community property state, the debt required in marriage is now the full responsibility of the living spouse, even if the account was in his or her name only.

If you want your children to inherit the house after you die, put it in the Will but do not put them on the title now. Depending on the state, the child could force the sale of your house just to gain his or her own share while you are still alive. Also, if you want to sell or refinance, you will need to have agreement of the child as well. If the child tries to sell the house after you die, they potentially will have to pay a large amount on capital gains sale tax. The taxes would be much lower for them if they inherit. Finally, a dishonest child would be able to cash the equity of the house without your knowledge.

Putting your house in a living trust or Will allows you to avoid having to go through probate. This allows you to refinance, sell, or live in the house while you are alive, then passes the house on for inheritance after you die. Home lending practices suggest that if you don't have a Will -- get one!

Saving for retirement
To find out how much you need in your retirement savings, use one of the calculators at http://www.choosetosave.org. The longer you wait to retire, the longer you will save, and the more you will have in savings and equity in your home.

Long term insurance
If you are no longer living at home, think about purchasing a long-term care insurance plan to protect your assets. You can learn about long-term care from a home lending practice or at the American Association of Retired Persons (AARP) Web site, http://research.aarp.org.

Buying a retirement home
When your children have all left the house, you may want to move into a smaller home or a retirement community. If you have lived in your home for over two years, the first $250,000 for singles and $500,000 for couples of the profit from your home is tax free. Instead of putting that money into your retirement home, you may consider setting it aside for emergencies and using a mortgage to purchase your next home from a home lending practice.

House rich, cash poor
A reverse mortgage from one of the home lending practices pays you something from the equity of the home each month. This allows you to stay in your home during retirement while giving you the monthly income you may need.

Get a Will
Your Will is a blessing for your family after you pass on. All your desires and inheritances written down on paper will save the family from guessing what you wanted and eliminate any difficult, stressful or contentious situations. Put your assets into a living trust that will pass on automatically to your heirs for inheritance.