Estate planning is an important step in securing the future of your assets, and your wishes upon your passing. Among the various tools available for estate planning, the “contract to will” approach is sometimes considered. Therefore, understanding its implications, including statutes such as C.R.S.§ 15-11-514, sheds light on why this method is not always the most desirable.

Understanding the Approach

A contract to will, often termed a “mutual will,” is an agreement between individuals. These individuals are commonly spouses, and the document outlines how their assets will be distributed upon both of their deaths. This method is binding and typically prevents either party from changing the will without the other’s consent.

The Case for Contracts to Will

1. Security and Joint Decision-Making: offers a sense of security as both parties agree on how assets will be distributed, ensuring joint decision-making.
2. Preservation of Intended Distribution: ensures assets are distributed as agreed upon, preventing changes that might deviate from the joint wishes.

The Limitations of a Contract to Will

1. Inflexibility in Changing Circumstances: Once established, this type of contract is rigid and challenging to modify, even if circumstances change significantly.
2. Surviving Party’s Limitation: Also, after one party’s passing, the surviving individual is bound by the terms of the contract. This restricts their ability to adjust the distribution based on their evolving needs or relationships.
3. Potential Legal Complexities: Creating and enforcing a contract to will can involve legal intricacies. This comes along with potential disputes among beneficiaries or surviving family members.

Considering Alternative Approaches

Given the limitations of a contract to will; exploring alternative estate planning tools might offer more flexibility and better meet individual needs:

1. Revocable Living Trust: Unlike a contract to will, a revocable living trust allows flexibility in managing and modifying assets.
2. Updated Individual Wills: Opting for individual wills permits greater adaptability to changing circumstances while maintaining control over the distribution of assets.
3. Clear Communication and Documentation: Regardless of the chosen estate planning method; clear communication among beneficiaries and proper documentation of intentions remain crucial in minimizing conflicts.

Conclusion

While a contract to will might seem appealing due to the sense of joint decision-making and preservation of intended distributions. Moreover, its inflexibility to changing circumstances and potential legal complexities make it less desirable compared to other estate planning options.