"I am so relieved that I finally completed my estate planning and signed the documents!"

My clients often tell me that they intended to get their estate plan done sooner, but . . .

  • . . . they thought they were too busy
  • . . . they thought they did not have enough assets
  • . . . they could not decide who should get their assets
  • . . . they did not know what to do or where to get help
  • . . . they did not want to think about their mortality or possible incapacity
  • . . . they did not realize that paying for a properly prepared estate plan now will likely save their successors money later
  • Please don't wait to complete your estate plan.

1. "What is an estate plan?"

A. Your estate plan consists of all the tools by which you communicate your directions and wishes if you become incapacitated or die.

B. The core elements are:

  • Will and personal property memorandum
  • Financial power of attorney
  • Medical power of attorney
  • Declaration as to medical and surgical treatment (“living will”)

C. These documents may also be part of your estate plan:

  • Beneficiary and payable-on-death designations on accounts, life insurance, etc.
  • Deeds showing joint ownership of property
  • Appointment of guardian for minor children
  • Marital or domestic partnership agreement
  • Business and real estate agreements
  • A separate revocable trust ("living trust") or irrevocable trust

2. “What is a will?”

A. Your will is a written document in which you direct:

  • Who is to gather and distribute the assets that can be handled by the will
  • Who should receive specific gifts of money or other property
  • Which charities you wish to benefit
  • How you want the rest of your probate assets to be distributed
  • In other words, the “who, what, where, when, why, and how” of your estate

B. A properly prepared will helps you and your successors by:

  • Appointing the personal representative and alternates
  • Giving specific directions to the personal representative
  • Reducing potential disagreements among beneficiaries
  • Focusing attention on what matters to you

C. Keep in mind:

  • Your will can and should be amended as your circumstances or wishes change
  • You must have legal capacity to sign a will or an amendment ("codicil")
  • Your will does not become effective until you die
  • If you die without a will, a probate proceeding and court hearing are usually required, and your assets will be distributed only to your nearest living relatives as determined by state law

3. “Can I write my own will?”

  • Maybe, but . . . 
  • . . . you may find that this is trickier than it sounds
  • If your document is ambiguous, vague, or incomplete, your successors may need expensive court hearings to resolve the issues
  • Handwritten wills (“holographic wills”) are recognized in Colorado but not in some other states

4. “Is it all right to use forms or advice I find on the internet?”

  • Maybe, but . . . 
  • . . . legal forms are merely templates - they are not magic
  • Does the form use understandable, modern language?
  • Does the form actually suit your circumstances?
  • Does the form give adequate instructions to your personal representative?
  • Is the form or information of high quality and accurate?
  • Does the form or information conform to current Colorado law?
  • If you are not sure, please seek personalized advice from an experienced estate planning attorney

5. “Does a will control my entire estate?”

A. “Nonprobate” assets are controlled not by your will but instead by your beneficiary designation, deed, or other contractual arrangement.

B. Be sure you review these items with your estate planning attorney:

  • Beneficiary designations on investment accounts, retirement accounts, insurance policies, annuity contracts
  • Payable-on-death designations on bank accounts
  • Property owned jointly with another or for which a beneficiary deed has been recorded
  • Property controlled by a marital agreement or domestic partnership agreement
  • Property owned by your trust or your business

C. Nonprobate assets may become probate assets and be controlled by your will, such as when the beneficiaries you designated do not survive you.

D. Make sure your beneficiary designations are correct and that they are coordinated with the rest of your estate plan.

6. “How does probate work in Colorado?”

A. Small estate:

  • Only for estates having no real property and valued at less than $66,000 (in 2018)
  • No court proceeding or hearings
  • Successor files will with the court and uses small estate affidavit to gather assets

B. Informal probate:

  • Over 90% of probate proceedings in Colorado are informal
  • Administrative action overseen by probate clerk
  • Usually no court proceeding or hearings

C. Formal probate:

  • For resolving disputes or supervising the personal representative’s actions
  • Court hearings scheduled as needed by the parties or as ordered by the judge

D. Probate in Colorado is less expensive and burdensome than in many other states:

  • Usually no court hearings
  • No inheritance tax in Colorado
  • Attorneys are not paid a percentage of the estate
  • Most probate cases are finished in less than a year

7. “What are some of the tasks a personal representative or trustee must accomplish?”

  • Take legal responsibility for the estate or trust
  • File required documents with court
  • Communicate with beneficiaries
  • Pay the decedent's final expenses and expenses of administering the estate or trust
  • Hire accountant, attorney, auctioneer, and other professionals as needed
  • Locate, gather, and inventory the assets 
  • Keep an accounting of income and expenses
  • Settle, pay, contest, or otherwise deal with claims and debts
  • Transfer title to real property
  • Distribute assets as directed in the will or trust
  • Prepare and file tax returns 

8. "What is a will with contingent trust?"

  • A will that includes a trust (a "contingent trust" or "testamentary trust"), which springs into place only at your death and only under certain circumstances, and which appoints a trustee manages money or other property for the beneficiaries
  • To support minor children in case both parents die
  • To support the surviving spouse in case the spouse is incapacitated
  • To create a support trust or special needs trust for a particular person
  • Useful in many situations and less expensive than a separate revocable trust
  • Your attorney can help you decide whether the benefits of a will with contingent trust justify the additional cost

9. “What is a revocable trust?”

  • May be known by other names, such as "living trust"
  • Used with a simple "pourover" will to manage and distribute assets both during life and after death
  • The trustee administers the trust assets according to the trust document
  • Most types of assets can and often should be transferred to the trust during life
  • You must sign a deed to transfer your residence and other real property to your trust
  • Assets owned by the trust normally pass without probate at death
  • This type of trust is adaptable to a wide range of personal and financial circumstances

10. “When should I consider a revocable trust?”

We see a lot of advertising telling us that probate is expensive, complicated, and time-consuming and that we must avoid it by having a revocable trust. That may be true in many states, but probate in Colorado is generally more straightforward and less expensive. Court hearings and usually not required, and probate court files are not available to the general public. So, in Colorado, "avoiding probate” need not be the primary reason to spend money on a revocable trust.

However, a revocable trust is often useful and desirable for other reasons, such as:

  • Planning for possible incapacity in the future
  • Owning property out of state
  • Dealing with community property
  • Managing properties or business interests that you own separately from your spouse or partner

In an appropriate situation, the benefits of a revocable trust are well worth the up-front expense of creating and maintaining the trust.

Contact attorney Charles C. Tucker now to get started on your estate plan.