Introduction: What Clients Tell Me

I'm so relieved that I've finally completed my estate planning documents. I would have gotten them done sooner, but . . .

. . . I was too busy
. . . I didn’t think I owned enough to bother with it
. . . I could not decide who should get my assets
. . . I did not know how to start or where to get help
. . . I did not want to spend money on it
. . . I did not want to face my mortality or incapacity

Reality check:

  • Contemplating your own incapacity or death may be troublesome, but you must finish and sign your documents or amendments before incapacity or death strikes
  • You need your estate planning documents to speak for you when you cannot
  • Spending some time and money now to create and maintain a good estate plan will help save time and money later for your successors

1. "What is an estate plan?"

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

Core elements of an estate plan include:

  • Durable financial power of attorney
  • Medical power of attorney (also called health care power of attorney)
  • Advance medical declaration (declaration as to medical and surgical treatment or living will)
  • Will (last will and testament)
  • Personal property memorandum
  • Designation of guardian for minor children

Your estate plan also includes:

  • Your beneficiary designations on investment accounts, retirement accounts, insurance policies, annuity contracts
  • Your payable-on-death designations on bank accounts
  • Deeds and other documents showing joint ownership of real property, bank accounts, and other assets
  • Beneficiary deeds transferring real property at death
  • Business documents, such as buy-sell agreements, operating agreements, and shareholder agreements
  • Marital, prenuptial, or domestic partnership agreement

2. "What is a durable financial power of attorney?"

A written document in which:

  • You appoint an agent and alternate agents
  • To manage your finances and assets
  • For your benefit
  • While you are living but not able to manage them yourself
  • According to the authority granted in the document
  • Beginning immediately, or only if you become incapacitated, or as otherwise specified in the document

A financial power of attorney helps you and your successors by:

  • Appointing an agent you have selected
  • Guiding and directing the agent
  • Reducing potential for disagreements among family and others

Keep in mind:

  • Your durable financial power of attorney can and should be amended as your circumstances or wishes change
  • Your durable financial power of attorney expires at your death
  • After your death, your agent no longer has control over your money or other property - at that time, your personal representative or trustee takes over

3. "What is a medical power of attorney?"

A written document in which:

  • You appoint an agent and alternate agents
  • To make health care decisions for you
  • In consultation with your health care providers
  • If you can't personally communicate your own decisions
  • Because you are incapacitated (temporarily or long-term)
  • The agent cannot act until you become incapacitated (temporarily or long-term)

A medical power of attorney helps you and your successors by:

  • Giving the medical provider the name and contact information of the agents you have appointed
  • Putting your needs and preferences in writing so that they are clear to your family and medical providers
  • Reducing the potential for disagreements about your care

Keep in mind:

  • Your medical power of attorney can and should be amended as your circumstances or wishes change
  • Your medical power of attorney expires at your death

Your medical power of attorney may include the following, or they may be separate documents:

  • Medical declaration (living will) in which you express your instructions and preferences for care near the end of life.
  • Your final instructions for organ donation, disposition of the body, and memorial or funeral arrangements.

These documents are different from a "Do Not Resuscitate" or "DNR" order. A DNR can only be signed by a doctor.

4. "What is a will?"

A written document in which you:

  • Appoint a personal representative (executor) to gather and distribute the assets that can be controlled by the will
  • Make specific gifts of money or other property to individuals and charities
  • Direct the disposition of your residence
  • Provide for your surviving family members
  • Distribute the rest of your assets to the people or charities you have designated
  • In other words, you give your instructions and wishes about "who, what, when, where, why, and how"

A will helps your successors by:

  • Appointing someone you believe will do a good job
  • Appointing alternates so your successors don't have to ask the court to appoint one
  • Giving specific directions about distributing your money and other property
  • Reducing the expense of administering your assets
  • Reducing potential disagreements among family and other beneficiaries

Keep in mind:

  • You must have legal capacity to sign a will or codicil (amendment to a will)
  • Your will can and should be amended as your circumstances or wishes change
  • Your will and any codicils take effect only at your death
  • You can give specific items by a separate signed and dated personal property memorandum
  • An improperly prepared will may be unenforceable or only partly enforceable

5. "What are nonprobate assets?"

Your will typically does not control all your assets. "Nonprobate" assets are controlled not by the will but by beneficiary designations, deeds, or contractual arrangements.

Be sure to review these items with your estate planning attorney:

  • Beneficiary designations on investment accounts, retirement accounts, insurance policies, annuity contracts, and the like
  • Payable-on-death designations on bank accounts
  • Joint ownership of real property and bank or investment accounts
  • Beneficiary deed for real property
  • Marital or domestic partnership agreement
  • Trust and business agreements

If your beneficiary designation is left blank or the beneficiaries you designated are no longer living, then the asset becomes a probate asset and is controlled by your will. Make sure your beneficiary designations and similar arrangements are correct and that they are coordinated with the rest of your estate plan.

6. "What happens if I die without leaving a valid, signed will?"

  • If you do not leave a valid will, a probate proceeding may be required
  • Your instructions to family or friends about your assets may not be enforceable
  • The default statutes under state law determine who can be appointed as personal representative
  • The default statutes under state law determine who receives your assets after expenses are paid
  • Other relatives, friends, or charities would not have a right to receive anything from your estate

7. "What are the main duties of a personal representative?"

  • Take legal responsibility for the estate and its assets
  • Locate, gather, and inventory the assets
  • File the original will, if any, with the court
  • File other required court documents
  • Communicate with beneficiaries
  • Hire an accountant, attorney, real estate agent, and other professionals as needed
  • Pay the decedent's final expenses and expenses of administering the estate
  • Keep an accounting of income and expenses
  • Make provisions for the support of the decedent's immediate family
  • Settle any claims or debts
  • Distribute assets according to the will or as required by law or court order
  • Transfer title to real property
  • Prepare and file the decedent's final income tax return and other tax filings
  • Take care of other matters according to the specific circumstances

8. "How does probate work in Colorado?"

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

  • Court hearings are usually not required
  • Uncontested probate cases are often finished in 6 to 9 months
  • Colorado does not have a state inheritance tax
  • Attorneys are not paid a percentage of the estate

Small estate administration:

  • A "small estate" has no real property and has a total value of less than $70,000 (in 2020)
  • No court involvement, except that the will (if any) is filed with court clerk
  • The successor uses a Small Estate Affidavit to gather the estate's assets

Informal probate:

  • Most probate proceedings in Colorado are filed under the "informal probate" procedure
  • Handled as an administrative matter by the probate registrar of the court
  • Usually no court hearings or court supervision
  • Initiated by filing an application and other documents with the court
  • The probate registrar issues Letters Testamentary (if there is a will) or Letters of Administration (if there is no will)
  • The Letters allow the personal representative to transfer real property and take other actions on behalf of the estate
  • The personal representative gathers the estate's assets, pays expenses, and distributes money and other property to the beneficiaries
  • The personal representative (or their attorney) mails notices to persons having a legal interest in the estate
  • A notice to creditors is published in a local newspaper
  • The court is available if needed to resolve an ambiguity or dispute

Formal probate:

  • The "formal probate" procedure is used when court hearings or supervision are needed or desired
  • In Larimer County, less than 10% of probate cases are filed under the formal procedure

9. "What is a trust?"

In a trust, you:

  • Identify the trust property and the purposes of the trust
  • Designate the trust beneficiaries
  • Appoint a trustee and alternates
  • Give instructions to the trustee about managing trust assets and regulating the flow of money to beneficiaries
  • Direct the trustee to keep an accounting, preserve records, and send reports to designated persons, as well as carry out the tasks required by law
  • A trust is a flexible tool that can be written to suit many different circumstances.

Here are a few of the common types of trusts:

Testamentary trust (contingent trust)

A testamentary trust is part of your will and springs into place under specified circumstances. In this example, a testamentary trust provides support in case both parents die leaving minor children:

  • Each parent has a will with a testamentary trust
  • The trust comes into effect only at the death of the second parent and only if any of their children is under a specified age
  • The trust is funded with money and other property, through the will or by beneficiary designation
  • The trustee manages the trust assets and makes payments for the support and benefit of the children
  • When each child reaches the specified age, the rest of the child's share is distributed to the child as a lump sum

Testamentary trusts can also be used to support other beneficiaries or to manage certain assets. Your attorney can help you decide whether the benefits of a will with testamentary trust justify the additional cost.

Revocable trust (living trust)

A revocable trust is created during your life and functions alongside your will after your death.

  • You can change your revocable trust during your life, so long as you have legal capacity
  • You transfer money and deed property to the trust during your life and through your will
  • Typically, you are the trustee and the beneficiary of the trust during your life
  • After your death, your successor trustee continues to manage the trust for your beneficiaries according to the trust agreement
  • Assets owned by the trust normally pass without probate at death
  • A very simple will ("pourover will") allows your trustee to administer assets not owned by the trust at your death
  • If a married couple uses a joint revocable trust, each person still has their own will.

  • A revocable trust can help with planning for possible future incapacity, reducing potential federal estate tax, managing assets that you own separately from your spouse, or dealing with out-of-state or community property. Despite some marketing claims, "avoiding probate" is usually not the main reason to use a revocable trust for people living in a state like Colorado that has more modern probate procedures.

    Your attorney can help you decide whether a revocable trust is right for your situation. Paying for a customized revocable trust now may well save your successors money, time, and trouble later.

Irrevocable trust

An irrevocable trust is created during your life and functions separately from your will.

  • You transfer ownership of certain assets to the trust
  • The trustee has complete (or almost complete) control of the assets
  • The assets are removed from your estate and used to support others
  • One variation, the irrevocable life insurance trust (ILIT), owns an insurance policy on your life and uses the proceeds to support family members or to pay estate taxes

Other trusts

Variations on the types of trusts described above are often used for specific purposes, such as:

  • Charitable trusts
  • Multi-generation trusts
  • Special needs trusts for the support of an adult receiving governmental assistance

The recordkeeping and other legal requirements imposed on trustees can be burdensome. You may want to consider appointing a professional trustee in addition to or instead of a family member trustee.

10. "Can I write my own will?"

Yes, but . . .

  • You may find that writing a will is trickier than it sounds
  • Any significant mistakes, ambiguities, or gaps in your document may cost your successors attorney fees, court fees, time, and hassle to resolve them - and attorney fees, for one, will undoubtedly be higher at that time than they are now

    A note of caution about handwritten (holographic) wills:

  • They are recognized as wills in Colorado, if they meet the specific requirements of Colorado law
  • A holographic will must also meet the standards that apply to wills in general
  • A will that does not meet the requirements may be unenforceable or only partly enforceable
  • Only about half the states recognize holographic wills, and each of those states has different requirements
  • If you move to another state, your holographic will may no longer be valid

11. "Is it all right to use forms or information from the internet?"

Yes, but . . .

  • Legal forms are not magic
  • The content varies greatly from one form to another and from one state to another
  • You need to be able to discern what a given form says and whether it meets your needs
  • The same goes for information on websites
  • Is the form or information complete, up-to-date, and appropriate under Colorado law?
  • How do you know, apart from the assurances on the website itself?
  • Websites cannot give you legal advice for your specific circumstances

12. "Should I hire an estate planning attorney, and how should I do it?"

Consider hiring an estate planning attorney if any of the following apply:

  • You value personalized advice and service
  • You need help understanding the legal or practical issues
  • You want to know what options are available for achieving your goals
  • You have business interests, real property, or other potentially complex assets
  • You want to coordinate all the elements of your estate plan

    How to select and hire and estate planning attorney:

  • Ask your friends, accountant, or financial advisor for referrals
  • Review websites for several firms that have a specialty in estate planning, and ask for short phone interviews
  • Don't be shy about discussing the potential cost at the first meeting
  • The cost will depend on the details and complexity of the situation
  • You should receive a written engagement agreement saying what the law firm will do, the rates you will be charged, and other details

Please remember:

  • Make sure you understand your documents before you sign them
  • Talk to your loved ones about your concerns, plans, and intentions
  • Make sure all your beneficiary designations are up to date
  • Keep your estate and property documents where your successors can find them
  • Review your estate documents with your attorney every few years or if you have a change in family or financial circumstances
  • If you have been putting it off, please don't wait any longer!


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