Estates, Trusts, and Probate
Will you leave a firey legacy or just a fire?
Sometimes you need answers. And sometimes, though you may not know it, you need the right questions. Here are both the questions we hear the most and the questions we wish others would ask.
Our Questions to You
Do you have a Will or any other estate plan already?
If so, you may not need a full estate plan, but, instead, an add-on called a “codicil.” This is an addition or supplement that adds, modifies, or revokes sections of your Will. While the Will should only be one piece of your estate plan, this can cut the cost of your redoing your estate plan.
Do you have a Durable Power of Attorney and a Medical Durable Power of Attorney?
You may have heard of the second one if you have had major surgery done, but the word “Durable” in particular means that if you are incapacitated and cannot speak for yourself, a designated person can speak for you on your behalf without a major court battle, at least most of the time. This is helpful for everything from paying your bills out of your bank accounts to collecting what is owed to you, caring for your holdings and children as necessary, and, of course, making medical decisions that might fall into a gray area just outside of your Living Will.
Do you have a Living Will?
This is even more common than a Medical Durable Power of Attorney before major surgery. It is equally recommended to the Medical Durable Power of Attorney just so that your choices in medical procedure are adhered to, perhaps even despite the choices of your MDPoA representative.
Do you have children or pets others will end up taking care of?
While not legally required, it has been our experience that, whether during incapacitation or after death, having a kind of “owner’s manual” for your children and pets is a good idea. Our experience in watching how much this is needed started with a child of Rebecca’s adopted sister who had a lot of food allergies that were recognized by doctors but not much of her own extended family. Even with her alive, visiting any of these relatives was a risk to her child’s life because they refused to recognize his food allergies. Even in smaller cases, it is good for a caregiver to be given a checklist of things that the child or pet might need such as a favorite pillow, favorite toy, any medicines or allergies, or the phone numbers and addresses of his/her friends. There is a lot to be said for having an “owner’s manual” handy in case you are in an accident and someone else needs to step in that does not know your children or pets as well as you do.
Do you own a business or hold significant holdings and leadership in a business?
This goes back to the Durable Power of Attorney. You can split up the responsibilities within a Durable Power of Attorney to match your responsibilites, which includes investments, ownership, and management. While it should take a bit more discernment on your part, you can legally designate someone to take care of your holdings while you are incapacitated and cannot speak for yourself. To do otherwise is to leave your holdings to fend for themselves.
Your Questions to Us
Does it matter what city I live in?
State, yes. City, no. That is why we do not recommend the “do-it-yourself” Wills online or by software, because the form they use may or may not be 100% kosher with Colorado law. There are no laws by county or city that should in any way hinder your estate plan.
What can I do in my Will?
The short answer is “Anything you want with whatever is yours.” There are exceptions such as co-owned or community-owned properties, private stock options, but for the most part it us up to you to decide who will get what. As such, we highly recommend, based on personal as well as professional experience, that you pay close attention to the things that might cause those left behind to take on the pandemic our office has called “death hormones,” the fighting that occurs over things seemingly left out of the Will. Prime examples have included things as small as favorite mugs from a mug collection, the family photos, a travel spoon collection, and as large as what to do with the land given to one generation when the next generation may have already been promised it for whatever reason. Feel free to be exacting in detail with the Will, and, if you feel that something in particular will cause too much anger between family members, there is always having it sold and giving the proceeds to charity.
What if I don't know who to leave my "stuff" to?
The most generic basis the State uses is the spouse followed by the children followed by siblings and then parents. As a general rule for escaping probate fights, a majority (over 50%) should go to someone in the family and the rest can then be easily given to charity, assuming there is anyone in the family that is one of those first levels the State looks at. If there are no children, spouse, siblings, or parents, the State really doesn’t care and it costs a substantial amount of money, all out of that estate, to work out the details of who gets what, so it is better to give it away to someone than to have others fight over it.
Will an estate plan help me preserve my assets? What about Medicaid/Medicare?
This is where things like Trusts come into play. A Trust basically places a “Trustee,” a kind of guardian, over an asset to hold for someone else until your death or whatever other limitation you place upon it. As such, since you no longer own the asset, it no longer will effect your ability to use Medicaid or Medicare. It must, however, be done well ahead of the need. You will not be able to apply for Medicaid or Medicare and receive it for as long as a year after you get rid of the asset, so do such things sooner rather than later. Also, DO NOT simply turn over your asset to someone else. We have seen more than a few cases of senior citizens getting thrown out of their homes by new owners of their homes for a variety of reasons.
What is Probate?
Probate is the legal term for taking care of contested assets in an Estate. It eats up Estate funds and takes a lot of time to get through which is why a Will is so important. Without a Will, Probate is necessary by Colorado law.
Why should I have an estate plan? Why should I worry about avoiding Probate?
In the end, it probably is not necessary to have an estate plan or to concern yourself about Probate since you will be dead, but if you love your family, you will help them avoid Probate. It is messy, expensive, and takes a lot of time and paperwork. Making a Will takes far less time and paperwork and saves your family from Probate trouble later.
Can Probate help me?
While avoiding Probate is always the first choice, Probate does have the benefit of having an arbiter hearing the arguments for ownership of contested assets that had somehow not been mentioned in any way, shape, or form in the Will. It is also capable of shutting the door on any contesting bills following the death of a loved one. Probate is not an enemy to be avoided, but a tool to be used as necessary.
Do I need an attorney to go through Probate?
Like so many other things, it is not entirely necessary, particularly if there are no actual fights over any asset, however it will help the process go smoothly at a time of grief. Consider the alternative: You, as a loved one, are still grieving and are now faced with the stresses of distributing assets of that loved one to others and the judge is looking to you to file the correct paperwork on time. If nothing else, you may save money in the long run by saving your own time.