intestate colorado

Review your estate plan to make sure it still fits your life plan.

Many clients have an estate plan in place - but for these documents to really serve the purposes they were created for they sometimes need to be updated as life circumstances change and time marches on.  

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Periodically reviewing your plan estate plan ensures it accurately reflects your current life plan - both your present needs and your goals going forward.   Make sure you review and update your estate plan if your personal or financial situation changes or if a number of years have gone by and for instance your minor children now have children of their own.

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Some of the most important triggers for updating your estate plan include:

Divorce. Once your divorce is finalized, your plan should be revised as quickly as possible to reflect your current situation.   In addition, you can take steps to protect your heirs from potential future relationships that might impact their legacy unintentionally.

Re-Marriage. If you and your new spouse both have children from a previous marriage or relationship, working with an estate planning attorney is essential to navigate the complexities of providing for the children of both parents.   

Birth or Adoption of Children. In addition to providing for your children’s financial future, any good estate plan will also allow you to appoint a legal guardian (both for finances and physical care) in the event you and your spouse die or are incapacitated.  The guardian designation should be updated as needed depending on circumstances and should always reflect the best interests of the child/children NOW.

Illness or Injury. If you or one of your family members becomes seriously ill, you may want to consider changing your plan to reflect increased needs and or the creation of trusts for special needs, etc.

Changes in Tax Laws. Tax laws are constantly changing and can dramatically affect your estate plan.   An estate lawyer can  help ensure that your plan takes advantage of new legislation and makes sure you have a viable, current asset protection plan in place so that your estate avoids taxes as much as possible.

Inheritance. If you receive a large inheritance, this could shift your estate planning considerably.   The increased value of your estate may cause you to change how your assets are distributed upon your death, as you might want or need to add trusts for your beneficiaries and or more charitable contributions or both.

These are just a few examples of when a meeting with your estate planning attorney is in order to make sure your estate plan meets your life plan.  I am happy to discuss my client's current plans with them any time they feel the need for such a review: and always available to review a new client's "old plan" as part of my complimentary initial consultation.  

Estate Planning and Personal Effects

Who gets mom's wedding ring?! When clients hire me to create their estate planning documents, we have a thorough conversation about their assets, how they are held, and to whom they want them to go to. This conversation is focused primarily on the large assets, such as the family home, retirement accounts, insurance policies, other properties and investment accounts. Part of the initial estate planning process is to really look at these and then clearly designate beneficiaries.

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Inevitably during this discussion, the client’s personal effects come up. In Colorado, personal effects, such as grandmother’s antique ring, grandfather’s favorite chair, mom’s jewelry, dad’s watch, etc., can be designated in a separate Memorandum of Personal Effects that is incorporated into the Will by reference. This allows my clients to keep a running inventory of bequests and beneficiaries for personal times that can be changed over time.

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I provide this memorandum as part of the estate planning notebook I create for my clients. The Memorandum, referenced in the Will, is binding and it simply has to be dated and signed. This allows the personal representative or family members peace of mind and ease. It avoids the stress and conflict of having to figure out who gets what. An analogy I recently read about in the New York Times is that without this Memorandum, its like waking up to a house full of kids on Christmas morning and having no name tags on any of the wrapped gifts – chaos!  To read this article click here.

The article, references a workbook called Who Gets Grandma’s Yellow Pie Plate, by Marlene Stum. She says that the process starts with recognizing that dividing up a loved ones’ belongings is laden with emotions and can be a real mine field for family members and friends. The workbook helps sort out the process by helping people:

  • Determine what you want to accomplish, decide what's fair to your family.
  • Understand belongings have different meanings to different individuals.
  • Consider distribution options and consequences
  • Agree to manage conflicts if they arise.

To learn more about this workbook, click here.

In representing my probate clients, I have seen sibling relationships torn apart because they don’t agree about how to divide up the personal property of the deceased.   My clients that are appointed as personal representatives really struggle, during a time of personal grieving, to try to figure out how to divvy up personal effects fairly, without hurt feelings.

All of this can be avoided with an estate plan that provides for a Memorandum of Personal Effects. I advise my clients to use this Memorandum as a living, breathing document that they can continue to add to and change as time goes by. So when a loved one expresses a sentimental attachment to a certain item, my client can simply add that to their Memorandum and know that that beneficiary will receive that heirloom.

Beneficiary Deeds In Colorado - Avoid Probate for Small Estates

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Beneficiary deeds can help avoid the need to probate small estates. Under Colorado’s simplified probate process, Colorado's probate code allows the beneficiaries of an estate to collect the estate assets by using a small estate affidavit, rather than a going through a full probate procedure, if the estate consists only of personal property with a value not exceeding $64,000.00 in 2016.

No such procedure is available in Colorado to clear title to real property at death. However, if a beneficiary deed has been filed prior to the death of the property owner, marketable title to the beneficiary can be transferred after death, without the need for probate administration. The beneficiary deed transfers the property outside of the estate and the value is not included in the estate.

Colorado’s beneficiary deed statute carefully defines the interest of the beneficiary in order to protect the rights of other parties interested in the property. First, during the lifetime of the owner who grants the beneficiary deed, the beneficiary has no legal right or interest to the property whatsoever, and the owner retains full power and authority with respect to the property without the need to notify or obtain the consent of beneficiary for any purpose.  The beneficiary deed also provides an alternative method to transfer real property to an owner's trust at death, avoiding issues with lenders that might occur when mortgaged property is transferred to a trust during an owner's lifetime.

Under Colorado’s beneficiary deed law, the beneficiary deed must be recorded before the death of the owner. If not recorded before the death of the grantor, the property will then eschew to the deceased’s estate. A beneficiary deed can be revoked during the owner's lifetime by recording a revocation of the deed, or by recording another beneficiary deed executed after the revoked deed. A subsequent beneficiary deed revokes all beneficiary designations in their entirety, even if the subsequent deed doesn't convey the owner's entire interest in the property. At the owner's death, the most recently executed beneficiary deed or revocation of all beneficiary deeds or revocations recorded before the owner's death controls. It is important to note that if there is an effective beneficiary deed in place at the owner's death, the owner's Last Will does not control disposition of the real property, regardless of the date of the Last Will.

An owner of an interest in real property in joint tenancy may execute and record a beneficiary deed, but the deed is only effective if the joint tenant-owner is the last joint tenant to die of all the joint tenants. If the joint tenant-grantor is not the last joint tenant to die, the beneficiary deed is not effective at his or her death, and the grantee-beneficiary does not become a joint tenant with the surviving joint tenants. The law specifically provides that a beneficiary deed does not sever a joint tenancy.

The grantee-beneficiary named on a beneficiary deed effective at an owner's death does not immediately receive marketable title. The grantee-beneficiary's interest is subject to all conveyances, encumbrances, assignments, contracts, mortgages, liens and other interests affecting title to the property, regardless of when they were created, as long as notice of the interest is recorded within four months after the owner's death. After this four-month period, the grantee-beneficiary can pass marketable title to a purchaser of the property. However, the grantee-beneficiary may remain accountable for the proceeds of the property to persons interested the owner's probate estate for up to three years. If the probate assets are insufficient to cover claims by creditors, by a surviving spouse or children for statutory allowances, or a Medicaid recovery claim, the personal representative may bring a proceeding against the grantee-beneficiary to recover a share of the equity in the property, to the extent necessary to discharge the claims. The personal representative must begin such a proceeding within one year after the death of the deceased owner. Other persons whose claims against the grantee-beneficiary might be brought as late as three years after the owner's death can be barred earlier, if the owner's death certificate is recorded in the real property records.

The beneficiary deed statute specifically provides that a person cannot qualify for Medicaid assistance if the person has a beneficiary deed in effect. To ensure that a revocation can be made should a person require Medicaid assistance, any person executing a beneficiary deed should also execute a power of attorney specifically authorizing an agent to execute and record a revocation of any beneficiary deed, if necessary for purposes of qualifying for Medicaid.

Shimer Law can answer your questions about the possibility of using a beneficiary deed in your estate planning to avoid probate and ensure that your real property passes as you intend it to.

Disclaimer -- Content is general information only. Information is not provided as advice for a specific matter, nor does its publication create an attorney-client relationship. Laws vary from one state to another. For legal advice on a specific matter, consult an attorney.

Estate Planning is Life Planning!

Having an estate plan in place is an important part of your life plan - if not for you, for your loved ones!

Having an estate plan in place is an important part of your life plan - if not for you, for your loved ones!

Regardless of whether a loved one in your family is facing a debilitating disease such as Alzheimer’s, ideally you should have your legal planning in place for such an event – thereby taking one less major stressor off the table should something occur. Legal life planning should include: Estate planning documents including Last Will, Powers of Attorney and Living Will. If you have already completed these documents then it is important to review existing legal documents and make necessary updates. This allows you and your family to:

  • Make legal plans for finances and property
  • Put plans in place for enacting your future health care and long-term care preferences
  • Name another person to make decisions on your behalf when you no longer can

At a minimum your estate planning documents should include:

General durable power of attorney .  The power of attorney allows you (the principal) to name another individual (called an attorney-in-fact or agent) to make financial and other decisions when you are no longer able. A successor agent or agents should also be named in case the original agent you choose is unavailable or unwilling to serve. Power of attorney does not give the person you appoint (agent) the authority to override your decision making. You maintain the right to make your own decisions, as long as you have legal capacity. A durable power of attorney for finances/property allows you to designate another person to make decisions about your finances, such as income, assets and investments, when you can longer do so.

Power of attorney for health care.  A power of attorney for health care allows you to name a health care agent to make health care decisions on your behalf when you are no longer able.

Health decisions covered by the power of attorney for health care include:

  • Doctors and other health care providers
  • Types of treatments
  • Care facilities
  • End-of-life care decisions, such as the use of feeding tubes
  • Do not resuscitate (DNR) orders
  •  

Discuss your wishes regarding care with your chosen agent early and often to make sure that this person understands your wishes and is willing and able to act on your behalf when the times comes.

Living will .  A living will, a type of advance directive, expresses your wishes for what medical treatment you want, or do not want, near end of life, such as life-prolonging treatments. In Colorado, this document should be respected and adhered to by medical personnel so long as it has been signed in front of two witnesses and notarized. It is a document you should prepare and sign before any disease such as Alzheimer’s progresses.

Last Will and Testament.  Your Last Will and Testament provides information about how your estate will be distributed upon death. In your will, you may name a personal representative, the person who will manage your estate, and beneficiaries, the person(s) who will receive the assets in the estate.

Intestate Rules for Non-Married Individuals In Colorado

Singles (aka non-married individuals) often procrastinate about estate planning.  If you are one of my friends or colleagues who fall into this category here is a brief summary of who will inherit your assets should something happen to you.  By taking the mystery out of what happens I am hoping to alleviate some of the worry and maybe even encourage some proactivity in this regard.

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Colorado's intestacy rules are similar to the rules found in other states but don't provide for inheritances by remote relatives, such as distant cousins. State laws set the inheritance rules for the estate of a person who died intestate; however, these rules don't take the financial needs of his heirs into consideration.

If a non-married individual dies with children, their children inherit their estate. If a non-married individual dies with no children then surviving parents inherit his/her entire estate. If both parents are dead, the estate goes to the parents' surviving descendants: for example, the siblings of the deceased person. Surviving grandparents may inherit the estate if the parents have no surviving descendants. If both grandparents are dead, their surviving descendants inherit the estate. In cases where the deceased person's parents and grandparents left no surviving descendants, the estate may go to the state of Colorado.

Colorado's laws allow inheritances by a birth parent who adopted out the deceased person or any birth children the deceased person put up for adoption, but only to prevent the estate from going to Colorado because of a lack of heirs.

Not all property is subject to Colorado intestacy rules, some of it if properly designated/titled can pass out of these intestate rules. Money from retirement accounts, such as 401(k) accounts, and insurance plans go to the person named as the beneficiary on the account or plan paperwork. Property owned with another person as a joint tenant —the family home, for example—belongs to the surviving owner. Any property transferred to a living trust belongs to the trust and isn't subject to intestacy laws. Bank accounts that have another person designated to receive the funds if the account holder dies—known as "payable on death" accounts—pass to that designated person.