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Colorado Springs Estate Planning And Probate Blog

Don't forget about your pets when planning your estate

When a person in Colorado Springs starts developing an estate plan, they may initially think of what assets they want to pass down to their spouse, children and other loved ones. However, they may not initially think of what will happen to their pets if they pass away before their pet does. Our furry friends need protection in such times, so those undergoing the estate planning process will also want to address how they want their pet cared for if their pet outlives them.

One option is to execute a pet trust. In a pet trust, a person selects a trustee to care for the pet and funds are allocated specifically for the pet's care. This way, the funds are being left to a human trustee (it generally is not possible to leave funds to a pet directly in a will or trust). It is important that the person you are selecting as the trustee is willing and able to care for your pet before executing such a trust.

On what grounds might a person contest a will?

Losing a loved one is never easy. Learning that your loved one left behind a will may initially be a source of comfort. However, this relief may soon be extinguished if an heir believes that the will was improperly executed or should otherwise be invalidated. However, simply disagreeing with the terms of a will is generally not enough to challenge it in Colorado. Other more substantial grounds are needed to challenge a will.

First, there is testamentary capacity. The testator must understand the extent of their assets and what they are worth, who their heirs are and the effect of passing assets on to these heirs through the will. If these elements are lacking, the testator may not have had the mental capacity to execute a will in the first place.

What are the duties of a personal representative in Colorado?

In both informal and formal probate proceedings in Colorado, if a person does not designate a personal representative in their will, the court will assign someone to this role. Personal representatives have many duties regarding the winding up of the decedent's estate. It is important that they understand what these duties are, as they could face personal liability should they fail to properly fulfill their role.

The personal representative must provide notice of the decedent's passing, either in an area newspaper or through the mail, to any known or possible creditors of the decedent. These creditors' claims must be paid out of the decedent's estate. This means the personal representative will likely have to create an estate inventory, assign a value to estate assets, consolidate estate assets and/or liquidate estate assets. All applicable tax returns must also be completed and paid out of the estate funds.

Three common myths about durable financial powers of attorney

People have a variety of reasons for putting off estate planning. Some people avoid estate planning because they do not want to think about death, aging or the possibility of incapacitation. Other people put off estate planning because they believe common misconceptions about various estate planning documents.

A durable financial power of attorney is one type of estate planning document people often have misconceptions about. In general, this document allows you to give someone of your choice the legal power to manage your financial matters on your behalf. With a durable power of attorney, this power usually starts when you sign the document, continues if you become incapacitated, and ends when you revoke it or pass away.

Consider transfer on death accounts when estate planning

Transfer on death (TOD) accounts go by many names. Sometimes they are referred to as Totten trusts or as payable-on-death accounts. What a TOD does, though, is provide a means for a person in Colorado to pass on assets to their spouse or another loved one in a manner that is simple, making them an important and attractive part of a well-rounded estate plan.

While state law varies, in general joint bank accounts, investment accounts, a home or an automobile will allow a transfer of the account or asset upon the death of one joint owner to a TOD beneficiary. These beneficiaries can include a surviving spouse, children and other loved ones. In general, when a surviving spouse is a beneficiary, he or she will have a claim to 50 percent of the account. Oftentimes when someone other than a surviving spouse is to be a beneficiary to the TOD account, a person's spouse must provide consent to such a transfer in writing.

Luke Perry's death reminds us to execute an estate plan

Actor, Luke Perry, made famous by his work on the 1990s teen television drama, "Beverly Hills 90210," tragically passed away from a stroke earlier this month. He was only 52 at the time of his death. He leaves behind a fiancé, two adult children, his mother, siblings and other loved ones. His loved ones, along with his fans in Colorado and across the nation, will feel his loss keenly.

However, this tragic situation serves as a reminder that not everyone is guaranteed to live to an old age. Unfortunately, sometimes a person suffers a life-ending injury or illness at an early age. Sometimes these incidents come after a protracted illness, while other times these events happen suddenly. What is important to remember, then, is that it is never too soon to think about estate planning.

What are some common clauses included in wills?

When a person in Colorado wishes to create an estate plan, oftentimes the first document they execute is a will. In general, a will can be divided into four parts, with each part having several main clauses. We will review these clauses, but as always, readers should note that this post does not provide legal advice.

The first part of most wills includes preliminary provisions. This may include an exordium clause, as well as a clause stating with what funds any death taxes will be paid. A family statement will also be included in the preliminary part of a will.

Does every estate need to go through the formal probate process?

Many people in Colorado may have heard of the term "probate" and they may envision it to be a long, complicated process. However, there are actually three types of estate administration processes here: those involving small estates, those involving uncontested (informal) estates and those involving contested (formal) estates. The probate process an estate will go through depends on the value of the estate and whether or not the estate is contested, including situations where there is an invalid or ambiguous will.

Small estates are those that are worth less than $50,000 and do not contain any real property. Heirs may collect assets in a small estate through the execution of an affidavit that is submitted to the court. A formal probate action does not have to be opened for a small estate.

Blended families present estate planning challenges

It is not unusual for a married couple in Colorado to have children, and then later divorce. Sometimes, one or both parents will remarry, creating a blended family. While it is generally good for people to end a marriage that is simply not working out, and for these individuals to find love again when their children are grown, estate planning when it comes to blended families can be complex.

This is because an adult child may have concerns that their stepparent will inherit everything should their biological parent pass away first, leaving the adult child with nothing. However, with a carefully drawn estate plan, parents can provide for both their new spouse and their children from a previous marriage in a way that is fair to all.

Even those without children need a comprehensive estate plan

If one has a child, it is often the case that they want their child to inherit their assets when one passes away. Therefore, those with children may execute a will or trust to ensure this happens. However, estate planning is important for anyone, including those who do not have children. This is because without an estate plan, the state will determine who will inherit one's assets and make decisions on their behalf.

Therefore, childless persons in Colorado should still execute a will or trust. This way, they can ensure that a beloved relative or friend inherits their estate or that their estate go to a favorite charity following their death. But, a comprehensive estate plan includes more than just a will or trust. It can also address end-of-life issues regarding health care and finances.

Schroer & Williams Law Offices, PLLC
7045 Campus Drive, Suite 103
Colorado Springs, CO 80920-6560
Phone: 719-473-4355
Fax: 719-380-0299
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