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You do not have to have a will or any other type of estate planning document if you do not want to have one. Colorado law will make one for you. Dying without a will is sometimes referred to as dying intestate. Generally, your estate assets will pass to your heirs. Dying without a will can cause unintended consequences, which you may wish to avoid. For instance, if you are in a second marriage and have children from a prior marriage, Colorado has special laws protecting the surviving spouse as well as the children from the prior marriage. The distribution rules under Colorado law may not be as you would like. In a will you are able to set out clearly your wishes to ensure your assets pass to your heirs as you desire. Also, within a will you can direct who is to handle your estate, i.e.- the personal representative. Without a directive on who is administer your estate, there may be a court proceeding brought by your heirs to determine who gets to control your estate. There are not many, if any, good reasons to die without a will or some type of estate plan, such as a "trust" estate plan. Dying without a will may be asking for trouble.

Generally, the provisions of a will direct how you wish to distribute any assets to your heirs which are subject to the probate process. A will does not control any assets other than those which pass through the probate process. Probate is a court proceeding and requires your personal representative (a person you nominate in your will) to commence a probate proceeding after you die. The proceeding is usually in the county in which you lived in when you died. A will also states your preference as to who will handle your estate (the personal representative), as well as any burial instructions or who you might choose to be a guardian for any of your surviving minor children. After you die, creditors have a right to file claims in your probate estate. Having a will does not avoid probate. This is a common mis-conception. It is actually quite the contrary. The will goes hand in hand with the probate process. The will is simply a directive which states who is to receive your probate assets. Probate is not necessarily the nightmare as it is often portrayed. After all, the person drafting the will is dead. There will be simply a directive of how you want your estate distributed. Yes, it does involve the court system, but unless there is a fight over the will, commonly referred to as a will contest, everything should proceed smoothly. It does take some time, but so does the administration of any estate, whether it is a probate, trust or non-probate type administration. There are many matters needing attention when a person dies which simply cannot be avoided. For example, it may be necessary to sell a residence. This may take time. It will likely be necessary to clean out the living quarters or residence. This may take time. It may be necessary to file income tax returns or estate tax returns. Dealing with tax returns takes time. These are not the fault of the probate process. It is just part of life and death. With the use of a revocable trust. your assets would generally be titled in the name of the trust or redirected to pass into the trust upon your death through a beneficiary or payable on death designation. If properly coordinated the assets the assets held within the trust do not need to pass through a probate proceeding. Although perhaps oversimplified, there are generally four reasons why people use a trust estate plan over a will estate plan. First, a trust, and its disposition provisions, are generally not a public record and therefore the use of a trust offers more privacy. Second, the assets in a trust are not subject to the probate process. Third, if there is real property in more than one state, the use of the trust, will avoid multiple probates in each of the states where real property is held. The fourth reason for creating a trust is to enable a successor trustee to assist with the management of your financial estate should you become disabled. In our experience, it is much easier to be acting as a successor trustee in managing a disabled person's assets than it is to be acting pursuant to a power of attorney. Creating a trust now may cost more now, but, in the long run it may save you and your estate less, by avoiding the probate process.. With a trust you may pay more now, but less later. With a will estate plan you pay less now, but more later. Remember, there is no free lunch.

If an individual dies and does not have a will Colorado law makes a will for the decedent. Under Colorado law, the decedent is deemed to have died intestate. The rules are a bit complex and it would be necessary to review the Colorado laws to determine who takes the decedent's estate assets. Who takes the assets depends upon the decedents family situation, i.e.- whether there is a surviving spouse, whether there are children, who the parents of the children are and other factors. If the decedent had a spouse, the spouse will take the entire estate of the decedent provided (1) there are no living descendants or parents of the decedent or (2) all of the descendant's surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent. If the surviving spouse does not qualify to take the entire estate then the law provides for varying amounts to be paid to the surviving spouse depending upon who else survives the decedent. The provisions of the statute can be found in the Colorado statutes. It is a bit convoluted and you will want to consult with an attorney to sort out all the respective rights of the heirs. Dying without a will impacts the decedent's assets which pass through the probate process. Often, individuals own assets which pass other than through probate. These are commonly referred to as non-probate assets. These types of assets are not controlled by the will. For example, beneficiary designations control who gets assets from life insurance policies and retirement accounts. It is necessary to look at the beneficiary designations to determine who will take those assets as they are not controlled by a will or a trust. In regards to the non-probate type assets, dying without a will makes no difference. Assets held in joint tenancy are also not subject to the probate process and therefore whether an individual has a will or not does not matter. The surviving joint tenant or joint tenants will automatically take the decedents interest in the property held in joint tenancy. Colorado law will provide for the decedent's assets to pass to the heirs of a decedent who died without a will or trust. If you plan to die without a will or a trust, or other non-probate mechanisms such as joint tenancy or by the use of beneficiary designation provisions then you should acquaint yourself with Colorado law and how your assets will pass to insure they do pass as you intend.

The short answer is no. Estate planning is not only about money. It involves making decisions regarding healthcare and financial matters, such as writing checks, if you are disabled, as well. As mentioned in other answers, if you are a Colorado resident, the the State of Colorado does have a plan for you if you do not have a will or trust. It may not be what you want, but there is a plan. It is set out in the Colorado statutes. If you do not have a medical or financial power of attorney, then the court may appoint a conservator or a guardian to help you with your decision-making. None of these are very good options. Whether you are flush with money or not you should be proactive and document your own wishes, regarding health and financial issues.

Individuals can draft their own documents. It is also possible to use some of the online websites to generate legal documents. There is nothing that says you must have a lawyer to draft those documents. Having said this, it is important to understand the precise language of a document can have significant impact on the outcome of your estate planning. Individual words do make a difference. It is very easy to make a mistake which could result in an unintended consequence. Let's give an example. Suppose, you want your assets to pass to your children from a prior marriage and not to your new spouse. Let's imagine you did not sign any type of prenuptial agreement and you have a will leaving everything to your biological children and nothing to your surviving spouse. You may not realize a surviving spouse, even though he or she is not the biological parent of your children, is entitled to receive a portion of your estate notwithstanding your desire to disinherit him or her as is evidenced by your will or trust.A lawyer with knowledge in the trust and estate area would be able to advise you of this fact. Second marriages are very common this day and age and this is one of many traps which can snare the uninformed. Yes, lawyers do make a living drafting documents, usually with extreme care, to ensure the wishes of the decedent are fulfilled. Doing so, is not always as easy as some people think. Making a small mistake can land your heirs in estate litigation which is extremely more complex and costly than simply making sure the documents were drafted properly from the start.

There are a couple of considerations to be taken into account when deciding where to keep your original estate planning documents. First, they should be kept under the control of the individual who has signed them to avoid their being tampered with or destroyed. It is important to make sure they are secure. Second, they should be kept in a safe place in the event of a fire. You don't want your house to burn down with your estate planning documents in the house. This probably mean keeping them in a safe deposit box or a substantial fireproof safe in your residence. The question always comes up in our practice as to whether or not we can hold onto original estate planning documents for clients. Some law firms do keep them in their control. Almost, without exception, we do not do this. To us, it appears we are trying to capture the documents to assist the family in the administration of the estate. It just does not feel right to us. Also, there is liability if we are holding on to original documents and a client dies and we do not learn of the death of the client. There is an obligation of anyone holding an original will turn it over to the court. Most law firms, including ours, do not feel holding onto a will or trust in its original form is wise.

If it is necessary to commence a probate proceeding, the court will need the original will. Having a will does not avoid probate. The court will review the original will to confirm it is the decedent's will and be guided by its terms in assuring the estate assets are distributed properly. Having a will does not mean you can avoid probate, if you have probate assets. The will simply tells the personal representative how he or she is to distribute the estate assets as part of the probate proceeding. We are very surprised when clients bring in a decedent's will to discuss the distribution prohibitions and are under the mistaken belief a court proceeding (i.e.- probate) is not required. In fact just the opposite is true, if there are probate assets.

Probate is a court proceeding which allows a decedent's assets to be distributed either in accordance with the decedent's will or as directed by the law in the state in which the decedent resided at the time of his or her death. The process of probate is usually started by the filing of a document, sometimes referred to as a pleading in legal speak, with the court, in the county in which the decedent lived in at the time of his or her death. If the decedent died with a will, the original will normally accompanies the application submitted to the court. In the application, the applicant asks the court to appoint a personal representative. It is the personal representative who collects the decedents assets, pays the decedent's bills, and then distributes the decedent's assets in accordance with the decedent's will or by the laws established in the state where the decedent died. Dying without a will is commonly referred to, again in legal speak, as dying intestate. As a general rule, barring any complexities, the probate process should last no more than six months. During the six-month period of time a notice to creditors is usually published in a newspaper in the county in which the decedent resided giving the decedent's creditors the right to file a claim in the estate. A claim can be contested, if the personal representative believes it is not legitimate. Distributions, at least in whole, are not made until all creditor claims have either been settled or paid. The conservative approach is to not make distributions until the period of time in which creditors have to file a claim has lapsed. Another complicating factor, which can cause a delay in closing an estate, is the filing of income taxes. Sometimes, the personal representative finds he or she must continue to act in this capacity to gather information, which is often not available until the first quarter of the year, to file income tax returns for the year in which the decedent died. In many cases this is the cause of the delay in closing the estate. It does not necessarily mean distributions cannot be made from the estate. It just means the estate cannot be closed as expeditiously as the heirs might wish. This is not the fault of the probate process. It is possible, someone may decide to contest the legitimacy of a will and this can cause a delay in the administration process. Contests are usually made for one of two reasons. The first reason is the decedent did not have sufficient mental capacity to sign the will and therefore the will is invalid. The second reason a contest is started relates to the fact the decedent was unduly influenced by someone to alter a prior estate plan. Neither grounds for contesting it a will are easy to prove. It is very difficult to show that on a particular day and time when a will was executed the decedent did or did not have capacity. An easier course, to set aside a will, in many cases, is to show the decedent was unduly influenced and the will does not reflect the decedent's wishes, but the influencer!

There are a multitude of ways to avoid probate without creating a trust. For example, there is joint tenancy (where the surviving owner(s) takes the interest of the decedent); payable on death accounts (commonly used in the banking world) and beneficiary designation forms (used with life insurance and retirement accounts). These types of assets pass other than through the probate process upon an individual's death. Manipulating the ownership of assets into one of these categories is not always easy. For instance, if you own a residence (other than using joint tenancy or a beneficiry deed) it is difficult to avoid probate without using a trust instrument. If there are multiple heirs, having multiple names on the residence might work, if everyone dies in the expected order. This does not always happen and if it does, and changes are not timely made, or cannot be made, perhaps due to incapacity, then the distribution plans for the residence may be skewed. Additionally, a major problem with distribution plans of probate avoidance techniques is the difficulty in providing for contingent (alternative) takers should the intended heir die and the distribuion plan or holding is not modified. Take the situation where a parent wishes to leave his house to his three children and places the names of the three children on the house, holding title in joint tenancy. Suppose, the parent wishes for the children of his children to take should one of the parent's children dies prior to the parent. Using a joint tenancy deed in this case would result in only the surviving two children taking the house when the parent dies. The deceased child's children do not take any of the interest in the residence, which may be contrary to the parent's wishes. A further complication in placing children's names on the residence involves creditors. Any creditor with a claim against a child can likely "go after" the child's interest in the residence during the life of the parent. This could be a disastrous result. When using beneficiary designations or payable on death accounts it is difficult to provide for contingent beneficiaries should one or more beneficiaries die before the account holder. It should be noted this does happen (more often than you might imagine) and again can create unintended consequences. Bottom line: Be careful relying on only the use of non-probate transfer means to pass assets just to avoid probate. Consider a trust if this is a concern of yours.

The term Advance Directive refers to estate planning documents such as a Medical Power of Attorney, a Financial Power of Attorney, a living will or do-not-resuscitate order. Such documents are important to include in your estate planning arsenal and should be discussed with your advisor to insure they are right for you and fit your goals. The do-not-resuscitate document, depending upon your health and age, may not be right for you, but again discuss this with your advisor.

Under Colorado law you only need to be 18 years of age to execute a will. As a side note, you also need to be of sound mind. There are circumstances when an 18-year-old may need to have a will even if they do not have a lot of assets. For instance, an 18-year-old could be a parent. In such an event, the 18 year old may wish to have a will for purposes of nominating a guardian for his or her minor child. This, by itself, would justify having a will nominating a guardian to act should the need arise. Also, having a power of attorney naming an individual to make financial and healthcare decisions for an 18-year-old could also be important. For instance, what if an 18-year-old got into a car accident and could not make his or her medical decisions? What if a dispute arose as to who would make those decisions between parents or between parents and perhaps a boyfriend or girlfriend of the 18 year old? The 18-year-old could eliminate this possible conflict by having his or her own medical and financial power of attorney.

No. As explained in another FAQ found on this page, Colorado law essentially makes a will for those who die without a will. The law generally provides your estate will pass to your heirs if you don't have a will (or other estate plan).

Some do and some don't! There are many different types of trusts. Some are designed to avoid taxes (life insurance trusts, intentionally defective grantor trusts- an IDGT, qualified personal residence trusts --a QPRT, charitable trusts--CRTs and others), while others are designed for probate avoidance and management of assets (the classical revocable or living trust). In choosing to use a trust for any of your planning needs there are many considerations to be reviewed. Trusts are great arrows to have in your estate planning quiver so be sure to discuss them with your advisor.

As lawyers often tell clients, it depends! First, let's clear up a common misconception. An individual can give anything he or she wishes to give to any third party, provided the third-party accepts what they are gifted. As a general rule, there are no restrictions on making a gift, A restriction is, however, different than a consequence. There are many potential consequences. This is where the confusion exists regarding the $14,000 amount, which is thrown around so often. For gift tax purposes, there is the potential to have to pay a gift tax upon certain gifts. Additionally, there is a lifetime exclusion amount an individual may gift without incurring a gift tax. For gifts made in 2015, this amount is $5,430,000 per individual ($10,860,000 for a couple) and can be used to make gifts during an individuals lifetime, without paying any gift tax. The gifts are cumulative, so over a lifetime it is possible to make multiple gifts without incurring a gift tax. Gifts can be in cash or real and personal property, of all types. Any unused exclusion amount can be used at an individuals death. This is huge number for most people. For example, if an individual were to give away $1,000,000 during his or her lifetime, upon his or her death (assuming 2015) he or she would have the balance of $4,430,000 available in the form of an estate tax exclusion to shelter any assets in the taxable estate of the individual at death from estate taxes. There are a few items to note: The lifetime exclusion amount and the amount available on death, is adjusted for inflation annually. The amount to keep it mind is what is the total amount available during the year of death and then subtract the lifetime gifts (other than the $14,000 "annual exclusion", discussed below) to arrive at the amount of the exclusion available to the decedent's estate at death. In addition to the lifetime exclusion, each year a person may give away an additional amount (referred to as the annual exclusion), which is currently $14,000. Thie annual exclusion is adjusted annually for inflation ("kind of"). The amount of $14,000 may be gifted to multiple parties. So, if you wanted to benefit 10 individuals you could give away $140,000 without incurring a gift tax. The annual exclusion gifts do not use any of the lifetime exclusion and are in addition to the lifetime exclusion amount. For a couple, they can each make a gift of $14,000 per person. A couple who wanted to benefit their three children, who are married, along with 9 grandchildren ( a total of 15 individuals) could give away a total of $252,000 per year ($14,000 X 9 for the husband and $14,000 X 9 for the wife) and this would not consume any of the lifetime or death exclusions. The annual exclusion gifts can be made outright or in a trust (although this can be a bit tricky) so long as they are in the form of a "present interest" (a legal term). When assets are gifted the assets in the hands of the donee (the person receiving the gift) have the same basis as in the hands of the donor. It is important to select carefully the asset which is to be gifted to insure the donee of the gift is not paying an unnecessay income tax when the gifted asset is sold. Cash is the best candidate for these types of gifts, if possible, as it has a basis equal to the value of the gifted cash. If the assets (with low basis, as opposed the value on the date of the gift) are not gifted, but instead held until death, the heirs receive the assets with a new basis equal to the date of death valuation. It may be best to avoid gifting of assets with low basis and instead holding on to them until death, when they will receive the basis adjustement. A careful analysis of what gifts should be made should be undertaken before a gift is made. We often see parents giving their home to their children to avoid having them be a countable assets for Medicaid. When this gift is made the parent is giving the child his or her basis and this approach may be an unintended consequnce to be avoided. Gifts to charites do not count against the $14,000 annual exclusion or the $5,430,000 life time exclusion or the $5,430,000 estate tax exclusion. We are talking about Federal law and not state law. States vary from state to state. Colorado has neither a gift tax or an estate (inheritance) tax. As you can see there are many issues to think about before making lifetime gifts. You may want to seek professional advice before making large gifts.

Leaving assets to an heir who is disabled or with a special need requires special planning. There are many variables to take into account when undertaking your planning. The variables would be age and needs of the heir, available resources, available public benefits, mental capacity of the heir and concerns over distributions to your other heirs. A special needs trust (SNT) can be an excellent way to protect assets if the disabled individual is in need of support after the death of the individual who is doing the planning. The SNT is set up to hold assets for the benefit of the disabled individual and can distribute assets to the disabled individual for needs other than those covered by public benefits. These are often referred to as "third party" trusts, because they are set up by a third party settlor, such as a parent and not by the trust beneficiary. If the trust beneficiary sets up the trust it would be referred to as a self-settled trust. Here is another complicated issue. For a disabled individual on public benefits (a needs and eligibility based program such as Supplemental Security Income (SSI) and/or Medicaid) who receives an inheritance the proceeds may disqualify the individual from public benefits. This could be devastating if the termination of benefits also means the health insurance coverage (through Medicaid) is also terminated as medical costs can be extremely high. There is a provision in Colorado law which allows the inherited assets to be placed into a court approved trust (often referred to as a d4A trust) converting the assets into a non-countable asset. The d4A trust allows the benefits to continue to be paid and the assets transferred to the trust to be used by the disabled individual for special needs other than food and shelter. Other individuals planning for a disabled heir, where "money is no object", having the assets restricted to protect public benefits may not necessarily be what the client wishes. Instead, having a trustee who can help make distributions to the disabled individual to carry on a quality of life as set forth by the client. Clients with mult-million dollar assets being available to help a disabled individual may not want to restrict the use of the assets as would be dictated by the use of the SNT designed to protect assets to access public benefits. Some trusts, the "spigot" trust allows assets to be distributed in the trustees discretion in such a way as to protect the public benefits of the individual, but can be turned on if the receipt of the public benefits is less of a concern. High net worth clients, leaving large inheritances to disabled individuals may choose this type of distribution provision instead.

The answer depends upon your circumstances and the analysis is not an easy one. Let us explain. The purpose of long term care insurance is to assist in the payment of long term and assisted care costs. We are talking about a stay in a skilled or assisted care facility. Long term care costs in Colorado are significant. Take a look at our variouis Special Reports. Specifically, look at those listed below: 2015 Medicaid Long Term Care Planning Guide 2015 Medicaid numbers Myths about Medicaid Community Spouse Planning Considerations Each of the above Special Reports will give you valuable background in deciding how you want to provide for the payment of long term care costs. As you can see the options are numerous. Long term care insurance, simply put, is a way to avoid paying the cost of long term (or in some policies assisted care) should you need it. Will you need long term care? Our rule of thumb: If you are age 65 and a male the chances of needing long term care are about 1 our of 3. If you are female the chances are 2 out of 3. If you are male your average stay might be 9 months and if you are female your stay in a skilled facility could be 30 months. With average cost of long term skilled care in Colorado for 2015 being $7,249 per month this means the AVERAGE male couild spend $43,434 and the AVERAGE female could spend $217,380. If you are average then you must ask yourself: How much insurance coverage do I need? If you have sufficient resources to private pay, why not private pay? Isn't buying long-term care insurance mostly to protect the resources of the surviving or community spouse? If so, how much do they really need to protect and will they have enough to live on without insurance? How much do you need to leave to your heirs and if you do choose to private pay will you leave your heirs a sufficient amount to cover their needs or what it is you wish to leave them. It should be noted, not everyone needs long term care insurance as Medicaid and private pay are viable options for many. The decision is not an easy one and does require considerable thought.

The terms Medicaid and Medicare are commonly confused. If you have the two programs confused do not feel bad, as you are not alone. Think of Medicare as the benefit paid by the US Government in the form of providing you health insurance, once you turn age 65. Just Google the term and there is more than sufficient information on what it means to keep you awake (or put you to sleep) for a long time. Medicare is an entitlement, which means you get it whether you are very rich or very poor. The tricky part about Medicare is sorting through the coverage it provides (the part A, B and D are seemingly the most important). When Medicare kicks in (for most individuals at age 65), you will likely want to supplement your coverage with a Medicare Supplement policy and there are many different flavors of supplemental policies and picking the right one will likely require you get advice from someone familiar with the different policy types. It has been said there are 10,000 Baby Boomers turning 65 every day, which might explain why the number of products are numerous. Now as for Medicaid, it is designed to help poor folks (tongue in cheek) as it is eligibility based. It can provide a wide variety of services for those who qualify to assist with the payment of medical bills including portions of the cost to stay in an assisted or skilled care facility. We have much written on this in the Special Report section of our website so head on over there (you can find it here) and do some reading.

As a general rule we answer this question as a resounding "NO" for a number of reasons. Our reasons are as follows: Putting a child's name on an account may constitute a gift causing many unintended consequences. Parents can lose control over the gifted asset, which means the child may abscond or take off with the money in the account. Yes, this does happen. It is likely to be considered a gift and may in rare cases require the filing of a gift tax return. If the placement of the name on the account is intended to be a gift, the gifted amount is subject to the child's valid creditor claims. Placing the name of child on an account is likely to be considered a transfer for purposes of Medicaid eligibility. Placing the account in joint tenancy (this is usually the way banks establish such accounts) means upon the parent's death the account would pass to the joint owner child, which may or may not be consistent with the parent's goals. If the primary reason for putting the child's name on the account is to help with the bill paying of the parent there are safer ways to do this. First, the account could be titled in the name of a trust and the child named as a trustee, with authority to write checks. The terms of the trust would outline ownership of the account as a trust asset and the trustee (child) would be subject to numerous laws regarding the use of the funds. Second, if it is imperative such an account be established, have the amount in the account limited so the risk is reduced on the availabillity of the funds to the child or the child's creditors. The accounts with the limited funds can be set up to receive funds by automatic bill pay making the flow of funds very efficient. Third, be clear with the bank where the account is established, the account is not to be held in joint tenancy and the child is acting in his or her fiduciary capacity as a agent under a power of attorney (which would need to be put in place prior to setting up the account). This should insure putting the name on the account is not considered a gift and may avoid many of the problems outlined above. It is not to say the child cannot abscond with the money, but if he or she does it will certainly make matters easier when the child must face the family or the court system if the funds disappear.