Olsen & Mahoney, LLP Denver Estate Planning Attorney | Wills & Trusts | Conservatorship2024-03-17T14:06:46Zhttps://www.mkolsenlaw.com/feed/atom/WordPress/wp-content/uploads/sites/1303123/2021/05/cropped-site-icon-32x32.jpgOn Behalf of Olsen & Mahoney, LLPhttps://www.mkolsenlaw.com/?p=483082024-03-17T14:06:46Z2024-03-17T14:06:46ZAny major changes may require a review
Numerous different types of changes can affect the usefulness and validity of estate planning documents. Changes to a family are a common reason to go back over estate planning documents. Having more children, losing a family member or going through a divorce are all experiences that can drastically alter someone's estate planning needs. People may need to update their documents to add or remove beneficiaries or appoint different people to positions of authority.
Financial changes can also be a reason to update estate planning documents. If someone acquires valuable new property, they may need to discuss what should happen to those assets after their passing. On the other hand, if they liquidate assets, they may need to remove those resources from their list of assets intended for other people after their death.
Even medical changes can require that someone update an estate plan. Someone facing declining health may want to create durable powers of attorney and a healthcare directive to ensure that they receive the right support.
Regular reviews are a smart practice
Drastic changes aren't always necessary for an estate plan to become outdated. Sometimes, the slow changes that occur over many years can also render existing estate planning documents outdated and ineffective.
It is often advisable to review an estate plan every few years or at least a couple of times per decade. If a testator notices outdated terms during a review, that may be a sign that it is time to make some updates to their documents. Maintaining updated estate planning paperwork can give people more peace of mind. Testators who commit to regular reviews and updates can maximize the benefits derived from the estate planning process.]]>On Behalf of Olsen & Mahoney, LLPhttps://www.mkolsenlaw.com/?p=483072024-02-16T15:04:46Z2024-02-16T15:04:46Zadministering the estate of a deceased person. This process aims to resolve any outstanding debts and distribute the estate’s remaining assets to heirs or beneficiaries. The probate petition serves as the formal request to open probate proceedings and appoint or approve a personal representative or executor to oversee the estate's administration.
Types of probate petitions
There are several types of probate petitions, each serving a specific purpose depending on the circumstances of the estate. A petition for formal probate is filed when there is a valid will that needs to be admitted to probate.
This petition requests the court to validate the will, appoint an executor named in the will (or personal representative if no executor is named) and oversee the distribution of assets according to the terms of the will.
When there is no dispute regarding the will's validity and the estate is relatively uncomplicated, a petition for informal probate may be filed. This simplified process allows for the swift administration of the estate without the need for extensive court involvement.
In cases where there is no valid will (intestate), or the named executor is unable or unwilling to serve, a petition for administration is filed. This petition requests the court to appoint a personal representative to administer the estate according to the state's intestacy laws.
Who can file a probate petition?
If the decedent left a valid will, the individual named as the executor therein has the primary authority to file a probate petition. The executor's role is to carry out the wishes outlined in the will and ensure the proper distribution of assets.
The surviving spouse also has the legal right to file a probate petition. This is especially pertinent if they are named as the executor in the will or stand to inherit a significant portion of the estate under state law.
If there is no valid will or the named executor cannot fulfill their duties, heirs or beneficiaries of the estate may petition the court to initiate probate proceedings. The court will appoint a personal representative to administer the estate in such cases.
Navigating the probate process can be daunting, especially in the midst of grief and loss. Yet, understanding the role of probate petitions and who can file them is essential for helping ensure a smooth and orderly administration of an estate.]]>On Behalf of Olsen & Mahoney, LLPhttps://www.mkolsenlaw.com/?p=483062024-01-18T20:21:09Z2024-01-18T20:21:09Zrevocable and irrevocable. While they both enable individuals to pass assets to their loved ones while bypassing probate, these categories of trusts are distinct in significant ways.
Revocable trusts
Revocable trusts, also known as living trusts, offer flexibility and control fr the individual creating the trust, known as the creator. They allow the creator to retain control over the assets during their lifetime. Revocable trusts are favored for the flexibility and the control they offer. They enable the creator to change beneficiaries, stipulations or even revoke the trust entirely. This adaptability makes them suitable for individuals whose circumstances may change, such as those with young families or evolving financial situations.
Additionally, revocable trusts can provide privacy and avoid probate, ensuring a smoother and more private transfer of assets. Upon the creator's death, a revocable trust typically becomes irrevocable, ensuring the assets are distributed according to the established terms.
Irrevocable trusts
An irrevocable trust, once created, generally can’t be altered or terminated by the creator. This type of trust involves permanently transferring assets, effectively removing them from the creator's estate. This rigidity is a notable drawback for individuals whose circumstances may change or who desire more control over their assets.
The primary advantage of an irrevocable trust is its ability to offer tax benefits and protect assets from creditors and legal judgments. Transferring assets out of the creator's estate reduces estate taxes and can provide significant protection for its beneficiaries. By reducing the creator’s assets, it can also help them to qualify for government benefits.
Including trusts in an estate plan enables a creator to manage the estate better. Working with someone familiar with their wishes can enable them to learn which specific trusts may make it easier to set everything up in enforceable ways.]]>On Behalf of Olsen & Mahoney, LLPhttps://www.mkolsenlaw.com/?p=483052023-12-15T20:26:59Z2023-12-15T20:26:59Zsupplemental needs trust, also known as a special needs trust, can potentially help augment someone's standard of living without depriving them of crucial benefits. Choosing the right trustee can be as important as properly funding that trust.
A trustee needs to be responsible
There are many tasks that a trustee will need to manage. They have a responsibility to oversee and protect investments. They also need to determine when distributions from the trust would be appropriate. They act as a gatekeeper preventing someone with special needs from misusing those resources and protecting them from the financial abuses of others.
Some people engage in misconduct when they stand to benefit financially from their role as trustee. Therefore, the trustee selected should be an individual capable of putting the beneficiary's needs ahead of their own wishes. They will also need to be organized and responsible enough to manage the resources in the trust indefinitely.
Ideally, they will also live nearby so that they can provide social support to the beneficiary in addition to protecting their financial resources. The trustee managing a supplemental needs trust has a major influence on the beneficiary's quality of life.
Sometimes, parents and other family members choose to hire a professional fiduciary because they don't want to cause conflict among their family members or worry that they don't know anyone who can adequately fill that role. Other times, people may name two or more people who will serve as co-trustees. They will share responsibility and serve as a form of protection against embezzlement and other potential misconduct.
Carefully considering candidates for the role of trustee when creating a supplemental needs trust is a crucial step for those who want to protect a vulnerable loved one.]]>On Behalf of Olsen & Mahoney, LLPhttps://www.mkolsenlaw.com/?p=482942023-11-05T16:50:35Z2023-11-05T16:50:35ZMoving forward
Ultimately, if the missing beneficiary or heir cannot be located, the assets that would ordinarily be theirs will be turned over to the state and held for 21 years. If they go unclaimed for that time, those assets become state property. Before that happens, however, you’re generally expected to show that you’ve made a significant effort to locate that person.
You may need to:
Contact the missing person’s known family members, friends and associates to see if they have any information about their whereabouts.
Contact their last known employer to see if they left any forwarding information for their paperwork or final pay – or if any of their work friends have stayed in touch.
Publish a notice in the local paper or in other public places in the hopes that they or someone they know will see it and respond.
Search online through social media platforms to see if you can locate them.
Checking property records and other public databases to see if they can reveal any clues about their location
There are even private investigation firms that specialize in locating missing beneficiaries or heirs. That being said, you should work closely with the probate court to make sure that your efforts are in line with the court’s expectations. You may also need the court’s consent to spend estate funds on the process. Seeking legal guidance proactively can help as well.]]>On Behalf of Olsen & Mahoney, LLPhttps://www.mkolsenlaw.com/?p=482922023-11-07T18:55:16Z2023-10-12T10:08:10Zcomponents of an estate plan before either concluding that you’re “done” estate planning or that you only need to draft a will once you get started crafting a plan.
Wills act as your posthumous voice
A will is a binding legal document that stipulates precisely how you want your assets dispersed. It is not just about material possessions. It can also direct custody decisions for minor children, detail preferences for pet care and indicate how you want your burial to be handled. Without a will, you’ll leave those choices to state laws, which might not be in line with your wishes.
Trusts offer nuanced asset management
Trusts go beyond the specifications of a will. They provide a mechanism to set terms concerning asset distribution or usage. For instance, a trust could be structured to fund a child's education, disbursed only when they reach college age. There are various types of trusts, each with unique attributes, that serve different needs.
Powers of attorney can be your decision anchor
It's not something you probably like to think about, but what if an accident or illness made you incapable of making decisions? A power of attorney designates a trusted individual to decide on your behalf in this scenario and others like it. Medical and financial powers of attorney each serve a specific purpose, better ensuring that someone you trust is at the helm if you can't be.
A letter of instruction is your personal touch
This isn't a formal legal document but a supplementary note to your will. It can contain wishes about your funeral or memorial service, the distribution of personal items not listed in your will or login details to online accounts. It's a way to provide personal instructions or wishes unsuitable for official documents.
Healthcare directives give clarity during challenging times
Often overlooked, this document expresses your preferences for medical treatment if you can't communicate. It can be as detailed as you wish, from the life-sustaining treatments you want used to your thoughts on pain management.
Setting up an estate plan might seem daunting, but it's critical for clarity and peace of mind for you and your loved ones. It can help to ensure that your desires are honored and can ease the decision-making burden on your loved ones during challenging times.]]>On Behalf of Olsen & Mahoney, LLPhttps://www.mkolsenlaw.com/?p=482912023-09-13T07:40:56Z2023-09-13T07:40:56ZPowers of attorney are among the many secondary documents that people can choose to add to estate plans. These documents allow someone to authorize a specific individual to manage matters on their behalf if they cannot communicate their wishes or lack the capacity to enforce their desires, if they are in a coma, for example. The best protection comes from having carefully-crafted documents that focus on an individual's unique needs. For example, the following three details can make all the difference regarding the usefulness of a power of attorney.
The agent selected
The agent or attorney-in-fact that someone names in their power of attorney will have a very important role. It will be their job to communicate with medical professionals or manage someone's finances. Those who are very cautious when selecting their agent or attorney-in-fact may feel safer because they trust the person who would assume control over theirs at Affairs in an emergency.
Language to make the documents durable
Powers of attorney are often only necessary for a short amount of time during which someone remains incapacitated. An agent might use their authority for a few weeks while someone remains in a medically-induced coma after suffering a brain injury, for example. However, some medical challenges will leave an individual permanently incapacitated. Including language to ensure that a power of attorney is durable and therefore retains its authority even after someone's permanent loss of testamentary capacity can help protect someone from guardianship and the loss of legal authority later in life.
Limits to the authority transferred
Boilerplate powers of attorney may extend direct control over most of someone's property to their agent or attorney-in-fact. The person drafting the documents always has the option of very carefully limiting what authority they grant their agent. They might provide access only to specific financial resources or only grant someone authority to fulfill specific tasks on their behalf. Those who worry that others might eventually misuse the authority granted in powers of attorney will often feel more confident about drafting these important documents if they include specific limitations on when and how someone utilizes their authority.
Thinking carefully about the details included in power of attorney paperwork may give someone more peace of mind and more protection than they would otherwise be able to benefit from, should an emergency arise.]]>On Behalf of Olsen & Mahoney, LLPhttps://www.mkolsenlaw.com/?p=482812023-08-22T20:41:24Z2023-08-22T20:41:24Zlacked the necessary capacity to draft legally binding documents. When could people initiate probate litigation because of their concerns about a testator's cognitive abilities?
After a major diagnosis
Often, the best evidence of reduced testamentary capacity comes from medical records. A diagnosis of dementia or other debilitating conditions could help build the claim that someone did not have the necessary testamentary capacity to create legally binding estate planning paperwork. Although a diagnosis alone doesn't automatically mean that someone's estate planning paperwork won't hold up under scrutiny, it can give someone the necessary grounds required to initiate litigation.
When someone struggled to live independently
Sometimes, older adults fearing the possibility of involuntary guardianship will intentionally avoid medical treatment. There might not be any official documentation of their declining cognitive abilities or a formal diagnosis of any specific condition. However, they may still demonstrate impaired abilities. Personal records including documentation of missed mortgage payments or other financial issues can help establish that someone struggled with reduced capacity after a certain point in life. Witness statements made by neighbors, family members and care professionals can also potentially go a long way toward establishing that someone lacked capacity at a specific point in time.
Those who are able to convince the courts that estate planning paperwork created or changed after a certain point was the result of someone's diminished capacity and not a reflection of their true wishes could potentially convince the courts to discount those documents or revisions in favor of pre-existing paperwork or intestate succession rules. Recognizing when family members may have grounds to initiate probate litigation may benefit those who question the accuracy of Colorado estate planning documents.]]>On Behalf of Olsen & Mahoney, LLPhttps://www.mkolsenlaw.com/?p=482802023-07-26T00:11:36Z2023-07-26T00:11:36ZTrusts
Only the property directly owned by an individual becomes part of their estate. Many people will intentionally transfer ownership of some of their assets to a trust so that those assets do not require probate oversight and will not be at risk of creditor claims. Trusts can reduce the likelihood of estate taxes and give someone more long-term control over the use of their property after their death.
Arrangements for direct transfer
There are several ways to keep specific property out of probate court. People may add transfer-on-death designations to financial accounts. They can execute deeds to add a loved one to the title for property ahead of time so that they assume full ownership when the co-owner dies. Arranging for the direct transfer of property at the time of someone's death to specific beneficiaries will diminish how much passes through probate court and allow some people to receive part of their inheritance quickly instead of waiting for probate proceedings.
Gifts before death
Making strategic gifts for multiple years gives a testator an opportunity to diminish their personal holdings while also witnessing their loved ones enjoying their inheritances. Annual gifts can enhance beneficiaries' current standard of living while simultaneously diminishing the value of what will pass through probate court.
Those who plan carefully may have an easier time maximizing what their beneficiaries receive, qualifying for state aid when necessary and avoiding taxes after they die. Keeping certain property out of probate court is often a priority for those with a specific legacy in mind or enough resources to worry about taxes and family conflicts. Seeking legal guidance can help an individual to accomplish this goal.]]>On Behalf of Olsen & Mahoney, LLPhttps://www.mkolsenlaw.com/?p=482792023-06-26T14:23:56Z2023-06-26T14:23:56Zintestacy laws automatically step in to manage the deceased's estate. These laws typically favor someone’s closest living relatives. A surviving spouse, for instance, is generally entitled to the bulk of the estate or, in some cases, the entire estate. The estate is often distributed among the spouse and the children if there are surviving children.
No immediate family members
When no immediate family members are left to receive assets, intestacy laws usually dictate that the estate gets distributed to more distant relatives, such as cousins, uncles, aunts or the offspring of these relatives. When no living relatives can be traced, the deceased's estate usually reverts to the state, a process known as escheat.
The probate process
A death without a will in place necessitates probate, a court-supervised process. Probate can be long, complex and potentially costly. It involves determining the estate's value, settling outstanding debts and taxes and distributing the remaining assets per the state's intestacy laws.
Guardianship issues
The lack of a will can complicate guardianship issues, particularly when the deceased has left minor children behind. Without a will appointing a guardian, the court has to make this decision, hoping to choose a family member or a close friend willing and capable of caring for the children.
Dying without a will in place can make things more difficult for your family members when they’re already going through a lot. Instead of taking the chance that your estate will be distributed in a way that’s not what you want, you can set up a comprehensive estate plan. Explaining your wishes and considering your available options can help you determine the most effective way to handle your estate plan.]]>