Wills
A will is a legal document that states how an individual wishes to distribute their assets after death. In order for a will to be valid in the state of Colorado, it must be in writing, signed by the creator of the will (testator), and witnessed by at least two individuals who are not beneficiaries of the will. The main function of a will is to handle the distribution of assets and name an executor who will manage the estate.
Benefits of having a will
There are a number of benefits to having a will. A will allows an individual to clearly state what assets will be distributed to certain beneficiaries and family members. Having this information clearly stated in a will often helps prevent disputes among the beneficiaries. A will also allows parents who have children under the age of 18 to appoint a legal guardian. It often provides great peace of mind for an individual to know that their minor children will be taken care of by a trusted guardian.
In some cases, beneficiaries may choose to contest a will if they feel it is unfair. Common reasons for contesting a will include:
- Lack of capacity by the testator: If the testator did not possess the mental capacity to understand the implications of their will, it is common for the will to be contested. It is necessary that the creator of the will fully understand their actions and the implications of their will.
- Undue Influence: If it is believed that the testator was influenced by an outside party to change their will in a particular way, this could lead to a will contest. Those who contest the will may claim that the testator was put under increased pressure to alter the will in a way that does not reflect their true intentions. Wills are often contested for undue influence if one beneficiary is disproportionately favored or if the testator is particularly vulnerable.
- Fraud: A will may be contested due to fraud if it is believed that the testator was either deceived into signing, was given false information while creating the will, or if a signature was forged.
- Improper execution: A will is required to be signed by the testator with two other parties according to Colorado laws, and it is also required to be properly notarized. A will can be challenged if proper execution is not undertaken.
- Errors in the will: The will can be challenged in case the testator has made an error or was under a misapprehension as to the facts. Beneficiaries can also contest if there are other existing wills with conflicting terms. Most of the time, in such cases, the most recently drafted will will be upheld over the others.
- Revocation: The will may be contested if it is discovered that the testator revoked the will before death. This occurs when the testator prepares a new will to replace the earlier one, physically destroys the existing will, or makes a written statement of revocation of the will.
Without a will, the state may intervene and decide how to distribute an individual’s assets after they die. This may lead to disputes among family members or beneficiaries and may also not be in the best interest of the deceased.
Wills are fairly flexible and simple to amend if circumstances change. If you are in the process of estate planning and are in need of legal support, we strongly recommend that you reach out to the experienced team of estate planning attorneys at Evans Case. We will ensure that your needs and wishes are met and help you plan for the future.
Trusts
A trust differs from a will in that it typically does not require
probate and allows an individual to manage and distribute their assets while they are still alive. Trusts are designed to allow a third party trustee to manage the assets on the beneficiaries’ behalf. There are a number of different reasons why trusts can prove to be beneficial, including:
Avoiding Probate
Probate is the process of authenticating a person's will after death and transferring their property. It is slow, expensive, and public. One big reason people use a trust is that the property in the trust completely avoids probate. The point is that, unlike under a will, the beneficiaries can get their inheritance more quickly and outside the court system. In addition, avoidance of probate avoids attorney fees and administrative costs, thus saving more of the value of the estate for the beneficiaries.
Private Estate Administration
Wills are public documents after the probate process has been carried out. On the other hand, a trust provides a level of privacy because the terms of the trust, such as identity of the beneficiaries and nature and value of the assets, remain confidential. This is particularly useful to those who want to keep the details of their estate and the inheritances of their beneficiaries as private as possible. This privacy can prevent disputes among relatives or even with any potential challengers from outside who could contest the way the assets have been divided.
Protection and Management of Assets
Trusts offer protection of assets from creditors, lawsuits, or other claims that may be presently existing, or which may arise. This is very true for irrevocable trusts, where control over the assets is given up by the grantor to protect them against lawsuits. Moreover, the terms of a trust can provide for the ongoing management of assets, which would come in handy if the beneficiaries are minors, have special needs, or just happen to be inexperienced in handling finances. The named trustee can manage the trust assets according to the grantor's wishes, which are to be conserved and put to good use over time.
Distribution Flexibility
Trusts provide immense flexibility on how and when their assets are distributed to the beneficiaries. For instance, the grantor can provide that the beneficiaries shall receive their inheritance at specific ages, upon reaching certain stages of life, or upon the happening of certain conditions, such as after completing higher education. This flexibility enables the grantor to ensure that the beneficiaries are ready and capable of managing their inheritance responsibly. Trusts can also be applied in cases where continued periodic support—like regular payments or allowances—is preferred to distribution in bulk, more so if such a beneficiary is not financially savvy or requires support for a period of time.
The inclusion of such benefits can make trusts a flexible and powerful tool in estate planning, ensuring peace of mind, asset protection, and certainty that the wishes of the grantor are regarded and carried out with efficiency and in private.
Unlike wills, which become public record, trusts allow for a much more private distribution of assets. They offer several advantages that may be useful depending on the circumstances of your estate. There are multiple different types of trusts, and an estate planning attorney will be able to offer assistance in choosing the one that is best for you. An attorney will also be able to help you draft legally sound documents and assist in properly transferring assets into the trust. Some of the different kinds of trusts include:
- Revocable Trusts: A revocable trust is flexible and can be altered by the grantor during their lifetime. One of the main advantages of a revocable trust is that it often helps avoid probate after death.
- Irrevocable Trusts: An irrevocable trust is not able to be amended without the consent of the beneficiaries. The main advantage of an irrevocable trust is that it protects assets and allows for potential tax benefits.
- Special Needs Trust: A special needs trust provides support for beneficiaries with disabilities while allowing them to maintain their eligibility for government benefits as well.
- Charitable Trusts: A charitable trust is an irrevocable trust created to benefit a charitable organization. A big advantage of these trusts is that they often offer generous tax benefits for the grantor.
- Life Insurance Trusts: A life insurance trust helps manage life insurance proceeds that often go toward paying estate taxes. It is an irrevocable trust and cannot be amended.
Revocable trusts offer flexibility and control the grantor, but do not provide great asset protection or tax benefits. Irrevocable trusts, on the other hand, provide substantial asset protection and tax benefits, though require the grantor to give up control over their assets. An estate planning attorney will be able to provide valuable insight into what kind of trust is best for your needs. The best kind of trust for you is dependent on your goals and wishes.
Living Wills and Health Care Directives
A living will is a document that states an individual's preferences for healthcare and medical treatment if they are unable to make a decision themselves. If they are unable to clearly communicate their wishes, a living will ensures that their wishes are respected. A living will is especially useful in situations where an individual is unable to advocate for themselves, as it provides a clear outline for their preferences regarding medical treatment, pain management, and life-sustaining treatments. It also relieves family and loved ones of having to make any difficult decisions on their behalf.
Health Care Directives
Aside from a living will, other health care directives include:
Durable Medical Power of Attorney: Through this option, a person can assign his or her powers to another reliable individual for medical decisions in the event of his or her incapacitation.
HIPAA Authorization and Release Forms: This form grants permission to have access to the individual's medical information to the persons indicated therein for execution of informed decisions.
Power of Attorney
A Power of Attorney is a legal document wherein one person, termed the "agent" or "attorney-in-fact," is granted authority to act on behalf of another, termed the "principal." The extent of that authority will depend on the type of Power of Attorney and any specific limitations described within the document. There are several types of POAs, including:
General Power of Attorney: The general power of attorney grants powers to the agent, or person acting as an agent on behalf of the principal, with respect to his/her financial and legal matters. It is mostly used during a specific period or for some certain purpose; it becomes invalid if the principal becomes incapacitated.
Durable Power of Attorney: Durable power of attorney remains effective even if the principal is declared incompetent; an agent will be unrestricted in continuing the management of the principal's affairs. This is particularly useful for long-term planning.
Limited or Special Power of Attorney: The agent is appointed to do specific tasks or transactions, like selling a property or running a business. It is limited in its scope and duration.
Medical or Healthcare Power of Attorney: This empowers the agent to make decisions regarding the principal's health in case he, himself is unable to do so. It is usually combined with a living will or other healthcare directives.
There are a number of reasons why having a Power of Attorney is important:
Assuring decisions are made by a person of trust: A power of attorney allows you to designate somebody whom you trust enough to make decisions on your behalf, thus ensuring that your financial, legal, and healthcare matters are managed in accordance with your wishes.
Avoiding Court-Appointed Guardianship: If you do not have a power of attorney, then in the event that you become incapacitated, it will be left to the court's discretion to appoint a guardian or conservator who will take care of your matters. This is a time-consuming and expensive process, and the appointed guardian may be a person you would not have chosen for this position.
Flexibility and Control: A power of attorney can be drafted to grant as much or as little authority as desired; therefore, you hold the power of determining the powers and limitations granted to and imposed upon the agent.
Choosing the Right Agent
The choice of the right person to act on your behalf pursuant to a power of attorney is a critical decision. Factors to be considered include:
Trustworthiness: An agent in whom you have complete trust that he/she will do what is in your best interest and in accordance with your wishes during the estate litigation process.
Financial Acumen: In the case of financial POAs, it would be somebody who is financially savvy and in a position to manage your assets responsibly.
Willingness and Availability: Your agent should be willing and available to take over this area of your life since the responsibilities may become too much for him/her at times.
Knowledge of Your Values and Wishes: Your agent should be aware of most of your preferences, values, and your long-term goals so that he/she makes decisions based on your desires.
An attorney's involvement in the drafting process will ensure that the POA documents are legally sound and truly reflect your instructions. They can also advise about choosing an appropriate agent and explain the responsibilities and legal implications that come with being such an agent.
Success Stories
Renee hired us to help her elderly, childless aunts ensure their assets would pass on to designated beneficiaries uncontested. We clearly outlined how
Colorado elder law applied to their estates, giving everyone peace of mind. The aunts have since passed away and their estates have passed on to their intended heirs with no complications.
We handled an estate where a caregiver had coerced the decedent into transferring certain assets into both of their names jointly. Through litigation, we were able to get an order from the Court requiring the transfer of certain assets back into the name of the Trust and requiring the caregiver to pay our attorney fees.
Schedule an appointment with one of our experienced estate planning attorneys if you are considering estate litigation..
Contact Evans Case Today for Your Estate Planning Needs
Estate planning is a complex legal process that aims to ensure that your best wishes are met after your death. It is an essential step to making sure that your assets are properly distributed and that your financial and health related decisions are respected if you are unable to make them yourself. An estate planning attorney will be able to help you manage your estate and make sure that your best wishes are met through the estate litigation process. If you are beginning the estate planning process and are seeking legal support, do not hesitate to
contact our team of attorneys at Evans Case today. Come see why we are trusted to offer estate planning legal services to clients all throughout the Denver area.
