WHY WORKING HARD TO PROVIDE FOR YOUR FAMILY IS NOT ENOUGH?
As we go about our daily lives, there are always milestones along the way. Getting married, purchasing a home and having children are all major milestones that most adults have enjoyed. However, little thought is paid to these major events beyond the event itself. These are likely the most important things in our life, yet less than half of Americans have even executed a simple Will to care for and protect these things in the event of something happening to them. In reality, especially if you have children, a simple Will is only the tip of what is necessary for an adequate estate plan. Other considerations should include a Trust for the benefit and care of children and long-term health care in the event of disability. A good estate plan will also attempt to protect your assets for your family as opposed to transferring a large portion of it to the government in taxes.
Estate taxes are set to kick in at 1 million dollars in assets in 2011 (which is surprisingly easy to attain when one considers the value of a home, life insurance, etc.). With an estate tax approaching 55%, it is easy to see why protecting that estate from the government for the benefit of your family is a necessity, not a luxury. We all work for the benefit and enjoyment of our family, not Uncle Sam (especially considering he takes roughly 1/4 of our wages in taxes during our lives)! It certainly makes sense to make a small investment of time and resources now to protect the government from increasing their raid of your assets from 25% (income taxes) to 75% (income taxes plus estate taxes) or more if we do not have an adequate estate plan to protect it for our family from estate taxes.
In order to be comprehensive, a basic estate plan not only consists of a Will which provides for an executor to manage and disperse assets upon death, but it also should include advance directives in the case of disability. These are things like a Power of Attorney which directs an designated Agent to perform specific acts on your behalf in either a general or limited fashion; a Health Care Surrogate which is similar to the Power of Attorney in appointing an individual who will make decisions for you regarding your health care when you are unable to do so; a HIPPA designation indicating who can have access to your medical records; and a Living Will which expresses your wishes regarding medical treatments to be utilized in the event of your incapacity or in other specific circumstances.
A comprehensive estate plan will do much more to protect your assets, not just your person. Various forms of Trusts designed to protect your assets from taxes for the benefit of others are always an essential part of any effective estate plan. If you have children, the value of a Trust cannot be understated for its value in providing you piece of mind and security that your children will be cared for should something happen to you. While none of us like to think about things like death, putting off planning for the benefit of your family should a tragedy occur, can only magnify the loss and anguish that comes with a tragedy. How we provide for our family is, quite frankly, one of the few things we can control in the event of our death.
Ellmann & Ellmann, P.C., is a law firm providing legal services in protecting your assets through the use of Wills, Trusts, and estate planning. Feel free to call Ellmann & Ellmann, P.C. now at 303-814-2600 for a free consultation regarding your estate planning needs (including Wills and Trusts) in order to get you protected as quickly as possible. Even if you don’t call Ellmann & Ellmann, P.C., please consult a qualified attorney to ensure your assets are protected for the benefit of your family. Such planning is not a luxury, it is a necessity!
I. Colorado Estate Planning
When we hear the term estate planning, we often think of a “last will and testament” that transfers an estate when its holder dies. But a last will and testament is only one of several estate plans. If you need to plan your estate but you aren’t sure which plans to choose, consulting with a Colorado estate planning attorney at Ellmann P.C. will help to determine the best plans for your estate.
How are Estate Plans Chosen?
Different estate plans accomplish different things. Some common factors that influence which estate plans are chosen include:
- An estate’s monetary value
- Tax considerations
- The financial complexity of an estate
- Whether an estate holder wishes to begin dispensing its value presently or after his or her death
Concerning these factors and others, a Colorado estate planning attorney from Ellmann P.C. will work with estates of all sizes to ensure that (1) an estate retains as much value as possible during the transfer process, and (2) its heirs experience as little stress as possible during the transfer process. By consulting with Ellmann P.C., you can ensure that your estate retains its value and meets your family’s needs.
When is the Best Time to Plan an Estate?
Because none of us expect to die before our time, we often put off estate planning until we’re older. But the best way to financially protect your loved ones is to plan your estate now. With your estate fully planned, you can have the peace of knowing that, even if tragedy strikes, your family’s grief won’t be compounded by financial want. Regardless of your estate’s details, a Douglas County Colorado estate planning attorney from Ellmann P.C. will walk you through the planning process and develop a plan that meets your needs.
Is There a Level of Wealth Required for Estate Planning?
There are no wealth requirements for estate planning. However, your level of wealth may play a role in which planning measures are best for your estate.
Is an Old Estate Plan as Good as a New One?
According to a recent study, the average estate plan hasn’t been updated in nearly 20 years, meaning that the value of the average estate likely isn’t reflected by its estate plan. Once you have an estate plan, having it reviewed in the following instances will help to ensure its accuracy:
- You move to another state
- Your financial situation changes
- Your family situation changes
- 3-5 years pass since your estate was put in place or last reviewed
Making your estate a benefit and not a burden to your heirs requires careful planning. Whether you need your first estate plan or you need to update an old plan, consulting with a Douglas County Colorado estate planning attorney from Ellmann P.C. will provide you with the best Colorado estate planning advice. For more advice about estate planning, call us today.
II. Wills, Trusts, and Limited Family Partnerships
The most well known documents for transferring estates are wills and trusts. A will is a legal declaration that assigns a person or people to manage your estate, transferring its property to your heirs when you die. A trust is a legal arrangement where one or more trustees for the benefit of your heirs manage your estate. Unlike a will, a trust is usually effective immediately, and carries on in the event of your incapacity (i.e. inability to give informed consent) or death. Trusts and wills fall into two basic categories: simple and complex. Simple wills usually apply to estates whose value is low enough to avoid estate taxes, while complex wills usually apply to estates whose value makes them taxable.
2. Simple and Complex Trusts
Simple trusts, also known as bare trusts, must distribute all of their income and none of their principle until a certain condition set forth within the trust is met. Complex trusts are not bound to distribute their income and can distribute their principal. Trusts can be further categorized as revocable and irrevocable. A revocable trust can be modified and even terminated by its creator, while an irrevocable trust is often impossible to modify or terminate. Irrevocable trusts are often chosen for their tax benefits.
3. Family Limited Partnership
A family limited partnership allows family members with aligned financial interests to combine their resources to achieve lower accounting, legal, and investing expense. Family limited partnerships have two types of members: general partners, who are qualified to manage the partnership and its assets, and limited partners, who have financial interest in the partnership but not managerial capacity. Family limited partnerships are often used to mitigate estate tax on large estates.
To discuss whether a will, trust, limited family partnership, or any combination thereof is right for you, contact an experienced Colorado estate planning attorney at Ellmann P.C. today. Other Types of Wills and Trusts There are several types of wills and trusts that serve estates in different ways, such as joint wills, living trusts, and testamentary trusts, to name a few.
1. Joint Will
As its name implies, a joint will is one that two people make together, with each often eaving the other all of his or her estate. A joint will may also specify how an estate should be transferred when both persons are dead.
2. Living Trust
A living trust ensures the management of an estate upon its creator’s incapacitation or death. Living trusts are used to avoid probate costs, to reduce estate taxes, and to keep the details of an estate from probate records.
3. Testamentary Trust
Also known as a will trust, a testamentary trust is included as part of a will. Ideal for future estate distribution, testamentary trusts are often used to distribute an estate to minor heirs when they reach adulthood or attain another condition set forth in the trust. Wills and trusts can enhance each other to ensure that your estate is distributed equitably, punctually, economically, and in the best interest of your heirs. Wills trusts and estates is a broad area that requires an attorney to identify best estate options. For more information on which Colorado wills trusts and estates options are right for you, contact our experienced wills trusts and estates attorneys today.
III. Powers of Attorney
A power of attorney is a document that grants one party the authority to act on another party’s behalf in legal or business matters. In some cases, a power of attorney becomes effective immediately, while in others it becomes effective after a certain condition is met. Unless certain conditions are specified, a Colorado power of attorney becomes void upon the principal’s death. In estate planning, obtaining power of attorney is a common measure for handling medical and financial issues in the event of the principal’s incapacitation, which means that he or she is unable to give informed consent.
1. Medical Power of Attorney
Obtaining medical power of attorney lets you appoint people to make decisions on your behalf in the event you cannot give informed consent.
2. Financial Power of Attorney
Obtaining financial power of attorney lets you appoint people to make financial property decisions on your behalf in the event you cannot give informed consent. To prepare for the unexpected, having a power of attorney for both medical and financial issues is the best option.
General Versus Limited Power of Attorney
In some cases, a power of attorney agent presides over a principal’s general affairs, while in others the agent is limited to a specific capacity. A common example of a limited power of attorney agent is an agent who has estate expertise and makes certain property decisions on the principal’s behalf.
Durable Versus Non-durable Power of Attorney
For a power of attorney to remain in tact if you become incapacitated, it must be made “durable” by completing a document that establishes its durability. Having a durable medical and financial power of attorney could protect your dignity and your family’s financial interest if you become incapacitated.
Obtaining Power of Attorney in Colorado: FAQ
Who can Establish Power of Attorney?
Under Colorado law, any competent adult age 18 or older can establish power of attorney.
Who can serve as a General Power of Attorney Agent?
Under Colorado law, any competent adult age 21 or older can serve as a general power of attorney agent.
Can a Principal Terminate Power of Attorney?
As long as a principal is able to give informed consent, he or she can terminate a power of attorney at any time.
What if my Spouse is my Agent and we Divorce?
Under Colorado law, a spouse’s appointment as agent for his or her spouse is immediately terminated upon divorce.
Is it Legal to have More than One Power of Attorney Agent?
You can have more than one agent, although having a single agent could make matters less complicated if you become incapacitated. To preserve a power of attorney in the event of an agent’s resignation, termination or death, a better strategy is to establish a line of successor agents.
Does a Colorado Power of Attorney Hold Power in Other States?
If a Colorado Power of Attorney is legally executed in Colorado, it holds power in other states. Obtaining a power of attorney is a serious decision whose arrangements require the aid of an experienced estate attorney. To learn more about obtaining power of attorney in Colorado, contact Ellmann PC today.
IV. Advanced Health Care Directives
An advanced health care directive is a legal document that establishes what medical actions should be taken if you become incapacitated (i.e. unable to give informed consent). There are five types of advanced health care directives: living wills, CPR directives, medical power of attorney, disposition of last remains declarations, and oral and tissue donation declarations.
1. Living Will
A living will concerns the administration, withholding, or withdrawal of life sustaining medical treatment when
- A person is terminally ill and
- Is unconscious or incapable of making decisions due to incapacity for 7 consecutive days. A living will may also contain instructions concerning a persistent vegetative state that does not feature terminal illness. Considering the high cost of certain medical procedures and life support, having a living will could significantly impact the value of your estate.
2. CPR Directives
CPR treatments are resuscitation techniques that include chest compressions, breathing tubes, and other procedures that attempt to restore cardiac and/or pulmonary function. If you wish for these techniques not to be performed if your pulse or breathing ceases, you must obtain a CPR directive from a physician’s office or the Colorado Department of Health and have it signed by a physician following a consultation.
3. Medical Power of Attorney
A medical power of attorney establishes an agent that will make medical decisions on your behalf if you are unable to give informed consent. Unlike a living will, a medical power of attorney may apply to situations other than those defined by a terminal illness and 7 consecutive days of unconsciousness or incapacity. As with a living will, the agent’s authority is defined by your wishes, and the agent must honor the terms of your living will.
4. Disposition of Last Remains Declarations
A disposition of last remains declaration establishes how your body should be handled after you die. A disposition of last remains declaration may be included in any of the following documents:
- A will
- A living Will
- A prepaid funeral, burial, or cremation contract
- A medical power of attorney document
- A designated beneficiary agreement
Four matters commonly addressed in a disposition of last remains declaration are cremation, burial, entombment, and ceremonial rites.
5. Organ and Tissue Donation Declarations
An organ and tissue donation declaration is commonly established in one of three ways: on a driver’s license, in an individual document, or as part of a living will. An organ and tissue donation declaration also allows you to specify your organs’ destination and/or establish priority for certain individuals.
Deciding which advanced health care directives are right for you is an important decision that should be made with the assistance of an estate attorney who has experience with the aforementioned advanced health care directives. At Ellmann.
P.C., our years of experience in successfully addressing Colorado Advance Directive Living Will needs qualifies us as a top advanced health care directives law firm. To learn more about establishing a Colorado Advanced Directive Living Will, contact our experienced advanced directive living will attorneys today.
V. Guardianships and Conservatorships
When a person is incapable of giving informed consent and doesn’t have a durable medical or financial power of attorney, or when a minor is without a legal guardian, a guardianship and a conservatorship may be established. A guardianship establishes a guardian over a person’s health care and well being, while a conservatorship establishes a conservator over a person’s estate and financial affairs. Guardianships and conservatorships are established out of necessity, but the cost of establishing them can impact estate value to varying degrees. Therefore, the best strategy is to avoid guardianships and conservatorships by establishing a durable medical and financial power of attorney, respectively. Conservatorships can also be avoided through the creation of trusts and family limited partnerships. Although estate planning is preferable to guardianships and conservatorships, if your loved one can’t give informed consent and doesn’t have an estate plan in place, contacting an experienced guardianship and conservatorship attorney is the best way to protect your loved one’s well being and finances during a difficult time.
Colorado Guardianships and Conservatorships: FAQ
Who can serve as a Guardian/Conservator?
Under Colorado law, any competent adult who is 21 or older can serve as a guardian or conservator. However, long-term care providers cannot serve as a guardian/conservator to an adult for whom they provide care unless related to the person by blood, marriage, or adoption.
Concerning Informed Consent, how does Colorado Define “Incapacitation”?
Under Colorado law, a person who is incapacitated and therefore unable to give informed consent is a person “who is unable to effectively receive or evaluate information or make or communicate decisions to such an extent that the individual lacks the ability to satisfy essential requirements for physical health, safety, or self-care even with appropriate and reasonably available technological assistance.”
How Are Conservatorships/Guardianships Established?
Whether for an adult or a child, establishing a guardianship or a conservatorship requires proof that the need for the arrangements exists. In addition, proposed conservators and guardians are evaluated for their fitness for the position. For a full explanation of conservatorship and guardianship requirements, contact a Colorado guardianship and conservatorship attorney at Ellmann P.C. today.
Can Conservatorships/Guardianships be terminated?
Conservatorships and guardianships are terminated by the death of the ward. But they can also be terminated when the guardian or conservator is clearly and convincingly not serving the ward’s best interests.
Can a Guardian/Conservator of an Adult Live in a Different State than the Ward?
As long as a guardian or conservator can be contacted, they can live in a different state than the ward.
Can a Ward Have More than One Guardian?
A ward can have more than one guardian. This is often recommended in the event that one guardian becomes indisposed. If you’re currently searching for a conservatorship attorney in Colorado, contacting a guardianship and conservatorship attorney from Ellmann PC will give you the answers you need.