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Golden Estate Planning Blog

About legacy planning

Colorado residents may already be aware that estate planning can be used to make sure that assets are managed according to specific wishes. If individuals want to ensure that they leave behind a certain type of legacy, however, they should understand the principle behind legacy planning.

Creating and leaving a legacy is not egotistical. Some people may have an issue with the idea that something that they have accomplished may be worthy enough to be remembered. They might also perceive legacy planning as drawing undue attention to themselves. However, the basis of legacy planning is that an enjoyable and fulfilling life is attainable by everyone and can be reached by individuals putting forth their best efforts.

How probate may impact smaller estates

There are many reasons why a person in Colorado would not want to go through the probate process. Regardless of how large or small an estate is, there may be ways to help a person accomplish that goal. For instance, using a transferable on death (TOD) deed could turn homes into assets that don't have to go through probate.

This is because they become property with a beneficiary designation as opposed to property titled in a single person's name. If such a deed is created, it does not provide an ownership interest to the beneficiary while the property owner is still alive. Adding a beneficiary designation to a car's title could also ensure that it doesn't need to be dealt with through probate. A call to the DMV may make it easier to create a proper designation.

Blended families require thoughtful legal action

With today's higher divorce rate, and the decline in so-called nuclear families, that has changed. It is completely common for people with children from previous marriages to marry partners who also have children from their previous marriages.

The question is, who gets what? This is the overarching question in estate law: how to put life assets in the hands of all the people you have loved.

Divorce creates urgent need to update estate plans

The estate plans of people in Colorado often include spouses as beneficiaries. A divorce filing, however, triggers the need for people to review the terms of their estate plans in light of the ending relationship. Sudden death or incapacity could cause an ex-spouse to receive distributions or even be in charge of someone's medical decisions.

The case of a man who died two days before a court processed his final divorce papers illustrates the hazards of leaving a former partner as a named beneficiary. The man had received a multi-million-dollar accident settlement prior to his marriage. The prenuptial agreement designated his settlement money as his sole nonmarital property. He placed the money in a trust. At a later point, he made his wife an 80 percent beneficiary of the trust. He assigned the remaining 20 percent to other family members.

How decanted trusts work

Decanting a trust refers to creating a second trust to revise the terms of an irrevocable trust. Under the original terms of an irrevocable trust, the assets are moved completely out of the control of the grantor and the trust cannot be altered or canceled. However, 25 states now allow decanting of an irrevocable trust, and Colorado is one of them.

There are several reasons why it might be necessary to decant an irrevocable trust. The trust could be set up to distribute payments to the beneficiary at certain ages. If a beneficiary's life situation changes because of bankruptcy, divorce or addiction, the trust may need to be altered. The trustee might then create a second trust in which they have the discretion to distribute payments to the beneficiary.

Estate plans are for more than just the rich

Colorado residents might not think that they need a will if they don't have much money or a lot of assets. What they and others may not understand is that a will is designed to help survivors settle an estate regardless of its size. As a general rule, anyone who owns anything has an estate that will need to be settled after passing on.

A will could be beneficial because it covers assets that may not be transferred by a beneficiary designation or other means. Although wills cannot avoid probate, they offer a guide as to how a person wishes to handle assets and other issues that could arise. In many cases, it may be a good idea for a person to create a will as soon as he or she reaches the age of majority.

Hugh Hefner's estate plan

Many people remember Hugh Hefner for his Playboy enterprise and his fondness for pinups. However, it should also be noted that he had an excellent business sense when it came to planning his estate. Careful estate planning is important for anyone, even for Colorado residents who do not own a global enterprise or have an estate as large as Hefner's.

With the rise of digital publishing, many print magazines saw their sales decline. After Hefner partnered with a private equity firm to buy the Playboy stock in 2011, he walked away with a 37 percent ownership stake, an employment agreement that paid him $1 million per year and gave him editorial control over the Playboy brand and the right to live in the Playboy mansion nearly rent free for life.

Making the decision to sign a POA document

Many Colorado citizens may consider whether signing a power of attorney document is in their best interests, particularly as they age and accumulate wealth. A financial power of attorney grants an "agent" the authority to make financial decisions for the "principal". The principal can decide what types of financial decisions the agent is authorized to make on his or her behalf.

The decision to sign a power of attorney document should not be taken lightly. It is important for individuals who are considering granting another person this type of authority over their finances to carefully consider their options and make sure that they do not feel pressured into signing the document. Someone who is considering signing a power of attorney document might also consider having a professional, such as an estate planning attorney or a financial adviser, look over the document.

Being an executor

Many people living in Colorado will one day be asked to be the executor of an estate. While most people consider this an honor, it is also a huge responsibility. An executor is responsible for the total management of an estate, beginning with finding a will, notifying pertinent individuals, agencies and businesses of the death, and then ensuring that the deceased's wishes are carried out.

Since executors are often not legal professionals and, in many cases, have never served in this role before, the duties may seem overwhelming. In general, however, people may be able to better manage their responsibilities with a bit of planning, as well as knowledge of what is expected of them.

Advantages of planned giving in an estate plan

One option for Colorado residents who are setting up their estate plan is planned giving. Planned giving refers to setting up a charitable donation during a person's lifetime. A planned gift offers a number of advantages including the ability to set up a family tradition of philanthropic giving.

Because the planning occurs while a person is still alive, there is the opportunity to sit down with both the nonprofit and family members to talk about their needs and design the estate plan accordingly. It also takes away the guesswork for family members both about what they will be receiving and the donor's wishes for how assets will be distributed. Advance planning can bring peace of mind to both the donor and family members since the paperwork will all be in place.

Contact Information

Samuel J. Owen, P.C.
350 Indiana Street
Suite 150
Golden, CO 80401

Phone: 303-647-5099
Toll Free: 888-575-9349
Fax: 303-271-0101
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