Boulder Estate Planning Legal Blog

How To Avoid Probate with a Colorado Estate Planning Lawyer

August 17, 2023 | by Braverman Law Group

If a person has a will, their beneficiaries often need to go through probate proceedings to receive the property allotted to them in the will. In probate proceedings, a court appoints a personal representative to administer the person’s estate to the intended beneficiaries. As a result, before receiving a single asset, the beneficiaries must participate in a long, complex, and confusing process. Thankfully, Colorado provides a few steps people can take while they are alive to spare their beneficiaries from probate procedures.

How Can You Avoid Probate in Colorado?

One way to prevent your beneficiaries from going to probate court is by creating a living trust. This document allows you to designate a succeeding trustee to transfer assets to your beneficiaries after death. Colorado law allows you to make living trusts for nearly any type of asset, including houses and vehicles, as well as bank accounts. To make a living trust, you can transfer ownership of your property to yourself as the living trustee of your estate. Then, with the help of an attorney, you can create a document that designates another person to take over as trustee after death. That succeeding trustee can then transfer your property to the trust beneficiaries without going through probate court.

Considerations for Including Friends in Wills and Estate Planning

July 31, 2023 | by Braverman Law Group

In the event that an individual does not leave a will to determine the division of their property and assets, their estate will go through the intestate succession process designated in their state. Intestate succession is a legal process that comes into play when someone passes away without leaving behind a valid will or other legally binding document dictating how their assets and property should be distributed. Instead, the distribution of assets is determined by the laws of intestacy in the state where the person passed away. The laws of intestacy establish a specific order of priority for the distribution of assets. Typically, a surviving spouse and children are given priority, followed by other close relatives, such as parents and siblings. If there are no surviving relatives, the assets may escheat to the state.

What is a Will?

A will is a legal document dedicated to establishing and coordinating a person’s wishes regarding the distribution of their assets and property as well as the care and guardians of their minor children after they pass. A will is the most established manner of ensuring that an individual’s wishes regarding each of those issues are accurately and dutifully carried out following their passing. Wills are helpful for reducing conflict between an individual’s heirs, making sure that the division of assets is a smooth process, and easing tension.

Navigating the Inclusion of Friends in Estate Planning

Passing assets to friends and non-family members can be surprisingly difficult for a number of reasons. The current estate planning landscape is heavily skewed toward the distribution of assets towards family members and traditional heirs and does not always provide a straightforward path for those without children or spouses. As a result, some organizations suggest avoiding using wills for such transfers of assets altogether and instead giving the assets to friends while still alive and sound of mind so that heirs and family members cannot challenge the transfer in the future.

What Happens if you Die Without a Will? Understanding Intestate Succession in Colorado

July 14, 2023 | by Braverman Law Group

A will is a legal document dedicated to setting forth an individual’s wishes regarding the distribution of their property and assets as well as the care of their minor children. A will is the most established manner of ensuring that an individual’s wishes on those matters are accurately carried out. Wills are also helpful for an individual’s heirs, making sure that the division of assets is a smooth process.

What is Interstate Succession?

In Colorado, if you die without a will, your assets are distributed to your closest relatives under the Colorado interstate succession laws. In various states, the interstate succession process occurs when someone without a valid will or other legal declaration passes away. The court distributes their property according to the current state laws rather than a pre-existing plan prepared by the decedent or with input from those closest to them.

Which Assets Pass Through Interstate Succession?

In Colorado, the only assets that pass through probate are impacted by interstate succession laws. Subsequently, a large variety of valuable assets are not subject to interstate succession laws as they do not go through probate. Common examples of items that do not pass through probate and are not impacted by the interstate succession process include (1) property transferred to a living trust, (2) life insurance proceeds with named beneficiaries, (3) IRA, 401(k), and other retirement account funds with named beneficiaries, (4) securities held in transfer-on-death accounts, (5) real estate with a transfer-on-death deed, (6) vehicles with transfer-on-death registration, (7) payable-on-death bank accounts, or (8) property owned with someone else in joint tenancy or tenancy by the entirety. Such assets will pass to the surviving co-owner(s) or named beneficiaries regardless of the existence of the existence of a will. One exception to this rule is if no will exists, and the named beneficiaries are no longer alive to accept the assets, the property could end up being transferred according to the interstate succession process.

How an Irrevocable Trust Can Be Incorporated into an Estate Plan

June 24, 2023 | by Braverman Law Group

Trusts are a growing tool when it comes to estate planning. As a result, trust usage is increasing throughout the nation. Trusts offer many benefits when it comes to asset distribution, but also have limitations that other estate planning methods don’t have. Trusts allow for great specificity regarding how, when, and to whom assets are distributed. Additionally, trusts come in a wide variety of categories and subcategories dedicated to particular estate planning goals, such as charitable giving or tax reduction.

A trust not only designates who may benefit from the funds or resources in the trust, but addresses situations of incapacity, such as strokes, dementia, or Alzheimer’s. Those at risk of such circumstances may want to consider utilizing trusts to ensure that their resources and funds are preserved, managed, and spent in a manner that conforms to their wishes while in the care of loved ones or healthcare professionals.

What are Irrevocable Trusts?

Irrevocable trusts are a specific type of trust that cannot be modified, amended, or terminated without the permission of the grantor’s beneficiary or by the order of a court. While the precise rules governing irrevocable trusts vary from state to state, the grantor, having essentially transferred full ownership of assets into the irrevocable trust, legally removes their rights of ownership to the assets and the trust in this process.

Selecting A Good Trustee to Manage Your Family’s Trust

June 13, 2023 | by Braverman Law Group

When it comes to estate planning, selecting a proper and capable trustee is one of the most important steps in the process. A trustee takes legal ownership of trust assets, manages the trust, and is responsible for carrying out the purpose of the trust.

Important Factors for Choosing a Trustee

There are several important things to consider when assigning a trustee. Most people choose a friend, family member, attorney, or corporate trustee to oversee their assets. Before making the final choice, consider the following things: (1) The potential trustee’s availability, (2) their ability to be responsible, (3) their level of expertise, and (4) any costs associated with choosing that trustee. Weighing these factors is important and can have a big impact on your asset management in the future.

Availability

Make sure that you and the future trustee are on the same page when it comes to the time commitment involved with being a trustee. Depending on your assets and the structure and type of trust you utilize, serving as a trustee can be demanding. Trustees may be required to spend substantial amounts of time processing requests, mediating between parties, and making decisions regarding the trust. Not everyone has the time or ability to be fully available for such a process, and you don’t want that to negatively impact the running of your trust.

Contesting a Will in Colorado

May 31, 2023 | by Braverman Law Group

A will is a legal document dedicated to setting forth an individual’s wishes regarding the distribution of their property and assets as well as the care of their minor children. A will is the most established manner of ensuring that an individual’s wishes on those matters are accurately carried out. Wills are also helpful for an individual’s heirs, making sure that the division of assets is a smooth process.

Initiating a Claim to Contest a Will

A will can be contested for a number of reasons, including but not limited to when an individual believes they should have been a beneficiary of the will in question. Contesting a will is an expensive and formal process and requires evidence and expertise. The grounds for contesting a will vary to some degree from state to state, but the driving force behind each system is similar. To legally contest a will, an individual must have otherwise benefited from the will. The most common manner in which this manifests is with the children of a deceased person. Other common instances also include when an individual did not have children and extended family members litigate their alleged claims to the estate.

The process begins when a will is filed in probate court, resulting in the interested parties receiving notice. Once the process begins, the interested parties must object within the time period stipulated by the relevant jurisdiction. The court then determines if the will is valid and determines heirs, beneficiaries, worth, and assets.

Contesting Trusts and Actions of Trustees

May 10, 2023 | by Braverman Law Group

Trusts are increasingly utilized in Colorado and throughout the nation. Trusts offer several benefits in estate planning and asset distribution. Trusts allow for great specificity regarding how, when, and to whom assets are distributed. Additionally, there is a wide variety of special-use trusts dedicated to particular estate planning coals, such as charitable giving or tax reduction.

However, a trust not only designates who may benefit from the funds or resources in the trust but addresses situations of incapacity, such as strokes, dementia, or Alzheimer’s. Those at risk of such circumstances may want to consider utilizing trusts to ensure that their resources and funds are preserved, managed, and spent in a manner that conforms to their wishes while in the care of loved ones or healthcare professionals.

Contesting a Trust

Similarly to a will, trusts can be contested for a number of reasons, including but not limited to a lack of testamentary capacity, undue influence, or a lack of requisite formalities. Additionally, beneficiaries may challenge a trustee’s actions for violating the terms or purpose of a trust. Many, if not all, settlors will utilize mechanisms to limit challenges, such as inserting no-contest clauses in the trust that sever a beneficiary’s interest if they unsuccessfully challenge the trust.

How to Use an “Inheritor’s Trust” to Protect Your Heirs’ Inheritance

April 30, 2023 | by Braverman Law Group

Estate planning strategies and the creation of trusts are often used to protect a family’s assets from high tax burdens or other preventable attacks on an estate. The most common way for anyone seeking to control the division of their estate is by drafting a will, which mandates how the estate assets are divided. Some people instead choose to place their money into a trust that may offer additional protection for the assets in an estate. Traditionally, parents planning a bequest to their children or grandchildren might set up a trust themselves for the heirs’ benefit; however, there are alternatives to a benefactor-initiated trust that may work better for your family.

An “inheritor’s trust” is a trust that is set up by the heirs to an estate before the death of a benefactor. Using an inheritor’s trust can further help protect the assets of an estate from creditors, divorcing spouses, and high tax burdens. Unlike traditional trust instruments, which are designed from the top down, an inheritor’s trust is designed to be initiated from the bottom up. This change represents a growing movement for beneficiaries and heirs to an estate to take a more active role in managing the estate while the benefactor is still alive.

Although inheritors need not know the exact amount of their inheritance to create an inheritor’s trust, the trust still must be created with the consent of the benefactor. This could create uncomfortable conversations, as the benefactor must be alive at the time of its creation for the trust to function properly. If properly created, an inheritor trust can protect a family’s assets for generations as the trust continues to function, even as the generations pass. Anyone seeking to leave a legacy for their children or other heirs should research and ask questions about the possibility of an inheritor’s trust to manage and protect their assets most effectively.

Exploring the Financial Advantages of Nevada “Incomplete Gift, Nongrantor Trust” (NINGs)

April 11, 2023 | by Braverman Law Group

As of 2022, Colorado features a 4.40% state income tax rate. According to the Tax Foundation, state income tax rates throughout the nation can run as high as 13.30% in California, or as low as 0% in Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming. Some states are known for promoting favorable asset protection laws designed to attract wealthy families and individuals from across the country and the world.

Nevada is one such state looking for innovative ways to help families and individuals protect and save their wealth. One such method and tool that Nevada has introduced is the Nevada Incomplete Non-Grantor Trust (NING). NINGs are not a one size fits all solution to addressing state income tax issues but can be highly advantageous in certain circumstances.

What is a NING?

A NING is a trust in which income is placed to be paid out to beneficiaries living in a state with no income tax or an income tax with lower rates. In order to avoid state income tax, the trust must not be categorized as a “grantor trust” under the income tax laws of the state in which the settlor resides. Further, to avoid any federal gift tax issues, trust contributions must not be treated as gifts for federal gift tax purposes. Transfers that are not gifts are often referred to as “incomplete gifts.”

Reasons Why Will and Estate Planning Means You Care for Your Loved Ones

March 21, 2023 | by Braverman Law Group

When a loved one passes away unexpectedly, it can be a shocking, emotionally intense, and confusing time. The confusion may stem from figuring out what happens next. When it comes to figuring out who has legal rights to a deceased person’s property, it is not as straightforward as one may think. According to a recent CNBC news report, two-thirds of adults living in the United States have no will. On the one hand, different states have different laws when it comes to will and estate planning. In addition, after a loved one passes without a will, it can cause intense complications between family members and potential heirs because of varying goals.

The probate court is a section of the court system that oversees the execution of wills and the handling of estates, conservatorships, and guardianships. In an intestate situation or a situation where someone has died without a will, the matter will likely be handled in probate court. If a person passes away without a will or intestate, the probate court decides who gets the deceased person’s property, although it is up to the survivors to claim their right to the property. When there is no will in place, you can never be sure how a court will decide to distribute the deceased person’s property.

In an intestate situation, the probate court appoints an executor for the estate. This executor will follow the laws of the state where the deceased person lived. This process may involve identifying the kinship of the deceased and may cause the children to have the burden of proving that they are the offspring of the deceased. The family members also will need to locate the records of the deceased, including proof of residency, amongst other records. The process can take a lot of time.