The Core Design in Plain Terms

A §530A account is an IRA-style custodial account for a child under age 18 who has a Social Security number. Contributions can be made by parents, relatives, the child, and—crucially—employers. Earnings accumulate tax free, with investment menus limited to low-fee index mutual funds and ETFs. Total annual fund expenses are capped at 0.10 percent of assets. Distributions are tightly restricted before age 18, and early withdrawals after 18 generally trigger a 10 percent penalty unless they meet specified exceptions, notably certain education and first-home costs.

For U.S.-citizen babies born between January 1, 2025 and December 31, 2028, Treasury will deposit a one-time $1,000 “seed” into a §530A account as part of a pilot intended to jump-start long-term compounding.

Annual Limits and the Employer Angle

Two caps matter:

• Total contributions to a child’s account are $5,000 per year, indexed for inflation after 2027.
• Employer contributions up to $2,500 may be made tax free to the employee, starting July 2026, if the employer follows program rules (written plan, employee notices, and nondiscrimination standards similar to dependent care assistance programs).

The employer exclusion rides on a new Code provision and, notably, these programs are not ERISA plans, reducing compliance complexity compared with retirement benefits—though employers still must satisfy nondiscrimination and communication duties. Expect additional Treasury guidance on open questions, for example, coordination where an employee has multiple eligible children.

How §530A Compares to Existing Tools

• 529 plans remain the heavy lifter for education. 529s allow much larger contributions, tax-free earnings, and penalty-free withdrawals for qualified education, with growing flexibility for limited Roth rollovers. §530A is narrower but adds an employer-funded path and a universal newborn seed for eligible births. Nothing prevents a family from using both.
• Coverdell ESAs (Code §530) can also fund K-12. Their low annual cap and income phase-outs have constrained usage; §530A’s employer contribution feature and potential seed grant may make it more attractive for very young children.
• UTMA/UGMA custodial accounts are simple but tax-inefficient as balances grow and provide no employer funding or federal seed. §530A adds tax-free buildup with fee discipline and guardrails around early use.
• Trusts—for example, a Colorado revocable trust holding a sub-trust for minors—offer unmatched control and creditor protection but involve drafting and administration costs. §530A can complement trust design by building a low-friction, tax-favored “first dollars” bucket for education and launching-into-life expenses. Many families will pair trust distributions with employer-funded §530A contributions to diversify sources.

Investment and Fee Discipline Baked Into the Statute

One of the most distinctive features is the statutory insistence on index-tracking funds with ultra-low expense ratios—a guardrail rarely seen in the Code. That design aims to maximize the compounding benefit of the seed deposit and family contributions. Providers are expected to offer menus anchored to broad indices such as total U.S. equity, S&P 500, and total bond funds. For practitioners, this reduces the due-diligence burden around fund selection while imposing operational constraints on custodians.

Access Rules and Penalties

Before age 18, withdrawals are tightly limited (think rollovers and corrections). After 18 and before 59½, a 10 percent penalty generally applies, with statutory exceptions for qualified education and first-home costs. After 59½, the account behaves much like an IRA. In addition, at age 18 the child must have taxable earned income to continue making new contributions, mirroring IRA logic. For planners, those rules point to §530A as a pre-college accumulation vehicle with carefully defined “on-ramps” for education and home formation.

Administration and Compliance for Employers

If you sponsor benefits, mark your calendar for July 2026. To exclude employer contributions from employees’ income, you will need a written program, employee notices, and nondiscrimination practices analogous to dependent care rules. These programs are voluntary and outside ERISA, but payroll, HRIS, and TPA coordination will be essential. Employers should also plan for practical controls: child-level contribution caps, mid-year job changes, and attestation processes when an employee has multiple eligible children.

Estate Planning Implications for Colorado Families

From a planning lens, §530A is best understood as a narrow, high-efficiency sleeve inside a broader family strategy:

• Guardianship and Incapacity. Because the child is the account owner and the account is custodial before majority, ensure your Colorado wills and parental nominations of guardian designate a trusted adult to interact with the custodian and, later, to counsel the child as they reach 18. The account itself should not pass through probate if properly titled, but the identity and cooperation of the custodian matter.
• Trust Coordination. If your revocable trust includes education and health standards for minors, map those standards to the permitted §530A distribution categories. A trustee might preserve §530A assets for penalty-free uses and satisfy other needs from the trust, or the reverse, depending on investment performance and timing.
• Funding Sequence. For babies eligible for the $1,000 seed, open the §530A as early as the custodian allows to capture maximum compounding. For older children, consider annual “stacking”: fund the §530A up to the family’s target (and capture any employer contribution), then 529 for larger education needs, then UTMA or trust for flexible spending.
• Creditor and Divorce Exposure. §530A accounts do not replace the asset-protection envelope you can build with properly drafted trusts. If shielding family capital from future claims is a priority, use §530A for narrow, statutory purposes and continue to rely on trust structures (and, where appropriate, Wyoming entities) for wealth preservation.

Practical Questions We Are Fielding (and What We Know)

• Can there be more than one account per child? No—there is one account per child, with limited rollovers (including to an ABLE account) permitted.
• What if a parent changes jobs mid-year? Expect aggregate caps to apply at the child level. Employers will need certification or attestation processes to avoid overfunding. Treasury guidance should address coordination mechanics.
• How are the funds invested at launch? Only index-tracking mutual funds and ETFs under the 0.10 percent fee ceiling. Target-date index options may emerge if they meet the cap.
• Will employers actually use this? Early indications suggest many will, particularly large tech and professional-services firms eager to add family-friendly benefits without ERISA complexity.

Action Steps for Clients and Counsel Before July 2026

• Inventory your current children’s accounts (529, UTMA, trusts) and model how a $5,000 annual §530A layer—plus any employer dollars—changes your education and first-home funding plan.
• Coordinate with HR if an employer contribution is available; ask about plan documents, nondiscrimination testing, and enrollment timing.
• Draft or update powers of attorney for minors where appropriate and confirm your Colorado guardianship nominations so a responsible adult can manage the account if needed.
• Calibrate your trust distribution standards and beneficiary education language to align with §530A’s permitted uses.

Braverman Law Group is already integrating §530A into Colorado estate plans—alongside 529s, trusts, and, when appropriate, Wyoming entities—to balance tax efficiency with the control families expect. If you would like a tailored roadmap for your children or your clients, we are here to help. Give us a call at (303) 800-1588 to schedule a free consultation today.

Note: This summary reflects the statute and agency commentary available as of September 2025; Treasury and IRS guidance may refine several points before the July 2026 launch.

This post lays out how the problem arises, what patterns raise red flags, and how to draft, fund, and administer two spousal trusts that withstand scrutiny. The analysis aims at informed families and at counsel who want concrete drafting moves rather than theory alone.

How the Reciprocal-Trust Doctrine Works

In United States v. Estate of Grace (1969), the Supreme Court set a two-part test. The government asks whether the trusts are interrelated and whether they place each grantor in roughly the same economic position as if each had created a trust for themselves. When the answer is yes, inclusion follows. In practical terms, the doctrine targets “you give my spouse what I want for myself, and I will give your spouse the same,” especially when the trusts sit side by side and operate the same way.

The doctrine interacts with retained-power rules. If each spouse effectively holds, through the other trust, powers they could not hold directly—such as the ability to direct distributions, enjoy income, or unwind transfers—the IRS argues for estate inclusion. Avoiding that result requires real, not cosmetic, differences.

Design Choices That Invite IRS Attention

You increase risk when you do several of the following at once:

• Sign both trusts on the same day, with identical trustees, identical beneficiaries, and identical distribution standards.
• Give each spouse the same limited power of appointment over the same class of descendants on the same terms.
• Fund both trusts with equal assets of the same type, especially closely held business interests or identical marketable portfolios.
• Name each spouse as trust protector with symmetrical removal and replacement powers over the other trust’s fiduciaries.
• Have each trust own life insurance on the other spouse, with the same premium-payment pattern and split-dollar terms.
• Coordinate distributions in lockstep, including back-to-back loans or “cross-streamed” payments that mimic reciprocal income rights.

None of these items alone guarantees inclusion. When combined, they paint the “interrelated and economically identical” picture that Estate of Grace condemns.

Breaking Reciprocity: Drafting Levers That Matter

You avoid the trap by creating real asymmetry at formation and keeping it through administration. Think holistically, not as a checklist.

• Timing. Execute the trusts in different months or even different years. Allow enough time between gifts so the second trust does not look like a prearranged exchange for the first. Pair that with different funding schedules.
• Trustee structure. Use different independent trustees. Grant removal and replacement power to only one spouse, or to a third party for the second trust. Avoid symmetrical protector powers.
• Distribution standards. Give Trust A a pure “best interests” discretionary standard with an independent trustee; give Trust B a HEMS standard (health, education, maintenance, support) with an ascertainable-standard limiter and a distribution committee. Unequal discretion matters.
• Powers of appointment. Allow a testamentary limited power in one trust and no power (or a narrower class) in the other. Alternatively, allow an inter vivos limited power in one trust that requires protector consent; omit any comparable power in the other.
• Grantor-trust status. Keep one SLAT as a grantor trust via a swap power or reimbursement clause. Make the second non-grantor, or include a toggle that turns off grantor status after a set period. Divergent income-tax results help prove non-identity.
• Funding mix. Contribute different asset classes and different values. Place marketable securities into one trust and real estate or closely held interests into the other. If life insurance belongs, centralize policies in one trust and use cash or marketables in the other.
• Beneficiary class. Allow spousal distributions in only one trust, or allow them in both trusts but at different priority levels and with distinct veto or consent mechanics.
• Situs and governing law. Select different states for administration, if appropriate to your plan, and appoint different registered agents and trust companies. Distinct fiduciary regimes reinforce separation.

You do not need every lever. You do need enough meaningful differences that a neutral observer concludes these were separate, independent designs rather than a matched set.

Funding and Reporting: Where Many Plans Stumble

You must align the economics of each transfer with the legal form you drafted.

• Document separate sources. Use separate accounts for each spouse’s contribution. If you live in a community-property state, consider a marital agreement or transmutation to avoid later arguments that both spouses funded both trusts. In Colorado, confirm separate ownership before you transfer assets.
• Avoid “round-trip” cash. Do not loan from Trust A to the grantor of Trust B and then back again the same week. If loans are necessary, price them at arm’s-length rates, schedule payments, and document security.
• Gift-tax returns. File timely Forms 709. Disclose the structure in a protective way. If you allocate GST exemption, describe the variation between the trusts to reinforce non-reciprocity.
• Crummey mechanics. If you rely on demand powers, send notices separately for each trust to distinct beneficiaries. Maintain proof.
• Valuations. For closely held interests, use independent appraisals and consider discounts only where supportable. Give each trust different blocks or classes to avoid sameness.

Administration: Keep the Differences Alive

Good drafting fails if administration erases your distinctions.

• Use different investment policies and distinct advisors. One trust may hold growth equities; the other may emphasize real assets or credit strategies.
• Stagger distributions. Do not approve matching requests in parallel. Document the decision process and the separate rationale for each payment.
• Use the grantor-trust swap power in only one trust. Swap in high-basis assets for low-basis holdings as part of basis management, and leave the other trust untouched.
• When decanting or amending under a protector power, avoid symmetrical changes. If one trust needs modernization, fix it without mirroring the other.

What If You Already Signed “Twin” SLATs

You can still improve your posture.

• Decant one trust into a new instrument with different standards, fiduciaries, or beneficiary classes.
• Release a power of appointment or a protector right on only one side.
• Migrate situs for one trust to a different state with different administrative provisions.
• Restructure life insurance so only one trust owns policies; have the other hold liquid investments instead.
• Refinance loans and change investment advisors to break parallel tracks.

Make these moves for business reasons you can defend. A paper trail that shows real-world objectives—investment diversification, professional trustee oversight, or better administration—helps.

When One SLAT Beats Two

Sometimes a single SLAT paired with portability, disclaimer planning, or a credit-shelter trust at the first death gives a cleaner result. That path can reduce legal friction and administrative cost while still moving growth out of the combined estate. You control access risk with thoughtful distribution language and an independent trustee who understands family dynamics.

A Short Working Checklist for Counsel

• Different dates, different funding schedules, different assets.
• Different fiduciary teams, with non-parallel removal powers.
• Different beneficiary priority and distribution standards.
• Divergent powers of appointment and protector frameworks.
• One grantor trust and one non-grantor (or a toggle used for only one).
• Clean gift sources, no circular loans, proper valuations.
• Separate investment policies and advisors; staggered distributions.
• Thoughtful GST allocation with clear disclosure on each Form 709.
• Ongoing file memos that explain independent decisions.

Plan With Intent, Not Symmetry

You can enjoy the financial flexibility that couples seek from SLAT planning without inviting inclusion. The key is intent backed by design, funding discipline, and ongoing administration that prove each trust stands on its own. Braverman Law Group can model outcomes, draft instruments with the right asymmetry, and guide trustees so your plan works in real life as well as on paper. To discuss whether one or two SLATs fit your situation—and how to avoid reciprocal-trust pitfalls—contact our team to schedule a strategy session.

Why Today’s Window Could Slam Shut

Lawmakers appear ready to scrap the federal estate tax as part of the next budget deal. That headline sounds wonderful until you study the fine print. When the estate tax disappears, the GST exemption disappears along with it. If history repeats, the levy will return—remember 2010’s single-year repeal—yet estates created during the gap will face fresh estate tax and new GST rules without any grandfathered shield. Families grieving a loss or coping with incapacity will have no time to build defenses. The only reliable move is to lock in the current exemption before Congress changes the landscape.

GST Exemption: Use It or Lose It

The exemption—$13,990,000 per person in 2025—works on a first-come basis. You allocate it to a Dynasty Trust this year; the government cannot claw it back later, even if rates or exemptions fall. Wait, and the figure could plunge to six or seven million dollars or vanish entirely. Once erased, it cannot be reclaimed.

What a Dynasty Trust Really Does

A Dynasty Trust sits outside your taxable estate forever. You move assets into the trust, assign the GST exemption, and name a trustee who can distribute income and principal for health, education, maintenance, and support. Those four words matter; they allow serious help—tuition, medical insurance, surgery, down payments, or startup costs—while discouraging loafing. When beneficiaries reach life milestones, they access funds without ever owning the assets outright, so creditors, ex-spouses, and future tax collectors stay away.

Top Benefits You Capture by Funding a Dynasty Trust Now

• Permanent tax shelter – Assets inside the trust avoid estate, gift, and GST taxes at every generation.
• Growth beyond reach – Income compounds without state or federal transfer levies eroding it.
• Protection from outsiders – Trust provisions stop lawsuits, divorces, and bankruptcies from draining family capital.
• Health and education safety net – Trustees can pay premiums, tuition, and medical bills when the next recession or health crisis strikes.
  Securing these advantages today ensures your work continues to lift descendants long after present tax statutes fade from memory.

Dynasty Trusts Are Not Only for Billionaires

Some Coloradans believe only a certain Mars-obsessed billionaires need a century-long estate plan. Ignore that myth. You do not need Elon Musk’s wealth (or ego) to benefit. If your net worth sits above six million dollars and you picture grandchildren graduating college debt-free, a Dynasty Trust fits. The strategy simply amplifies opportunities you wish you had—full-ride scholarships, start-up capital, and health coverage—without handing out unearned Ferraris.

Education and Medical Care: The Real Stakes

Tuition at a four-year public university already tops twenty-five thousand dollars annually. Private colleges cross seventy thousand. Health insurance deductibles climb every year, and a single hospital stay can mirror Ivy League tuition. Picture future decades of rising costs and shrinking public aid. A Dynasty Trust turns your present dollars into tomorrow’s lifeline. Trustees can pay tuition directly to institutions under the Internal Revenue Code’s education exclusion, bypassing gift limits entirely. They can also cover unlimited medical bills for surgeries, therapies, and premiums through the medical exclusion. Your descendants receive care and knowledge, not handouts for luxury living.

How Funding Now Shields Children and Grandchildren From Harsh Futures

You transfer appreciating assets—index funds, real estate, closely held business interests—into the trust today. Growth accelerates under professional management without annual transfer tax tolls. A trustee follows guidelines you script: pay college expenses in full; match retirement account contributions; cover necessary medical costs; seed business plans that pass a viability review. Each distribution requires documented purpose, deterring entitlement while guaranteeing opportunity. Should a beneficiary drift toward unhealthy spending, the trustee may suspend or redirect payments toward counseling or education instead. Your blueprint stays strong whether the economy booms or falters.

Steps Braverman Law Group Takes to Launch Your Dynasty Trust

• Discovery Meeting – You outline goals, family dynamics, and asset mix. The firm shows how a Dynasty Trust meets your vision and confirms the GST exemption amount available.
• Design Session – Attorneys craft tailored distribution standards, select a corporate or individual trustee, and integrate the trust with your Colorado revocable trust and durable powers of attorney. A clear, client-friendly diagram replaces legalese.
• Funding Stage – Deeds, assignment documents, and investment account transfers move assets into the trust. The firm files gift tax returns allocating your GST exemption precisely.
• Ongoing Counsel – Annual reviews ensure the trust adapts to new children, marriages, divorces, or tax legislation. You receive written updates and action items rather than dense statutory citations.

Common Questions Colorado Families Ask

Will the trust force my heirs to live in Wyoming or another state?
No. Beneficiaries may reside anywhere. The governing law of the trust remains fixed, while distributions follow them worldwide.

Can I serve as trustee and still protect assets?
You may serve as investment trustee but should appoint an independent distribution trustee to preserve creditor and tax insulation.

What if Congress repeals the estate tax forever?

Your Dynasty Trust still works. The exemption you locked in protects the principal, and the trust continues providing creditor protection and divorce insulation.

Does a Dynasty Trust interfere with charitable giving plans?
Quite the opposite. The trust can name a family foundation among contingent beneficiaries or share growth with donor-advised funds while still supporting future generations.

Act Before the Window Closes

Congress may switch tax policy overnight, but incapacity or unexpected death can arrive even faster. Planning now converts uncertainty into security, ensuring tuition gets paid, surgeries proceed, and family ventures blossom long after today’s politicians retire. Braverman Law Group stands ready to finalize your Dynasty Trust in weeks, not months. Call (303) 800-1588 or complete our secure contact form to protect your life’s work for every generation yet to come.

Two Bar Admissions, One Broader Shield

This dual-state capability is more than a résumé detail; it translates directly into better planning choices for you. Colorado statutes offer strong revocable trusts and solid probate shortcuts, yet they stop short of the cutting-edge liability barriers found just north of the border. Because Diedre can practice in both jurisdictions, she drafts, forms, and maintains Wyoming entities under Wyoming law while still anchoring the rest of your plan under Colorado law. You meet with one legal team, pay one flat fee, and receive one cohesive strategy that spans two states.
Wyoming’s court system recognizes these Colorado-based attorneys just as fully as any Cheyenne lawyer. That recognition empowers Braverman Law Group to form new entities, file annual reports, and, when needed, defend those structures in Wyoming courts. As a client, you gain a deeper moat around your wealth without leaving your favorite Front Range coffee shop.

Why Wyoming Sits at the Top for Asset Protection

Asset-protection rankings consistently place Wyoming in the nation’s top tier for several reasons. First, the state imposes no personal or corporate income tax, allowing business profits and trust earnings to accumulate free of state tax drag. Second, Wyoming statutes give LLC owners robust privacy; member names stay off public filings, shielding you from data-hungry litigants. Third, creditors face a “charging-order” remedy as their sole avenue of collection, which means they cannot force a liquidation or seize company assets. Finally, the annual maintenance requirements remain minimal: a modest filing fee and a registered agent keep your entity compliant.
Those four features—tax freedom, privacy, creditor deterrence, and low overhead—blend perfectly with a Colorado estate plan. You still claim Colorado residency and enjoy local probate shortcuts, yet your business interests and long-term investments sit under Wyoming’s stricter creditor rules.

Wyoming Close Limited Liability Companies: A Family-Focused Fortress

A Wyoming CLLC refines the traditional LLC to fit tightly held families. The statute caps members at thirty-five, bans public trading of ownership interests, and limits member withdrawal rights unless all members consent. Those restrictions close loopholes creditors might exploit and discourage disgruntled family members from selling outside the clan.
Braverman Law Group tailors each Close LLC to your goals. For some families, the entity holds a vacation rental in Summit County; for others, it manages a brokerage portfolio or a private lending venture. Because the company exists under Wyoming law, every membership interest falls under Wyoming’s charging-order protection—even if the property itself sits in Denver or Boulder.
Interested readers can dive deeper into CLLCs by requesting Braverman Law’s complimentary whitepaper Planning with the Wyoming Close LLC. The report explains formation steps, tax treatment, and practical management tips in plain English.

Asset-Protection Trusts: Adding an Extra Wall

A domestic asset-protection trust (sometimes called a self-settled spendthrift trust) lets you transfer assets to an irrevocable trust while naming yourself as one of the permissible beneficiaries. Under Wyoming’s statute, creditors face a four-year window to challenge contributions; afterward, the trust assets sit beyond their reach. You still receive discretionary distributions for health, education, maintenance, or support at the trustee’s discretion, yet the assets no longer appear on your personal balance sheet for lawsuit purposes.
Because Diedre practices in Wyoming, she drafts these trusts to comply precisely with the state’s requirements—independent trustee, written spendthrift clause, and explicit Wyoming governing law—then coordinate the trust agreement with your Colorado revocable trust, powers of attorney, and health-care directives. As a result, probate avoidance, incapacity planning, and asset protection merge into one smooth framework.

Integrating Wyoming Entities Into Your Colorado Estate Plan

Choosing a Wyoming CLLC or asset-protection trust does not uproot your Colorado foundation; it reinforces it. Real-world coordination happens in three layers:

1. Ownership alignment – Your Colorado revocable living trust holds the membership units of the Wyoming CLLC or receives discretionary benefits from the Wyoming asset-protection trust. The alignment keeps Colorado probate courts out of entity governance while maintaining Wyoming creditor shields.
2. Tax reporting clarity – Braverman Law works with your CPA to ensure federal tax returns reflect any election (partnership, disregarded entity, or S-corporation) and to confirm Colorado remains your tax home. Wyoming’s lack of income tax never jeopardizes your Colorado filing obligations.
3. Succession continuity – Successor-trustee provisions in your Colorado documents dovetail with Wyoming statutory agents and successor managers in the CLLC. Your heirs step into pre-established roles without courtroom drama or emergency motions.
   By viewing your affairs through a two-state lens, the firm delivers a sturdier plan than either jurisdiction could offer alone.

The Braverman Law Process: Clear Steps From Idea to Implementation

Every asset-protection engagement moves through four predictable stages, each with its own purpose and ending point.

• Discovery Call – Fifteen minutes confirm fit and outline goals, giving you immediate clarity on whether a Wyoming component makes sense.
• Design Meeting – You review proposed structures, choose trustees and managers, and approve funding strategies. Plain-language diagrams replace thick binders of legalese.
• Signing & Funding – The firm prepares Wyoming filings, operating agreements, and trust deeds simultaneously with Colorado wills, revocable trusts, and deeds. Bank and brokerage accounts move into the structure under attorney guidance.
• Ongoing Maintenance – Annual check-ins, Wyoming filings, and Colorado document reviews keep everything current as laws and life change.
  Each phase ends with an action summary so you remain in control and never wonder about next steps.

Common Questions From Colorado Families

Will moving assets to Wyoming trigger Colorado tax or reporting obligations?
No additional Colorado tax arises merely from forming a Wyoming entity. You continue filing Colorado returns as usual; the entity appears on Schedule E or a K-1, just like an in-state LLC.
Can a Wyoming asset-protection trust protect my primary residence in Denver?
Yes, provided the deed transfers to the trust and you observe the four-year seasoning period. You keep the right to live there through a carefully drafted occupancy agreement.
Does a Close LLC need a Wyoming-based bank account?
Not necessarily. Many clients keep operating accounts with Colorado institutions. The operating agreement simply states that banking location does not affect governing law.

Take the Next Step Toward a Two-State Safety Net

Colorado courts administer probate efficiently, yet they cannot match Wyoming’s privacy and creditor deterrence. When you add a Wyoming entity to your Colorado estate plan, you combine home-state familiarity with frontier-state strength. Diedre Wachbrit Braverman stands ready to craft that hybrid shield without outsourcing or split billing.
Request your complimentary copy of Shielding Family Wealth With Wyoming Close LLCs to learn more about how these entities function. Then schedule a strategy session to discuss whether a Wyoming Close LLC, a Wyoming asset-protection trust, or both belong in your estate plan. Call (303) 800-1588, or use the secure contact form on our site. Protect today, sleep better tonight, and leave a stronger legacy tomorrow.

Overview of the Study

Leading teams of neurologists at six different research centers teamed up to conduct this study, which they then published in August 2024. The study looked at hundreds of patients with some kind of brain damage – the damage could have been from a car accident or another incident that resulted in severe trauma to the patient’s head. All of the patients were deemed “unresponsive” – this means that doctors determined that they were either in a vegetative state or were “minimally conscious.” For many individuals, this in turn meant that they were in a sort of “in between” state: their eyes might have been open, but they were not responding in a traditional sense to any triggers in the outside world.

The Study’s Results and Its Implications

According to the study’s results, 25% of the patients that the researchers examined had brain activity typical of individuals with full consciousness. The study’s leaders asked the brain-damaged patients to complete somewhat complex mental tasks while they were in their vegetative state, such as imagining themselves playing a sport. Upon studying images of the patients’ brains after posing these questions, the scientists noticed that a quarter of the patients showed clear signs of brain activity suggesting they were aware of the prompt and actively engaging in the exercise. The researchers compared the brain-damaged individuals’ brain activity to healthy individuals’ brain activity, and they employed qualified statisticians to help them understand the results that they obtained.

The study took almost a decade to carry out, and already doctors are already signaling that the research is cutting edge. One prominent neurologist indicated that “it’s not ok to know this [information] and do nothing.” Experts in the field are abuzz and equipped with new perspectives on limited consciousness, as well as with new hope that many brain-damaged patients are faring better than we once believed. Because these patients’ brains are more active than doctors previously understood, there may be more we have yet to understand about these individuals’ medical conditions.

The study could have significant results for the medical community. Typically, when a doctor informs a patient’s loved one that he or she is incapacitated, the family loses hope. This study, however, may open the door to rethinking how these patients could recover. In fact, it may suggest that a larger percentage of the patients could reach a fuller recovery, which in the past has been outside the realm of possibility.

Advance Declarations and Estate Plans

The study could also have significant ripple effects in the legal community; for example, it might have an impact on individuals that are currently thinking about their estate plans. One essential part of an estate plan is an Advance Declaration, which is a legal document providing instructions for your medical care. The instructions only go into effect when you are incapacitated and unable to communicate your preferences (i.e., the instructions are not relevant as long as you are fully aware and capable of making decisions for yourself). The Declaration could include provisions such as what kind of treatment you prefer, whether you should be resuscitated in an emergency, who should make decisions on your behalf (both medically and financially), and how doctors should proceed if you are in a vegetative state.

The research has not yet been translated to tests that can be used for patients today. But clients who want to take advantage of this research can change their Advance Declarations to modify how long they stay in a persistent vegetative state or to demand one of these tests when they do become generally available. Clients even have the option of stating that life support should not be removed until this test is conducted, even if that results in a wait of many years.

In the end, each person must make his or her own decision about how to formulate their estate plan based on their own goals and preferences. Because of the groundbreaking nature of this study, though, many might want to rethink some parts of their estate plan, especially as science continues to help us understand and make advances that we had previously not thought possible. Whether or not you might want to use this study to inform your own estate plan, it is critical to speak to a Boulder estate planning attorney that can help you understand your options and think through how you and your family might want to move forward.

Are You Looking for a Boulder Estate Planning Attorney for You or a Loved One?

To learn more about Advance Declarations and how this trailblazing study might apply to your own estate plan, give us a call today at the Braverman Law Group. We are a team of experienced, empathetic, thorough Boulder estate planning attorneys, and our years of experience in the field make us well equipped to advise our clients on how to proceed in the midst of uncertain situations. To make sure you, your family, and your loved ones are well taken care of, get the best team of Boulder estate planning attorneys in your corner – at Braverman Law Group, we are proud to offer the highest quality services for our beloved Colorado community.

For a free, no-obligation consultation with one of our Boulder estate planning attorneys at Braverman Law Group, give us a call today at (303) 800-1588. If you prefer, you can also fill out our online form to tell us about your legal issue and have a member of our team reach back out to you as soon as possible. Our firm covers estate planning, trust administration, special needs planning, Medicaid planning, and more.

Legal Landscape Pre-Connelly

As the legal landscape stood before the Connelly decision, it was common for companies with business succession plans to include the use of life insurance policies to fund a buy/sell agreement. In the past, case law has allowed estates to exclude insurance proceeds when valuing business interests in buy/sell agreements. This reality, in turn, has allowed companies to account for life insurance policies without having to worry about the Internal Revenue Service (IRS) including these policies as part of their business valuations. When the life insurance policies were excluded, businesses’ estate tax bills were necessarily lower. This is the background against which the Supreme Court decided Connelly on June 6, 2024.

The Decision

In its decision, much to business owners’ dismay, the Supreme Court decided that insurance proceeds should actually be included in a business’s valuation. According to the Court, an insurance payout in this context is interconnected to the business structure itself, and therefore it makes sense to value the business with the insurance payout in mind. Because life insurance policies have not traditionally been included in business valuations, the decision marks a huge shift in how businesses will think about the value of their company and the way they formulate their estate plan. It is worth noting that because the decision came out of the Supreme Court, it affects all businesses across the country – no district or state is immune.

The Implications of the Decision

How, then, should businesses proceed post-Connelly? What makes sense as a next step? To start, each business will have to make a decision on how to draft their estate plan in coordination with an experienced estate planning attorney. Estate planning attorneys are accustomed to changes in the law, and they will be able to give advice on how to redraft a compliant and creative estate plan in light of the Connelly decision.

With that in mind, businesses will have several options moving forward. First, businesses could shift from redemption agreements to cross-purchase agreements. The difference between the two types of agreement is critical: in a redemption agreement, the company’s interest would necessarily be included with the value of the business. In a cross-purchase agreement, by contrast, the company has no interest in the decedent’s life insurance proceeds. Instead, in a cross-purchase agreement, co-owners hold life insurance policies on each other in order to fund the agreement.

Business owners could also explore the possibility of increasing insurance coverage to fund the business’s purchase price as well as any tax burdens that come along with it. This could allow owners to keep their current structure in place; it just becomes more expensive for businesses to cover the cost of their insurance.

There are also different choices that businesses could make apart from the more obvious cross-purchase agreement, if business owners do choose to opt for restructuring their ownership agreements. One example is an irrevocable life insurance trust, which allows businesses to own policies outside of their estate. In general, businesses should be looking for options that avoid reliance on more traditional models, which have tended to assume that life insurance policies would not be part of the overall business valuation. Businesses should be looking for ways to keep their tax burden down even as the Supreme Court has made this more difficult in a post-Connelly world. While this can be frustrating to navigate, the circumstances can also offer an apt opportunity to review business structures and their overall estate plans.

Reviewing Your Ownership Agreement: Is Now the Time?

The Connelly decision represents only one reason that we think it is smart to take the time to review your business’s ownership agreement now. As the end of the year quickly approaches, businesses should also be taking stock of their current structures and making sure everyone is on the same page before the new year. As you review your business’s ownership agreement, we offer two pieces of advice to keep in mind: 1) communicate early and often with all involved parties and 2) retain expert estate planning services as you think through new possibilities. If you can accomplish both of these goals, you can make sure your ownership agreement is both cohesive and thorough, both agreeable to all involved and methodical in its approach.

Call a Boulder Estate Planning Attorney to Discuss Your Next Steps Today

Because the US v. Connelly decision is so recent, and because businesses are still trying to figure out navigate a post-Connelly estate planning world, it is the perfect time to get in touch with an experienced Boulder estate planning attorney. At the Braverman Law Group, we believe that informed choices lead to peace of mind for our clients. That is why we always take the time and energy to walk each client through their estate planning options, tailoring our advice to each person’s goals and circumstances. Our team works hard to deliver results for our clients, because we care about providing the highest quality representation possible.

For a free, no-obligation consultation with one of our Boulder estate planning attorneys, give us a call today at (303) 800-1588. If you prefer, you can also fill out our online form to tell us about your legal issue and have a member of our team reach back out to you as soon as possible. Our firm covers estate planning, trust administration, special needs planning, Medicaid planning, and more.

The Will

By definition, a will is a legal document. It contains an individual’s wishes and instructions for what should happen with their assets after they die. A will can include instructions for cash, bank accounts, investment accounts, real estate, personal belongings, and more. A will can also include provisions such as funeral instructions, pet care instructions, and social media account information.

The Trust

In contrast, a trust is a legal contract. In the trust, one party (the trustor) gives another party (the trustee) the right to manage and control his or her property. Each trust generally contains a purpose; that is, your trust might be set up for your children’s education, for your grandchildren’s future wellbeing, or for your charitable giving. The trustee’s job is to distribute the trust’s assets only in accordance with the trustor’s stated purpose.

Difference #1: Probate

The first major difference between the will and the trust is that if you choose to primarily use a will in your estate plan, that document will need to go through the probate process. This means that after you die, a judge will look at your will, decide if it is valid, and eventually approve the distribution of assets. This process can take time and money, and beneficiaries sometimes wait months to receive the money and property their loved one left behind.

A trust, however, is exempt from probate. If you leave assets in a trust, the trustee is solely responsible for distributing the assets; the probate court is not involved. This way, when you pass, your loved ones can receive your assets more quickly. You can also avoid having to put any document on the public record, as you might have to do in probate court. A trust therefore ensures a degree of privacy that a will cannot.

Difference #2: Varieties of Trust

A second important difference between the will and the trust is that the trust provides a diversity of options that the will does not provide. There are several major types of trust: revocable trusts, which can be changed at any time; irrevocable trusts, which cannot be changed but which offer stronger protection from third parties; and testamentary trusts, which take effect only after the trustor dies.

Trustors create trusts for reasons beyond estate planning, and trusts can be valuable tools that trustors use throughout their lifetimes as well. While we won’t go in depth today on the different ways to structure a trust, it’s important to realize that the trust is an adaptable instrument and can help trustors achieve goals well beyond passing assets to the next generation. If you want to learn more about the different kinds of trusts and how they might serve you, ask your Boulder estate planning attorney about how to set up a trust for purposes such as charitable giving, special needs planning, credit shelter, or asset protection.

Difference #3: The Cost

Although this is not always true, we often find that clients spend more money setting up a trust than they do a will. While the resources can often be well worth it in the end, some clients prefer to draft a will instead of establishing a trust, in order to spend less time and less money on their estate planning processes. At the end of the day, though, complex estates often warrant the cost of the trust, since the trust can be easily tailored to fit the needs of those with more complex assets. For purposes of estate planning, “complex” assets might include business interests, investment accounts, or a real estate portfolio.

Difference #4: The Protection

A last major difference between the will and the trust is that the trust can more easily shield your assets from judgments against you. If you are facing significant debts, the reality is that third parties can collect on these debts after you die. By securing assets in a trust, though, third parties are generally unable to access the money, leaving you with more protection and more peace of mind.

The decision of whether to use a trust or a will ultimately depends on your personal goals and assets. These differences are just a few of many, and there is always more to learn about estate planning in Colorado. Before you definitively decide on what’s right for you, we recommend you take the time to think through your options carefully and holistically.

Trusts are also more private than wills. This is because, in a will, the beneficiaries’ name, addresses, ages, and inheritance are all public record. As a result, companies can scrape the public records to obtain this information, which is often used for unsolicited marketing on other undesirable means. Simply put, a trust prevents against this misuse of information.

Speak With a Boulder Estate Planning Attorney Today

If you have questions about your estate planning process, contact the Braverman Law Group today. At the Braverman Law Group, we understand that making decisions about your estate plan is no easy matter. We take pride in our thorough approach, and we make sure every client understands the options available to them so that they can make the most informed decision possible regarding their financial future. If you want to make sure your loved ones are well set up after you are gone, you need to rely on a Boulder estate planning attorney you can trust. Our team at Braverman has years of experience navigating estate planning, probate, special needs planning, trust creation and administration, and Medicaid planning. If you want the best team of attorneys by your side, we are the group for you.

For a free, no-obligation consultation with one of our estate planning attorneys, give us a call today at (303) 800-1588. If you prefer, you can also fill out our online form to tell us about your legal issue and have one of our Boulder estate planning attorneys reach back out to you as soon as possible.

The purpose of the CTA is simple: the federal government is trying to make it more difficult for individuals to create and use shell companies, which are businesses without assets that are often formed to avoid taxes or launder money. The CTA essentially creates a huge database of companies that are either formed or operating in the United States. By requiring these businesses to provide the government with basic information about their identities, the government creates a mechanism to track their functions and methods, monitoring against fraud in the process.

The new rules under the CTA were introduced on January 1, 2024; however, the government has given entities one year (until January 1, 2025) to come into compliance with the CTA’s regulations. However, if an individual or group of individuals creates a business in the year 2024, that business has only 90 days to register to file their information with the government.

The Requirements

The CTA says that any reporting company has to electronically file certain information on the Financial Crimes Enforcement Network’s website. The company must report everyone that is a “beneficial owner.” Importantly, beneficial owners fall into two categories: someone that owns or controls 25% or more of the company’s ownership interests; or someone that exercises “substantial control” over the business. While the “25%” requirement is straightforward, the “substantial control” requirement is less clear. Examples of individuals exercising substantial control over a company include members of a company’s leadership team, board members that can appoint leadership to a company, or anyone that has the authority to make significant decisions for the company.

In addition to reporting the list of beneficial owners, companies must list their identification information – i.e. their address and taxpayer identification number. The CTA then puts this information into its database so it can monitor the company over time.

There are also steps that companies must take after filing their initial information online. If there is a change in circumstances within the company, the company must update the information in the system within 30 days of the change. This would apply, for example, to companies experiencing a change in leadership or even a change in address.

For companies that must comply with the CTA and fail to do so, a court can impose financial penalties, criminal penalties, or both. If you think you might be under the purview of the CTA, it is always better to err on the side of caution instead of exposing yourself to costly penalties.

Exemptions

Not every company formed or operating in the United States needs to file with the CTA. The CTA lists 23 exemptions, including: governmental authorities, banks, credit unions, insurance companies, and accounting firms. There are also exemptions for “large operating companies” and inactive entities. The full list of exemptions is available here. Even if your business falls within an exempt category, however, it is important to look closely at the exemption as listed. Each exemption carefully defines the type of company that is free from the typical reporting requirements, and if your company does not clearly fit within the confines of the definition, you might indeed be required to report under the CTA. Asking a lawyer or financial expert whether your company fits into an exemption is never a bad idea.

The CTA’s Connection to Estate Planning

As we have discussed in the past on our blog, more and more estate planning attorneys are becoming familiar with financial issues, and more financial experts are learning about the estate planning process. The two spheres are inextricably linked, since the way you organize, manage, and monitor your financial assets will certainly affect how you create and update your estate plan. Remember, you should aim to update your estate plan either every three to five years, or whenever you experience a significant life change.

Lastly, a company that is incompliant with the CTA could face difficulties in probate, if the company’s owners are attempting to pass even a portion of the company on to a beneficiary. This, in turn, causes major headaches for those navigating the probate process, and it is always more efficient to make sure things are above board on the front end (instead of trying to clean up the mess during probate). With questions about how the CTA might affect your estate plan, whether you have started the estate planning process or not, contact a trusted attorney that can look at both your financial records and your estate plan to make sure you are on the right track.

Do You Have Questions for a Boulder Estate Planning Lawyer?

At the Braverman Law Group, we pride ourselves on staying up to date on relevant changes in financial regulations and laws. Our team of Boulder estate planning lawyers is experienced in tying any regulatory changes into our clients’ estate plans, mindful of how important it is for clients to update their estates plan every few years. For many, this process can feel daunting, but with the right team of attorneys by your side, you can move through your estate planning journey as seamlessly as possible. Our firm at the Braverman Law Group uses empathetic, knowledge-based representation to guide our clients through their legal issues, and we would be honored to do the same for you. For a free and confidential consultation with a Boulder estate planning lawyer, give our office a call today at (303) 800-1588. If you prefer, you can also fill out our online “contact us” form to have an attorney reach back out to you as soon as possible for your consultation.

On today’s blog, we cover some important connections between the two industries, as well as what you can do if you feel like you need more time on your taxes. As always, this blog represents only a portion of what clients should know about the overlap between wealth management and tax-related services, and it is never a bad idea to speak with an experienced attorney that can help you navigate both worlds as seamlessly as possible.

Filing for an Extension

If you are in the process of starting to prepare your estate plan, do not hesitate to request a tax extension. During tax season, there is a common misconception that requesting an extension leads to an increased audit risk, but this is not the case. Instead, extensions can offer much-needed relief to those who are taking time to get their affairs in order. For those who will end up filing differently depending on the structure of their estate plan, it can be well worth it to ask the IRS for more time to file. Additionally, creating and finalizing an estate plan can take many months, and it is better to participate in the process thoroughly and carefully, so as not to skip any key steps in drafting your plan.

To request an extension, you will likely need to file for an extension with the IRS as soon as possible. By filing this request by April 15, you can avoid penalties that you might otherwise incur by filing your taxes past the deadline. One other option, if you have already filed your taxes, is filing an amended return, which can allow you to include information you did not have at your disposal when you originally filed.

Looking Ahead to Next Year

Additionally, you might be looking to start or change your estate plan in the coming months. If this applies to you, it is crucial that you ask your estate planning attorney about how your estate plan will affect your taxes for 2024 (to be filed in 2025). One of the most common mistakes we see in our area of law is that individuals procrastinate on gathering important documents, finalizing plans, and submitting paperwork; by getting ahead of the process now, soon after the 2023 season comes to a close, you can avoid this potentially costly error.

Considering Tax Implications for Wealth Management

It is just as important to make sure you understand how taxes could negatively affect your wealth management goals. For example, you might be taking up various trading activities as part of your attempt to grow your assets, and while initially beneficial, these activities could end up in generating a high tax bill when April comes around. Too often, we see clients who wait to think about taxes after they forge a plan for wealth accumulation and put that plan into place. Ultimately, tax implications are just one part of a wealth management strategy, and other considerations (family circumstances, short-term needs, and possible beneficiaries) are all other factors to keep in mind.

Similarly, you can think about how your charitable goals might align with a possible tax benefit. If you have money to spare, not only can it be worthwhile personally to find a cause you care about, but it can also reap rewards when you do file your taxes in April. Notably, only charitable donations over a certain amount qualify individuals for a tax benefit, so you should speak with an expert to get a handle on what this amount might be for you.

Consulting a Boulder Estate Planning Attorney

As you speak with professionals regarding either your taxes or your estate plan, we advise that you make sure the firm offering you their services is prepared to speak on both matters. Recently, we have seen an uptick in major transactions that relate to both industries, and even if your tax consultant does not have expertise on estate planning (or vice versa), he or she should be able to refer you to someone who does. While it can be daunting to have to consider both taxes and wealth accumulation at the same time, choosing qualified, experienced professionals to guide you can help you stay on track. Ultimately, estate planning and tax filing are both inherently individualized processes, and it is important to speak to a Boulder estate planning attorney to make sure you are working toward your goals and doing everything above board. By taking the time to get expert advice in the short term, you can end up saving yourself major headaches in the long term.

The Braverman Law Group: Boulder Estate Planning Attorneys Working for You

At the Braverman Law Group, we are committed to providing the personalized and client-centered representation to those that retain our services. We pride ourselves in offering clear explanations of complex issues as well as powerful execution of litigation strategies, so that we can fight diligently for our clients’ best interests. Our team handles a range of cases, including those related to estate planning, trust administration, special needs planning, and Medicaid planning. We are honored to be part of your estate planning journey every step of the way, and we are committed to making sure you have the right tools to achieve your financial goals. For your free and confidential consultation with an experienced Boulder estate planning lawyer, give our office a call today at (303) 800-1588. If you’d rather, you can also fill out our online form and have an attorney reach back out to you as soon as possible.

What is the Corporate Transparency Act and Who Must Comply with the Act?

The CTA requires certain businesses to submit “beneficial ownership information” (BOI) to the U.S. Department of Treasury’s Financial Crimes Enforcement Network. The Act’s purpose is to ensure that businesses are above board, in that they are not engaging in illicit activities such as tax evasion and money laundering. Importantly, only certain kinds of businesses most comply with the CTA – these businesses include LLCs, corporations, and some other entities formed through filing with a Secretary of State. To check if your business is required to report under the CTA, you can either speak with a trusted attorney or look closely at the CTA’s requirements on the Department of Treasury’s website.

The CTA lays out important details such as reporting deadlines, reporting requirements, and penalties for non-compliance. In order to comply with the Act, businesses can face average costs of $8,000 within the first year of reporting, which can be a huge lift for smaller businesses. When businesses send in information according to the Act’s requirements, the information is not made public; instead, the government uses the information to monitor possible illicit business activities.

What Happened in the District Court’s March 2024 Ruling?

In the Court’s ruling, the CTA was declared unconstitutional. Under the U.S. Constitution, Congress cannot pass laws that lack “a strong connection to any enumerated power to serve as a necessary or appropriate mans to achieve Congress’s policy objectives.” In short, the Court determined that Congress is acting outside of its constitutional power in implementing the Act, unfairly burdening businesses by making them reveal excessive and personal details about their work. The Act does not hold a strong enough to any real policy objective, and, given its failure to meet this basic constitutional requirement, it exceeds the Congress’s legal authority.

How Does the Ruling Affect Businesses Today?

The Court’s ruling does not yet affect businesses that have to report under the CTA. For the moment, the decision only applies to businesses directly involved in the case, which includes the National Small Business Association and members of the National Small Business Association. This conglomerate of businesses makes up approximately 0.1%-0.2% of small business owners in the country. For now, the other 99.9% of business owners should continue reporting under the CTA as normal. These reporting requirements could, however, change in the future.

How Could the Ruling Affect Businesses Going Forward?

The real implication of the ruling lies in how it might affect businesses moving forward. The decision exists within an already heated debate around the tension between regulatory oversight and constitutional freedoms in this country. On the one hand, the government wants to ensure that businesses are complying with all of its rules and regulations. On the other hand, it costs time and money to comply with the CTA, and businesses do not generally want the government privy to their personal details, especially when they are already working hard to stay in compliance with the Department of Treasury’s requirements.

The District Court ruling is likely to be appealed, meaning the U.S. Supreme Court could end up looking further into the case. If this happens, a SCOTUS decision would have far-reaching effects for businesses across the country, especially as the larger debate about regulation v. privacy continues to play out on the national stage.

How Can Businesses Stay Up to Date on the CTA in the Future?

As soon as the District Court issued its opinion, the U.S. Department of Treasury Financial Crimes Enforcement Network (FinCEN) issued a statement, laying out what the ruling means for those involved in the case and those not involved. For updates, you should monitor FinCEN’s website to track any information released.

Additionally, it is smart to speak with an estate planning attorney that can help you figure out how these kinds of rulings affect you and your estate. With so many moving targets, it is important to stay abreast of changes in case law and legislation, especially when penalties for non-compliance can be devastating for small businesses. If you have questions about how CTA enforcement is changing and what that means for you, call a trusted Boulder estate planning attorney that can interpret these changes and apply them to your business.

Speak With a Boulder Estate Planning Attorney Today

If you have questions about the CTA, the District Court case, or other regulations that might apply to your business, contact the Braverman Law Group today. At the Braverman Law Group, we understand that it can be difficult to keep up with how the law changes over time. Our Boulder, Colorado lawyers are experts in monitoring these developments and helping clients understand how the changes affect their individual circumstances. At the same time, you should always be thinking about how changes in your business might affect your estate plans, and our team of Boulder estate planning attorneys can walk you through that process during an initial or future consultation.

For a free, no-obligation consultation with a Boulder estate planning attorney that has your best interest in mind, give our office a call today at (303) 800-1588. If you prefer, you can also fill out our online form to tell us about your legal issue and have a member of our team reach back out to you as soon as possible.

What is a Will Contract?

A will contract is an agreement made between two individuals (most frequently made between spouses) that dictates how each person will distribute his or her assets. During marriage, money becomes comingled, making it difficult to differentiate between each spouse’s assets as the marriage goes on. With the will contract, each spouse commits in writing to a specific arrangement for his or her assets upon death. That way, for example, if one spouse comes into the marriage with more assets than the other, he or she commits to giving that same percentage of assets to his or her heirs after death, as opposed to giving a smaller percentage after the couple’s assets have become comingled over time.

Take an example. If a husband and wife have children from another marriage, and each spouse wants to make sure his or her children are protected, the couple might consider making a will contract. Without a will contract, the following scenario could occur: the husband passes, the wife legally inherits the husband’s assets, and the wife then fails to honor the husband’s wishes by giving money to his children. She instead inherits the assets and gives the money directly to her children, bypassing his children entirely. If the pair had a will contract, the wife would be obligated to give a certain percentage of her husband’s assets to his children. She would have signed an agreement binding her to look out for them, even after her husband is gone.

There are many provisions necessary in a will contract, including: how future disagreements will be handled, interpretation of the document, changes proposed to estate planning documents, and what (if anything) will cause the contract to expire. Because the will contract necessarily contains many different pieces, it is important to hire a thorough, detail-oriented estate planning attorney to make sure you include all of the essential provisions.

Why Consider a Will Contract?

Will contracts can make sure you, your family members, and anyone you want to provide for in the event of your death is taken care of according to your wishes. It also serves as a tool for you and your spouse to openly communicate about how you want to divide your assets when you are gone. Many times, couples creating a will contract hire the same team of attorneys to represent them both; in this way, the process can unite couples instead of dividing them, providing them a way to discuss their financial goals thoroughly, honestly, and with the expert opinion of an experienced estate planning attorney.

Why Not Consider a Will Contract?

Unfortunately, will contracts can, at times, be difficult to enforce. There are some courts that have decided that will contracts are ultimately unreliable and unenforceable, meaning these courts will rule on the division of assets regardless of what the will contract says. At the same time, other courts have issued opinions reinforcing the importance of the will contract, making it safer to have the document in case it becomes necessary.

Additionally, like any other document, will contracts are up for interpretation. Without the right attorneys, it can be easy to leave important details out of a will contract and therefore leave certain terms ambiguous in the process. For example, do you want an arbitration clause in your will contract? Do you want to waive your right to a jury trial in the event of a dispute? These are key terms of the will contract that you should consider, and without them, the contract could crumble under difficulties with interpretation.

It can also be expensive and time consuming to create a will contract, especially if you and your spouse anticipate having significantly different goals and needing different attorneys. You might decide that your prenuptial agreement, postnuptial agreement, or estate planning documents sufficiently cover your wishes and communicate how your money should be passed along. There are times when adding another document to the mix can add confusion, and it is important to make sure your documents do not conflict with each other as you move along through the process.

How to Decide Whether a Will Contract is Right for You

Ultimately, the decision about whether to get a will contract is an inherently personal one. There are always multiple ways to navigate the estate planning process, and the best route for you will always depend on your personal finances, relationships, and goals. To make an informed decision, we recommend you speak with a Colorado estate planning attorney that can walk you through your options and recommend a path that will help you make sure your loved ones are in good hands after you are gone.

Speak With a Boulder, Colorado Estate Planning Attorney Today

If you have questions about your estate planning process, contact the Braverman Law Group today. At the Braverman Law Group, we understand that beginning to think through tools such as a will contract can feel daunting, and we are committed to standing by our clients through every step of the process. Our Boulder, Colorado lawyers are experts in all things estate planning, and we are proud to offer personalized, thorough, empathetic representation for our clients that helps them achieve their financial goals and feel peace of mind at the plan they have put together.

For a free, no-obligation consultation with one of our estate planning attorneys, give us a call today at (303) 800-1588. If you prefer, you can also fill out our online form to tell us about your legal issue and have an estate planning attorney reach back out to you as soon as possible.

We always dissuade our clients from thinking this way. To state the obvious, we never know what’s around the corner. With no way of predicting the future, the best tool we have to ensure that our wishes are respected in the long-term future is making a thorough estate plan as soon as possible. Below, we detail several reasons why now is the best time to start (or continue) your estate planning journey.

Tax Exemptions in 2026

The federal government is gearing up to significantly alter how it handles certain kinds of tax exemptions. For example, did you know that the gift and estate tax exemptions will all be cut in half in 2026? The lifetime gift tax exemption was $11.58 million in 2020, increased to $12.92 million in 2023, and is now scheduled to decrease to $6 million in 2026. As for the estate tax exemption, it currently sits at $12.92 million per person. In 2026, the exemption is scheduled to decrease to roughly $7 million.

These exemptions can have major implications for those trying to pass on assets to their heirs and loved ones. This means that if you want to do more in 2024 and 2025 to pass on gifts to loved ones, 2024 is the time to put plans into action. By waiting until the end of 2025, you risk missing out on a major tax benefit that will be substantially less beneficial within the next two years.

Inflation

Inflation has been significantly affecting our clients for the past several years, and it is important to keep this in mind when estate planning. For example, because the yearly gift tax has consistently been on the rise, it might be more feasible now for you to increase your yearly gifts to your loved ones in a way that was not possible several years ago. In 2024, the yearly gift tax sits at $18,000 per individual per year or $36,000 per married couple per year. Annual gifting is one way our clients move wealth across generations over longer periods of time, benefiting both themselves and their heirs in the process.

Even if you do not consider yourself to be a high-net-worth individual, changes in inflation will affect your estate plans. Inflation affects everything from property costs to retirement plans to the values of debts that you hold. By neglecting to account for inflation in your estate plans or by not revisiting your estate plan regularly, you may be missing out on an opportunity to properly account for changes in the national and local economies.

Circumstantial Changes

The list of possible circumstantial changes in a client’s life is immeasurable. Has one of your children gotten married? Has anyone gone through a divorce (or is anyone planning on pursuing a divorce)? Has there been a recent incapacity, or is there an illness in the family? These are all things to think about – even if none of these changes have taken a toll on you and your loved ones, it is worth your while to plan as if any of these events could happen at any time. By starting your estate plan now, instead of when you are in crisis mode, you can give yourself the best chance of financially succeeding through these difficult times.

Communication with Loved Ones

Estate planning is also a great way to make sure you are talking with those who will be affected by your plans in the future. It is beneficial to make sure those that will inherit from your will, as well as those that will be responsible for executing your will, have copies of all of the relevant documents and records. Having discussions about how your assets will be distributed allows for less confusion your estate plan, which in turn allows your loved ones to execute your plans efficiently. We always encourage our clients to communicate with their loved ones early and often regarding their plans, to make sure any possible bumps in the road can be addressed before they become insurmountable hurdles.

Where Do I Start?

Estate planning can be stressful, and oftentimes, taking the first step is the hardest part. If you do not know where to begin, contact a qualified estate planning attorney to set up an initial meeting. Go to your meeting prepared with questions about how factors like inflation and tax exemptions might affect your individual circumstances. At the end of the day, everyone is different, and everyone’s estate plan will necessarily be different. By finding an attorney that can tailor your plan to your priorities, you can make sure you look out for your own interests and the interests of your loved ones in the long-term future – and what better goal could you set as we ring in 2024?

Are You in Need of a Team of Estate Planning Attorneys in Colorado?

At Braverman Law Group, we specialize in wills, trust, and estates for clients in Colorado. Our team is proud to create thoughtful, detail-oriented estate plans for those that seek our services, so that our clients can do everything in their power to set their loved one up for financial success in the future. If you would like a free and confidential consultation with a member of our team, give us a call today at 303-800-1588. You can also fill out our online form to contact us and have an attorney reach back out to you as soon as possible about your estate plans.

In the summer of 2021, the Colorado governor signed the Colorado Privacy Act into law, and it went into effect exactly two years later. Now that the Act has been in place for six months, we are starting to see its positive effects on the lives of everyday Coloradans, and we are also starting to get questions about what some of the Act’s terms mean.

In short, the Colorado Privacy Act takes steps to protect individuals’ personal data. The more we use our phones, travel, make purchases, browse the web, and log onto social media, the more of our personal data is out there and potentially at risk of being used without our consent. With the Colorado Privacy Act, we, as consumers, maintain the right to access, delete, and correct our personal data. This data includes financial data, which is often part of clients’ efforts to protect their assets and guard against creditors, lawsuits, and other financial losses.

Protecting You Against the Sale of Personal Data

Importantly, the Act allows individuals to decide that websites cannot sell their personal data for the purpose of marketing – many sites, for example, use consumers’ data to keep records on which demographics are flocking to their pages, which they can then use to create targeted advertisements with the goal of selling more products to more people. With the Colorado Privacy Act, though, individuals can opt out of the processing of their personal data for targeted advertising.

Individuals are also now able to opt out of the use of the sale of their personal data and the use of their data for profiling, which happens when companies keep information on consumers to track what they like, don’t like, and might be interested in going forward.

Protecting You Against Broad Use of Cookies

You might have noticed the Act’s protections in place if you have noticed opt out “pop ups” on websites, which give you control over whether cookies can be used. “Cookies” are pieces of data that are stored within a web browser, such as Safari, Google Chrome, or Internet Explorer. If you allow your browser to use cookies, the browser can then retrieve the cookies at a later time to (again) tailor advertisements to you or profile you as a consumer.

Protecting You Against Entities’ Access to Sensitive Data

The Act also requires companies to obtain opt-in consent before processing certain types of sensitive data, such as: children’s information, genetic and biometric data, racial and religious beliefs, a mental or physical condition, sex life, sexual orientation, and citizen status. This is good news for parents who worry that their children’s information might be used or compromised against their consent, and it highlights the importance of monitoring your children’s online activity as they increase their digital footprint over time.

Protecting You through Data Protection Assessments

The Act includes a provision that mandates that companies must conduct regular data protection assessments. This kind of assessment helps companies manage the privacy risks that arise from their interactions with other companies and individuals online. If you are not aware of your employer’s efforts to keep your data safe, you have every right to ask about what is being done to identify and manage specific privacy risks.

Enforcement: How Does it Work?

Importantly, each Colorado Privacy Act violation is punishable by up to $20,000 and is enforced by Colorado’s attorney general. If the attorney general becomes aware of a violation, the attorney is required to issue a “notice of violation” and allow companies to fix the privacy issue within 60 days. After those 60 days pass, however, companies could be at serious risk of having to pay for their failure to comply with the terms of the Act.

The Act is, overall, a major step forward for the state of Colorado. Colorado is the third state in the United States to pass this kind of legislation, following California and Virginia. While the novelty of the Act leaves several questions about how well it will work, how strictly it will be enforced, and how easily individuals will be able to use it for their advantage, the beginning phases of the Act’s implementation have been positive.

To fully understand how the Act works and how it might affect you, we recommend that you contact an attorney that can advise you from a professional standpoint. As you think through your long-term plans, you should consider how to keep your information private so that your assets can be well-protected as you move forward. Most importantly, however, you should know your rights under Colorado law, and you should take action if you believe your rights might have been violated at any point.

Speak With a Boulder, Colorado Estate Planning Attorney Today

If you have questions about your rights and remedies under the Colorado Privacy Act, contact the Braverman Law Group today. Our Boulder, Colorado estate planning lawyers are committed to providing individualized services, holistic representation, and powerful execution of experience-based legal strategies. Our practice areas include estate planning, trust administration, special needs planning, Medicaid planning, and asset protection, and we serve clients throughout Colorado’s Front Range.

For a free, no-obligation consultation with one of our estate planning attorneys, give us a call today at (303) 800-1588. If you prefer, you can also fill out our online form to tell us about your legal issue and have an attorney reach back out to you as soon as possible.

How Does the Inflation Adjustment Lower My Taxes?

The IRS applies inflation adjustments to income tax brackets. Typically, the more you earn, the more you pay in taxes as a percentage of your income. A person who earns $40,000 per year will pay a lower percentage of their income than someone who earns $400,000. Next year, your taxes may be lower due to the rise of the minimum income that falls within each tax bracket range. For example, if you are single and earned $45,000 in 2023, you will pay 22% in federal income taxes this spring. After the newest adjustment, you will only owe 12% of your income earned in 2024. As the income that qualifies under each tax bracket increases, your taxes will decrease because you will fall into a lower tax bracket. However, this projection assumes that your salary will hold steady between 2023 and 2024. If you received a salary increase to account for inflation, you may fall within the same tax bracket as the year before. In this scenario, your taxes may not be lower in 2024.

Has the IRS Adjusted Social Security for Inflation?

The adjusted income tax brackets may not apply to Social Security beneficiaries, but the IRS has also applied a Cost of Living Adjustment (COLA) to Social Security income. According to a fact sheet from the Social Security Administration, beneficiaries of Social Security and Supplemental Security Income (SSI) have received an 8.7% COLA for 2023. In 2024, beneficiaries will receive a 3.2% COLA, which is increase of over $50 per month. This new rate will start in January 2024 for Social Security beneficiaries and in December 29, 2023 for SSI beneficiaries. As a result, beneficiaries will receive an increase in each Social Security check they receive. The increase can help ensure that Social Security checks keep at pace with inflation.

Contact our Boulder, Colorado Estate Planning Attorneys

Inflation adjustments to income tax may affect your estate planning goals. As inflation rises and falls, the tax on your income and your eventual estate tax. For all of your estate planning needs, call the Braverman Law Group today. Our estate planning attorneys can help you understand the impact of tax adjustments on your estate. We will guide you through complicated tax laws to understand how to maximize the benefit to your estate while avoiding surprise penalties. To schedule a free, no-obligation consultation with one of our trusted Colorado estate planning attorneys, give us a call at (303) 800-1588.

How Can I Use Tax Laws to Plan My Estate?

A recent Forbes article highlights several provisions in tax law that can help you with estate planning during inflation. First, take advantage of the increased lifetime gift tax exemption and generation-skipping transfer (GST) tax exemption. The lifetime gift tax exemption allows you to give away a large monetary amount in gifts throughout your lifetime without triggering taxation. The GST tax applies to inheritances that “skip” a generation (i.e., from your children to your grandchildren). The exemption allows you to set aside nontaxable gifts to benefit a grandchild, such as college tuition. In response to rising inflation, the IRS has increased the lifetime gift and GST tax exemption amounts. As a result, a higher monetary amount is now exempted from gift and GST taxes. To take advantage of these exceptions, you may consider giving a gift to your beneficiaries while they are still alive to reap the benefits of the increased exemptions.

If you are considering a gift to your beneficiaries while you are still alive, consider a gift in the form of appreciating assets such as stocks or real estate. Appreciating assets are a wise financial decision for two reasons. First, by gifting an appreciating asset while you are alive, your recipients can avoid estate and gift taxes on the asset. Second, as the asset appreciates, your recipients can take advantage of their increased value.

Finally, use a grantor retained annuity trust (GRAT) or charitable lead annuity trust (CLAT). A GRAT allows you to transfer assets to a trust and receive an annuity for a certain fixed time period. A CLAT allows you to transfer assets to a trust that pays an annuity to a charity for a fixed time period. When that time period ends, beneficiaries receive any remaining assets in either trust without paying taxes. Using these strategies, you can use inflation to your advantage and maximize the amount your beneficiaries receive.

Speak With a Boulder Estate Planning Attorney Today

Rising inflation may affect your estate planning strategy. To understand your best options, contact the Boulder, Colorado estate planning attorneys at Braverman Law Group today. Our attorneys can help you develop a gift and estate plan that takes full advantage of current tax rates. Whether you plan to form a trust or give a generous gift, we can help you maximize the amount your beneficiaries will receive. To schedule a free, no-obligation consultation with an attorney on our team, call us today at (303) 800-1588.

First, consider the size of your trust. In a recent Wall Street Journal article, Braverman Law Group’s Managing Attorney, Diedre Wachbrit Braverman, explained why the size of the trust can determine the most appropriate trustee. As she noted in the article, banks are more suitable for large trusts. However, they may not offer trustee services for small to medium-sized trusts. For mid-sized estates in the $1 million to $5 million range, a trust company or private professional fiduciary may be the best choice. Finally, private professional fiduciaries are appropriate for smaller trusts due to their more manageable cost.

Second, evaluate the professional trustee’s fee structure. As Attorney Braverman noted in the article, banks and trust companies tend to charge between 0.5% and 2% of the overall value of the trust. This fee covers services such as filing tax returns, accounting for funds withdrawn from or added to the trust, investing funds, and communicating with beneficiaries. In the alternative, banks and trust companies may charge a fixed minimum fee rather than a percentage, which usually ranges from $2,500 to $5,000. Conversely, private professional fiduciaries charge an hourly rate, usually around $150 per hour. They will also charge the trust for third-party investment management expenses. Professional fiduciaries’ fees are typically lower than those of an institutional trustee, such as a bank. Additionally, professional trustees often maintain relationships with service providers, such as realtors, that can lead to significantly lower rates for these services.

Finally, research the professional trustees you are considering to determine their reliability. Not all licensed professional trustees are reliable, and some have received disciplinary reprimands from their licensing boards. When choosing between professional trustees, be sure to review their qualifications thoroughly before making your final selection. No matter which type of professional trustee you hire, you should maintain an agreement specifying the basis for the trustee’s fees and the frequency at which the trustee receives payment. A private professional fiduciary should also purchase carry errors and omissions insurance in the event that they must compensate you for a professional error. Another key indicator of reliability is your ability to reach the professional trustee. If a professional trustee is available to reach by phone and email, they may be more reliable than a trustee without a designated line of communication.

Contact a Boulder, Colorado Trusts and Estates Attorney Today

Appointing a professional trustee is only one step in the complicated process of establishing your trust. To learn more about the trust and estate planning process, contact the Braverman Law Group for assistance. The attorneys at our Boulder, Colorado estate planning firm can help you explore various options for appointing a professional trustee to handle your estate. To schedule a free, no-obligation consultation with one of our dedicated estate planning attorneys, call us at (303) 800-1588.

What Are Your Responsibilities as a Trustee?

As a trustee, you are primarily responsible for making financial decisions about your parent’s trust. To effectuate these decisions, you may invest part of the trust, handle businesses held in trust, or manage assets held in trust, such as property. Braverman Law Group’s Managing Attorney, Diedre Wachbrit Braverman, delineated additional responsibilities of a trustee in a recent Wall Street Journal article. As Attorney Braverman explained, trustees administer a trust by supervising and collaborating with financial professionals, such as accountants, financial advisors, property managers, and estate planning attorneys.

Additionally, you should be prepared to serve as a trustee for an extended period of time depending on the complexity of the trust. For example, if beneficiaries are minor children, they may not inherit money for several years. Accordingly, a trustee should expect to manage the trust for the requisite time period until minor beneficiaries are old enough to receive assets from the trust. Conversely, if a trustee can administer the entirety of a trust’s assets at once, the process may take less than a year. However, before stepping into the role of trustee, you should ensure you understand the level of commitment required to responsibly handle your parent’s assets.

If you are not completely sure that you can handle the responsibilities of a trustee, you may wish to talk to your parent about appointing a professional trustee. Professionals often have significant experience handling trusts, and they tend to maintain close relationships with financial planners and property managers to aid the process of administering trusts. In the long term, hiring a professional may be more cost-efficient. In fact, professional trustees can often secure reduced prices for expenses related to handling your parent’s trust, such as real estate agent fees.

Contact a Boulder, Colorado Trusts and Estates Attorney Today

For more information about trusts, trustee actions, and other estate planning services, contact the Braverman Law Group today. Our Boulder, Colorado estate planning firm can assist one or both of your parents with all of their trust and estate planning needs. If your parents are considering a living trust, our attorneys possess the skills and dedication to help guide them through the process. To schedule a free, no-obligation consultation with one of our trusted Boulder estate planning attorneys, call our office today at (303) 800-1588.

What Problems Can Arise When a Child Is a Trustee?

One major issue with appointing a child as a trustee is the inherent conflict of interest. A child trustee is also a likely beneficiary of your trust. While the trustee must be fair in administering the trust’s assets, a child trustee must balance that obligation with their own interests in the trust. Problems can occur even when the child trustee does not intend to prioritize their personal interests. The sheer potential for a conflict of interest may lead a child trustee to believe their decisions are fair when they are actually self-serving.

Additionally, if you have multiple children, appointing one child as a trustee can breed jealousy among siblings. Some clients wish to designate all of their children as co-beneficiaries to avoid this precise issue. However, appointing multiple child trustees can lead to problems with agreeing on the important decisions that the role of a trustee requires. In addition to these problems, biases may arise if a child must administer a parent’s assets to a stepparent beneficiary, with whom their relationship may be more fraught.

What Traits Should You Consider When Appointing a Child as Your Trustee?

If you are considering appointing your child as a trustee, a Colorado estate planning attorney can help you determine whether your child is capable of the role. First, an attorney can interview your child to determine whether they are physically available to undertake the responsibilities of administrating your trust. A child who lives closer to you may be in a better position to attend meetings with your attorney or representatives at your bank. In addition to location, a child’s financial health may speak to their competency as a trustee. If your child has not managed their assets well, chances are high that they will not manage your trust well either. On the other hand, a child with stable finances or a background in finance may be equipped to carry out the duties of a trustee. Finally, your attorney can screen for the potential issues described above. For example, an attorney can ask your child about their sibling relationships or their ability to be impartial when administering your assets. Based on your child’s responses, your attorney can help you determine whether your child should act as a trustee.

If your child is not well-suited for the role, you should consider appointing a professional fiduciary. A professional has no stake in the distribution of your assets, which avoids conflicts of interest or tension among siblings. Choosing a trustee is an important decision, and you should consider all options before appointing your child to handle your trust.

Speak With a Boulder, Colorado Estate Planning Attorney Today

If you have questions about planning a trust or appointing a trustee, contact the Braverman Law Group to learn more. The Boulder, Colorado estate planning lawyers at the Braverman Law Group can assist with planning your estate and protecting your assets. Our qualified attorneys and certified financial planners will help you understand the important considerations in selecting a trustee to competently administer your trust. For a free, no-obligation consultation with one of our estate planning attorneys, give us a call today at (303) 800-1588.

First, professional trustees’ fees, when viewed as a percentage of the estate, are generally not high. For example, a professional trustee or executor may charge an hourly rate or a fee as a percentage of the estate. When considering the estate as whole, the extra percentage is often worth the assurance that your estate is in competent hands. Additionally, the fees usually amount to less than the amount an institutional trustee, such as a bank, would charge.

A professional trustee can also avoid or settle disputes between beneficiaries. If you appoint a family member to administer your trust, they may experience difficulties mediating between family members without damaging the familial relationship. If the family member is also a beneficiary, they may allow their personal interests to affect any disputes that arise. Conversely, a professional trustee has no personal relationship with your beneficiaries or any personal interest in your estate. Therefore, the professional can resolve conflicts with the impartiality required to handle your estate.

Finally, professional trustees can help secure lower fees for necessary service providers. For example, to administer your estate, a trustee or executor will likely need to work with an appraiser to value your assets or a realtor to sell your property. Professional trustees maintain relationships with service providers in the course of their business. To attract future business from the professional trustee, these providers often price their services at significantly lower fees. Because a professional trustee can secure lower rates, the charge to the trust for these services will be reduced. Hiring a professional can thereby result in lower fees than if you had appointed a family member as a trustee. Moreover, the money the trust saves in service provider fees can be distributed to your family member beneficiaries. For these reasons, hiring a professional trustee or executor may be the more cost-effective option. While a family member may not charge for their services, working with a professional can save you money in the long-run, which will ultimately benefit your loved ones.

Contact a Boulder, Colorado Trust and Estates Attorney

If you are seeking information about trusts or trustees, contact an experienced Colorado estate planning attorney. Braverman Law Group is here to assist clients with all their estate planning needs, including trusts, wills, probate and taxation, and other services to ensure your wishes are fulfilled. For a free, no-obligation consultation with one of our premier planning lawyers, call our office today at (303) 800-1588.