COVID-19 Update: You can do Your Planning From Home

While many people put off thinking about death, recent policy initiatives have made this not the case for many. With a dramatic increase of states considering right-to-die initiatives—that make it possible for terminally ill patients to use medicine to end their lives—strong opinions over the topic are rampant. Colorado passed The End-of-Life Options Act (the Act), providing terminally ill individuals with the right to use prescribed medication to end their lives. Although many individuals do not think about how this Act could impact estate planning matters, it does. There are critical estate planning measures individuals with terminal illnesses must take to aid their loved ones after their death.

After failing to pass in the Colorado legislature, the End-of-Life Options Act was placed on the Colorado ballot in 2016. This initiative passed and led to the bill’s enactment, which allows terminally ill people to request assistance in dying—but in only certain defined situations. To request a prescription for life-ending medication in Colorado, a patient must be: at least 18 years old; a Colorado resident; mentally capable of making and communicating health care decisions; diagnosed with a terminal disease in which they will die over the next six months. Beyond these requirements, the patient will only be prescribed the medicine if they make three requests—two verbal and one written— for the medicine at least fifteen days apart in front of two qualified, adult witnesses. The doctor must also offer the patient the opportunity to withdraw the request for the medication before providing the prescription.

For individuals with a terminal illness, it is critical to have an estate plan in place before they pass away. This is because an estate plan explains how individuals want to be cared for in their final days and what measures should be taken—this can include taking actions legalized under The End-of-Life Options Act, if the individual has a terminal illness. Otherwise, it provides instructions on the medical interventions they want to be taken, and who should make decisions on the individual’s behalf if they become incapacitated. Additionally, creating an estate plan provides for how, and to whom, they want their assets to be distributed. If a person does not have an estate plan before they die, the court will decide how their assets will be handled. While creating an estate plan—and specifically making end-of-life decisions—may be uncomfortable, it alleviates a major source of stress in the end.

Those who are in the midst of divorce proceedings or planning a divorce should consult a Colorado estate planning attorney to discuss any implications of the life change. Probate courts do not consider the circumstances surrounding a couple’s separation, and consider the couple married, until a judge signs a final divorce decree. As such, individuals must amend their documents in a timely manner, to avoid unintended consequences.

Understandably, those involved in divorce proceedings may become overwhelmed with the time, energy, and logistics that necessitates this life change. However, individuals should prioritize reviewing and modifying their estate plans so that the changes are enforceable in court. There are many components to a complete estate plan, and concerned parties should address each facet.

Specifically, parties should review their:

  • Health care proxy
  • Power of attorney
  • Will
  • Trust
  • Prenuptial and Postnuptial agreements

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The federal gift and tax application exclusion amount, or exemption, was raised from $5.49 million per individual to $11.58 million per individual last year. This means that a married couple can transfer about $23 million without having to pay a gift tax or estate tax. However, the federal gift and estate tax exemption is set to decrease again in 2026. On January 1, 2026, the exemption is scheduled to revert to the previous limit, which is estimated to be around $6 million per individual at that time, though, the exact amount depends on inflation. According to federal regulations, individuals and couples who take advantage of the exemption prior to 2026 will not be adversely affected when the cap decreases. The increased limit has inspired many families to consider ways of taking advantage of the exemption before it decreases. One way families have considered doing so through Colorado estate planning measures is by creating a Spousal Lifetime Access Trust.

A Spousal Lifetime Access Trust (SLAT) is a gift from one spouse to an irrevocable trust with the other spouse as the designated beneficiary. Unlike some similar trusts, the SLAT is established by a gift while both spouses are still alive. Other family members such as children and grandchildren can also be beneficiaries of the trust. A SLAT allows the donor spouse to transfer up to the exemption limit without incurring a gift tax. The value of the assets in the SLAT is excluded from the donor spouse’s gross estate and not subject to the estate tax upon the donor’s death. The appreciation of the SLAT assets may not be subject to estate tax, as SLATs are excluded from the beneficiary spouse’s gross estate and not subject to an estate tax when the beneficiary spouse dies.

The beneficiary spouse can request distributions from the trustee during their lifetime if needed. The trustee can then approve the request and distribute the income or the beneficiary spouse. However, the distributions will be reintroduced into the taxable estate, and the goal of a SLAT is to allow the trust assets to grow for future generations outside of the taxable estate. The SLAT has some drawbacks and risks, and a married couple’s particular personal and financial circumstances should be considered before setting up a SLAT. Consult with an estate planning lawyer to determine if a SLAT is right for you.

With the recent signing of the $900 billion pandemic relief package, individuals have begun receiving stimulus checks in the mail. Because this was the second stimulus check—and there have been talks of a third, $2,000 check—many have questions about whether these checks will impact their Colorado estate plan, and what to do if a deceased relative received a check. Because the COVID stimulus checks are complicated and may implicate other aspects of a person’s life, below is a discussion of the common questions about estate planning and stimulus checks.

How Much is the Stimulus Check?

The plan approved by Congress—and signed into law by the president—provides a $600, one-time payment for most adults, plus $600 per dependent child. However, couples making $174,000 or an individual making more than $124,500 will not receive a stimulus check. Recently there has been discussion of another $2,000 stimulus check, but there is no indication of whether this proposal will pass both the House and the Senate.

It is laudable when people start to make estate planning decisions. However, meeting with a Colorado estate planning attorney for the first time can often be an overwhelming experience. Estate planning attorneys are highly-focused in the field, ready to make sure an individual’s assets are prudently managed and ensuring an individual’s loved ones receive inheritances without issue. Below are common questions that will help individuals evaluate various estate planning attorneys and determine if a prospective estate planning attorney is right for them.

Is Estate Planning Your Primary Focus?

Individuals should only consider estate planning attorneys who answer “yes” to this question. Many attorneys may practice multiple areas of the law, but estate planning is a special legal endeavor. An estate planning attorney will know all of the legal statutes surrounding estate planning and stay updated on any changes to Colorado estate planning law. They will also have the strategic knowledge to effectively draft your planning documents.

How Long Have You Been Practicing?

It is critical to find the most experienced attorney possible, because they will have the most knowledge about preparing effective estate plans. These attorneys will have faced legal challenges from the courts and will be prepared to overcome any obstacles that come their way. Although they are often experienced enough to avoid estate planning complications, it is better to be ready for any unforeseen complications.

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When a senior reaches full retirement age, they can elect to receive monthly Social Security benefits. However, for many reasons, individuals often elect to delay filing for Social Security, either to increase the monthly benefits they will later receive or to continue working and avoid paying taxes on these benefits. Because filing for Social Security and delaying the benefits is a personal decision, and can have broad implications on a Colorado estate plan, below are some common questions aging individuals have about the Social Security process and if they should delay their filing.

What is the Full Retirement Age for Social Security Benefits?

The full retirement age – where seniors are entitled to start receiving their full monthly benefit – depends on an individual’s year of birth. For those born between 1943 to 1954, the full retirement age is 66 years old. For individuals born between 1955 to 1959, the full retirement age is between 66 years and 2 months to 66 years and 10 months (increasing by two months each year). For everyone born in 1960 or later, the full retirement age is 67 years old. It is also important to note that people can file for Social Security benefits as early as 62; however, they are not eligible to receive their entire monthly stipend until they reach the full retirement age.

Am I Eligible to Delay My Social Security Benefits, and What Will Delaying Them Do?

It is a common misconception that seniors must file for Social Security benefits once they reach full retirement age. Rather, seniors have the option to delay their filing, which means they are electing to not receive benefits until a later age, with the knowledge that their benefits will then be more per month. Delaying can grow a person’s benefits up to 8% per year until the age of 70. For instance, if a senior is entitled to $1,500 per month at the full retirement age of 67, they can increase their monthly benefits by $360 if they wait until age 70 to file.

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The attorney-client privilege and duty of confidentiality are two of the most essential recognized privileges. They protect conversations and dealings between a client and their attorney. Colorado courts have consistently maintained these privileges to ensure full communication between lawyers and their clients, allowing the parties to resolve legal issues effectively. Although the privileges are critical during a client’s lifetime, it is equally important that individuals understand how these privileges extend after the client’s passing.

In a recent opinion, the Colorado Supreme Court addressed the critical issue regarding which party holds the attorney-client privilege after the client’s death. The record indicates that when the decedent passed, he left all of his possessions to his widow and named her his personal representative. However, the decedent’s former wife made a claim against the estate based on promissory notes. The man’s widow did not know of the notes’ existence until she received the claim. The widow asked the decedent’s attorney for all of her deceased husband’s legal files. However, the attorney refused, citing confidentiality. In addressing the woman’s request, the court reviewed the interplay between attorney-client privilege, confidentiality, and a personal representative’s duty to settle a decedent’s estate.

Under Colorado Probate, Trusts, and Estates Law, section 15-12-709, grants personal representatives the right to a decedent’s property. Colorado Probate Code defines “property” to include real and personal property or any interest that may be subject to ownership. When a personal representative requests access to intangible property, the court must evaluate whether the decedent had any property right to them. Generally, clients do not have a property right to their full legal files.

Trusts are an essential component of most Colorado estate plans. However, despite their importance, many individuals do not understand the basics of a trust, including their key concepts and terms. While trusts can sometimes be complicated, the following post breaks down the essential aspects and terms associated with a Colorado trust.

What is a Trust and Who is Involved in the Process?

A trust is a legal agreement involving at least three parties, where one party holds and distributes assets on behalf of another. The terms of the trust – which all parties must abide by – are included in a legal document called the trust agreement.

As mentioned previously, there are three parties involved in a trust agreement. The first party is called a trustor, who creates the trust and is giving away, or transferring, the assets. The second party is called the trustee, who manages the trust and its assets. The trustee is legally obligated to manage the trust in the best interest of those receiving the assets and also consistent with the terms of the trust agreement. The third party is called the beneficiary, who will receive the assets in the trust. They are called the beneficiary because they benefit from the trust. It is important to note that the same person can be in more than one of these roles, even at the same time. For example, often, the same individual will be the trustor and the trustee.

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When creating a Colorado estate plan and preparing for the future of an older loved one, there are many angles and aspects to consider. Beyond the regular benefits many aging people can receive from the federal government, additional benefits can be given if the loved one served in the armed forces. Through the Department of Veterans Affairs’ pension benefit programs, qualifying veterans or their surviving spouse can provide additional monthly support.

What Are Veterans Pension Benefits and Who is Eligible to Receive Them?

The pension benefit program is a needs-based program that provides a monthly stipend to the veteran or their surviving spouse. However, benefits are not dependent on any service-related injuries. The pension benefits can also help offset the cost of an in-home aide, a nursing home, or an assisted living facility. Because these services are often quite expensive, receiving these benefits can dramatically improve an older loved one’s quality of life.

The COVID-19 pandemic has forced many people to do long term thinking, evaluating their life and their future. Thus, many individuals are starting to create a Colorado estate plan, so their family is taken care of in case of their unexpected passing. Despite this recent estate planning trend, 62% of Americans do not have a will and thus are unprepared for what the future holds. Here are a few common misconceptions about developing an estate plan and why individuals should start now, regardless of their situation.

“I Don’t Have Enough Money to Need a Will.”

Regardless of income or assets, it is critical that people create a will. This way, any property, money, or belongings they have are given to the proper recipients. In Colorado, if a person dies without a will, the probate court decides who inherits the assets according to the state’s intestate laws. Depending on the situation, the process can take years as the court shifts through the necessary documentation and evidence.

Even if a person does not think they have anything that can be inherited, they may be wrong. Regardless, the worst-case scenario for everyone is to have a judge decide where their assets go, when all they have to do to void this is draft a short will.

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