Estate Planning | Administration
Estate Planning
The majority of people would like to make sure that their life savings, investments and home are transferred to their family members.
Some of the best reasons to have an estate plan and meet with an experienced attorney are as follows:
Pick the person that will handle your affairs upon your death or disability.
Discuss the potential for probating estates in multiple state courts. That farm land in Kansas or condo in Arizona may trigger a second probate, costing thousands of dollars.
With today’s high divorce rate, it is very common to divide assets between two sets of children.
A lot of people are unmarried, and there is not a “standard way” to leave assets to family and friends. Some give assets to their nieces, nephews, charities, significant others, needy relatives, or a combination of all of the above.
People getting married late in life really need to assess the benefit of prenuptial agreements, and a will or a revocable trust.
Andersohn Law Office, PC can advise you on all these issues and draft a will that will accomplish them!
We can also prepare a living will, or advance medical directive, that ensures that your medical team knows what type of care you want if you become incapacitated. We help you make those hard end of life decisions so you don’t leave them to your loved ones to face for you.
Power of Attorney: The odds are nearly 100% that at some point before your death you will need assistance to manage your financial, business, medical, and personal affairs. A power of attorney allows you to pick the persons to assist you. In these times of technology, who will access and maintain your digital assets and digital devices in your time of incapacity?
With the medical impact of HIPAA, you need a power of attorney. We can prepare the documents that will allow your loved ones to assist with your care, without overruling your personal choices about your end of life decisions.
Probate
Many people have the misconception that if they have a will, revocable trust, are married, or own property jointly that they will not have to go through probate.
Whose estates have to be probated?
a. Any person that dies owning real estate in their sole name or in tenancy in common must go through probate.
b. If a person owns assets (non-real estate) valued over $70,000.00 (2020), said assets must be probated.
c. A person with a revocable trust, who has assets that were not transferred into the trust, with a value in excess of $70,000.00 must probate those assets.
Stated another way, whose estates don’t have to be probated?
a. A person whose assets (bank accounts, real estate, automobiles, and brokerage accounts) are all owned in joint tenancy with a right of survivorship, do not have to go through probate.
b. A person with non-real estate assets worth less than $70,000.00.
Should probate be avoided?
Many people believe probate should be avoided at all costs because of the misconception that a probate attorney will receive a percentage of the estate as his or her fee. In Colorado, the majority of attorneys charge an hourly fee to probate estates.
A middle class couple in a long term marriage can avoid probate of the first spouse to die by owning all of their assets in joint tenancy.
Some clients are concerned that if their estates are probated that their assets will be disclosed to the public. This is not a valid concern as probate actions filed in the court system are not accessible by the general public.
The benefits of probate:
The primary benefit of going through the probate process is to have a person that you absolutely trust (a spouse, child, or professional) make sure that your assets are transferred exactly as you state in your will, with complete disclosure to all beneficiaries (per an inventory and final accounting) and to allow your beneficiaries the opportunity to give a court notice if something is not handled correctly.
An attorney’s obligation is to assist the personal representative (sometimes referred to as the executor) to probate the assets per the terms of the decedent’s will in accordance with Colorado law.
A tax benefit of having assets pass through probate to the next generation is that the beneficiaries will receive a stepped up basis equal to fair market value at the date of death. This means that if you bought IBM stock for $10,000.00 and it is worth $30,000.00 when you pass away, your children could sell the stock immediately after your death and not pay any income tax. If you gifted the stock to your children prior to your death, they would have to pay income tax on the $20,000.00 gain if they sold it immediately.
Estate Administration - Part I
Probate doesn’t have to be stressful – hire experience!
The death of a spouse or parent is an extremely emotional time. Since 1987, Nathan L. Andersohn, Esq. has been helping clients get through this difficult period in their lives. The process of contacting an attorney and handling the financial affairs as set forth in the decedent’s will/trust or by state statute (if no will is found) doesn’t have to add to the stressful situation.
Mr. Andersohn’s education and experience in accounting, law, and real estate is tailor made for a probate lawyer. After nearly three decades of reviewing financial statements, attending real estate closings, litigating estate disputes, filing insurance claims, and reviewing creditors’ claims, he is fully prepared to handle your estate.
The initial benefits of meeting with an attorney experienced in probate administration include receiving answers to basic questions concerning Colorado law, discussing the timeline for the process, and receiving an estimate of attorney’s fees to complete the process.
Estate Administration - Part II
The Process
The original will is submitted to the appropriate court with a Petition Order, Letters, and other documents to open the probate action. Well over 90% of all probates are opened as informal and unsupervised actions.
Real property and personal property of the deceased are not tied up in probate long-term. In fact, many properties are sold promptly after the probate is opened.
If the deceased did not have a will an Application for Informal Appointment of Personal Representative is filed along with other documents to open probate. The assets are then distributed to heirs per Colorado Statutes.
Andersohn Law Office, PC will assist the personal representative in completing all acts necessary to complete the probate process. A middle-class estate in which family members are not in conflict may often times be completed in a little over six months.
The Initial Meeting
At the initial meeting, the client should bring the original will/trust (if available), a copy of the death certificate (if it has been received) and a summary of all assets, including insurance, real estate, motor vehicles, pensions, stock assets, IRA’s, 401k’s, bank accounts, and interest in any business or investments. If possible, it would be good to bring documentation of the assets (i.e. deeds, car titles, last bank statement, etc) however, there will be plenty of time to assemble that information after the initial meeting. An attorney will also need a list of the names, phone numbers, and addresses of all people that will inherit the assets from the decedent.
Probate Litigation
Fiduciaries in Colorado have many obligations to heirs and beneficiaries of wills and trusts. The statutory requirements and deadlines must be strictly followed. If a beneficiary or heir discovers any impropriety in a fiduciary’s handling of the affairs of an estate it may be necessary to file a legal action to protect the assets and rights of family members. It is best to seek legal advice as soon as possible before assets are distributed. The Andersohn Law Office, PC represents clients in probate litigation.