Colorado Estate Planning Blog

Thursday, May 18, 2017

Do you have an iPhone? Did you know about this feature?

 Did you know the iPhone has an app called Medical ID so that you can save your important health information? Your Medical ID provides medical information about you that may be important in an emergency, like allergies and medical conditions as well as who to contact in case of an emergency. You can create your Medical ID in the Health app that can be accessed without unlocking your iPhone. To set up your Medical ID:

  1. Open Health and tap Medical ID > Edit.
  2. Enter your emergency contacts and health information like your birthdate, height, and blood type.
  3. Turn on Show When Locked to make your Medical ID available from the Lock screen.

Read more . . .

Thursday, April 20, 2017

Tax Season Issues

During tax season, it is good to remember the consequences of gifting during your lifetime and after death. An inheritance tax is a tax levied on people who inherit property or money. Colorado does not have an inheritance tax, however if you inherit from someone who lived in a state that does have an inheritance tax you may get a bill from that state. Nebraska, Iowa, New York and Oregon are among the fifteen states that currently impose a state inheritance tax. Inheritance taxes are levied on the transfer of assets to heirs, based on the relationship of the inheritor to the deceased; spouses, children, or siblings often have different exemptions.
Read more . . .

Thursday, April 6, 2017

Why I charge on a flat-fee basIs for estate planning

There are several ways that attorneys bill clients, two of the most common are hourly and flat-fee. Hourly billing means that you are billed for each segment of an hour your attorney or their staff work on your file including anything from phone calls to e-mails to meetings. This billing is typically done in tenth of an hour increments, often with a minimum of .2 or .25 (meaning you are billed for 12 or 15 minutes even if your attorney only spoke to you for 3 minutes on the phone).

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Thursday, March 30, 2017

Why consider an IRA trust?

Individual Retirement Accounts (“IRAs”) were not originally designed to be wealth transfer vehicles. But effective January 1, 2003, the IRS issued Regulations with respect to the IRS code sections which create IRAs. The key aspect of the Regulations is that they now permit a non-spouse beneficiary to “stretch-out” the taxable required minimum distributions over his or her actuarial lifetime. The ability to compound the IRA investments, tax free, over a much longer period of time makes IRA’s now one of the most valuable assets when passing wealth down from generation to generation. This income tax stretchout can be obtained either by naming individuals as beneficiaries or by naming a trust as a beneficiary.

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Wednesday, January 11, 2017

Wills Don't Avoid Probate

There is a popular myth that a will helps avoid probate. This is one of the most common mistakes we encounter in estate planning. This mistake can easily be avoided with proper planning.

Probate is the court process that is used to transfer title of property from a deceased person to his or her heirs. Without a revocable living trust, all wills and intestate estates (when there is no will) must be probated (unless the deceased has $64,000 or less and no real property).

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Friday, December 2, 2016

Common Law Marriage

Colorado has common law marriage, which can cause legal nightmares when an unmarried couple breaks up or one of the partners dies. Many people mistakenly believe that a couple has a common law marriage after living together for a certain period of time. Living together for a long period of time may help to demonstrate the couple's agreement to be married, but the law does not require a specific time period. If you want to ensure that you are never deemed to be common law married, you should consider signing a Cohabitation Agreement with your girlfriend. The agreement can spell out the consequences of a break up or the death of a partner, avoiding costly and protracted legal proceedings.
Read more . . .

Monday, November 14, 2016

So you need to disinherit someone…

In many situations, it is necessary to disinherit a child, grandchild, or other heir.   Perhaps they are an addict and you don’t want to harm them by leaving them enough money to overdose.  Perhaps they receive a disability income and you don’t want to kick them out of their governmental assistance program.  If you create a dynasty trust you can deal with many issues by setting up a trust for these beneficiaries making their inheritance available for their health, education, maintenance or support, but preventing them from having direct access to assets. 

If you do not want to provide this “beyond-the-grave” assistance, or if there are other circumstances dictating a disinheritance, you have the right in Colorado to disinherit anyone except a spouse; which can be done by agreement.
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Monday, October 31, 2016

You can never have too many back-ups

When drafting estate planning documents, I strongly encourage clients to come up with as many back-ups as they can for the people named to act as fiduciaries (in this case, people or entities named to act on behalf of someone upon their incapacity or death). Careful consideration should be given to naming the correct person for the job.  For example, if your eldest child is a spendthrift, you probably wouldn’t want to name them as first in line to handle your money when you are unable to do so yourself 

In addition to naming the person who is the best choice today, I suggest clients name as many back-ups as possible so that if one person can’t act, you have someone of your choosing to succeed them.  I counsel my clients to think outside of the box; if your children aren’t the right choice, is there a friend or other family member who is more fiscally responsible?  There are also professional entities with which I work who can be named as Personal Representative, Trustee or other fiduciary. 

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Thursday, August 11, 2016

What is estate planning?

Estate planning is the process of accumulating and disposing of an estate to maximize the goals of the estate owner. The various goals of estate planning include, but are not limited to: making sure that the greatest amount possible of a person’s estate passes to that person’s intended loved ones and beneficiaries; paying the least amount possible of taxes on the estate assets; and minimizing or altogether avoiding the extent of the probate process to which that person’s estate might otherwise be exposed. In formulating an effective estate plan, it is important to consider:

  • the size of the client’s prospective estate and what kind of assets (real, personal, monetary) are held in it;
  • who the client’s loved ones and intended beneficiaries are, how old they are, and whether or not any of them have any special needs or disabilities;
  • the type and extent of the potential estate or death taxes to which the client’s estate may be subject; and
  • what the client’s future goals and financial needs may be.

Many people believe that estate planning consists of nothing more than making a simple Will. A properly implemented estate plan can entail much more than that.
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Tuesday, August 2, 2016

Common Estate Planning Mistake #5 – No Health Care Directives

A health care directive is a written document that informs others of your wishes about your health care. It allows you to name a person ("agent") to decide for you if you are unable to decide.


Without a Health Care Power of Attorney, Living Will and HIPAA Authorization, the medical staff has no instructions for your medical treatment if you are unable to directly communicate your preferences. Do you want to be kept alive on a machine? Do you want heroic but expensive medical techniques to be used to prolong your life? You can make a stated preference on these items and other crucial items within your Health Care Directives, and also appoint a close friend or family member to make crucial decisions on your behalf.

Read more . . .

Thursday, July 28, 2016

Common Estate Planning Mistake #4 – Leaving Assets Outright to Beneficiaries:

Assets that are left outright to heirs and beneficiaries are exposed to creditors, predators and divorcing spouses.

Many of my clients choose to leave assets in trust for their heirs’ benefit. Assets left in trust are totally asset protected. The beneficiaries still have access to the funds but creditors, lawsuits, divorcing spouses, or in-laws who are spendthrifts cannot touch the assets inside the trust. This also helps ensure that when the heir passes away the asset goes where the original owner wants it to go and helps avoid unintended beneficiaries (like ex-spouses or estranged heirs).
Read more . . .

Sommers Law Group, LLC assists clients throughout Denver, Jefferson County, and Arapahoe County, Colorado.

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