Colorado Estate Planning Blog

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).
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Thursday, July 21, 2016


      An outright inheritance to a child exposes that inheritance to a greater risk of loss. With a 50% divorce rate, multiple marriages, lawsuits and economic instability, your child’s inheritance is more vulnerable to unexpected loss than before. The money you leave your daughter may never reach your grandchildren.

    Many people haven’t thought about protecting the family money once it is inherited by their child. Usually because they have “good” children with no “problems” and don’t think they need this type of protection.
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Monday, July 11, 2016

Common Estate Planning Mistake #2 – Thinking Your Finances are Too Simple for an Estate Plan

Many people assume that their financial or family situation is so straightforward that they don’t need to draft formal documents, like a will. Sometimes they assume that establishing joint tenancy (sharing ownership in personal property, such as a home) or joint ownership over financial accounts is enough to protect their assets.

The reality is that no one’s life is as simple as it seems—and even if it is, you should still consider putting protections in place to help ensure that your wishes are known.

Here is an example of how something that seems simple can go wrong.  A widow adds the name of her adult daughter as a joint account holder, so that both of them have the authority to sign checks in order to pay bills.
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Thursday, July 7, 2016

Common Estate Planning Mistake #1 – No Estate Planning Whatsoever

You would be surprised how many people choose to let the State determine who will receive their assets at their death.  If you don’t have a Will, the laws of Colorado will determine who manages your estate, who gets your assets, and when they will get the assets (this is called intestacy). 
If you have minor children, you should have a Will to appoint guardians for your children if you and your spouse die before they turn 18. If you do not choose guardians yourself, you can almost be assured that members of your family will fight over this, creating emotional and financial turmoil for your children at the worst possible time. Ultimately, the laws of Colorado, often through a lengthy and expensive court process, will determine who becomes the guardian of your minor children.

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Tuesday, June 28, 2016

Spouse doesn't know finances

      Your surviving spouse will need to access money immediately to cover funeral expenses. There may also be hospital bills, and, of course, all of the normal expenses that come with everyday life. So that your spouse won’t have to search high and low trying to figure out where the accounts are located or how they can access money, you need to make sure your loved ones know where to find this information.

      Walk through all of your financial accounts with your spouse so she understands how to withdraw funds as needed. It’s also helpful to leave a few lists in a safe but easily accessible place:

  • A password list for all your online accounts and memberships
  • A list of all your accounts and memberships – both online and offline – along with any necessary instructions
  • A list of your estate planning documents and their location
  • A list of all lawyers, financial planners, accountants and others who worked with you

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Wednesday, April 20, 2016

Common Law marriage in Colorado

Colorado has common law marriage, which can cause legal nightmares when an unmarried couple breaks up or one of the partners dies. You should consider signing a Cohabitation Agreement with your significant other if you live together to avoid the inadvertent appearance of marriage. The agreement can spell out the consequences of a break up or the death of a partner, avoiding costly and protracted legal proceedings.

      It will save you some money in the long run, because the Cohabitation Agreement allows the individuals to determine in advance who will keep specific assets and what will happen to assets that have been purchased jointly if they separate or die. Cohabitation Agreements can also help you protect any assets that you may have (e.
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Thursday, April 14, 2016

What is Estate Planning

Professionals tend to throw around terms that are common for their particular industry, but sometimes forget that not everyone uses those terms on a daily basis.  Clarification is often necessary.

        Your estate consists of all the assets you have accumulated during your lifetime, including real estate, bank and brokerage accounts, retirement plans, life insurance, and even your junk.

        Your plan needs to allow you to stay in control of your estate for as long as possible. Your plan needs to remain flexible to allow for changes in the law and changes in your personal desires.
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Friday, April 1, 2016

Digital Assets

What should you do about passwords, usernames and security questions?

        It is important to figure out what needs to be preserved, what can be left to lapse, and who should be able to access these various accounts. There are a number of cloud storage sites where you can store your passwords, and then you only need to give someone the password to access that information. Alternatively, you can leave the password to access your personal information in a safe deposit box or with your attorney. 

        My clients have a binder with forms that provide a means for leaving such information with their will and/or trust. Dealing with digital property is still in its infancy, and technology is ever changing, so there are no perfect solutions.
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Thursday, March 10, 2016

Estate Planning

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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Thursday, March 3, 2016

Trust in a box

Why do I need to pay an attorney when I can buy software for $9.99 to do the same thing?

There are many reasons that the “do-it-yourself” software, forms, or websites are not a good idea. Of course, bottom line, no one will know if you made a mistake in your “do-it-yourself planning” until after you are deceased. And then it’s too late.

The main reason people do a trust-in-a-box is to save money.  Saving money is always a worthy goal. Take a quick inventory of your home. Your big screen TV may have cost more than my estate planning fees. The sales tax and registration fees on that SUV are far more than most estate planning fees. And, what about that expensive one week vacation you took last year? Yet, do you really believe that your children deserve a $9.99 trust-in-a-box?

Estate planning isn’t just about boilerplate legal documents. It’s really about having a support team of advisors that you have come to trust for their experience, expertise and interest in helping you achieve your goals.

It is not advisable to cut corners to save money where it counts the most–with your loved ones.  Folks will spend hours researching a computer system and update it regularly so that they have the latest and greatest system available.  If you go to that kind of trouble for a computer, why would you want to cut corners on your family’s well-being and security?

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

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