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Trust Attorney Colorado Springs - Colorado Springs Wills Attorney

ESTATE PLANNING: An Overview

The Planning Process

Creating a plan for the eventual transfer of your assets to your family and loved ones is essential no matter what stage of life you are in. A carefully crafted estate plan will allow you to bestow a legacy to your family and will provide direction about what happens to your assets in the event of disability, incapacity, or death. A properly drafted plan can also provide you with the peace of mind that your intentions will be followed and that your family will be well taken care of in your absence. The Scriptures remind us that "A good man leaves an inheritance for his children's children" (Proverbs 13:22a - NIV). Buell & Ezell can help you ensure that your wishes will be carried out for generations to come through the utilization of various legal tools, such as:

  • Last Will and Testament - A document that defines how you want to distribute your estate, selects guardians for children, minimizes estate taxes, and establishes your personal representative.
  • Revocable Living Trust- Is a trust, created in your lifetime, which you may revoke or amend at any time. The use of a properly funded Revocable Living Trust may allow your estate to bypass the probate process.
  • Durable Power of Attorney (Financial)- A document that grants someone you trust with the authority to make financial decisions on your behalf, even after you become incapacitated.
  • Health Care Durable Power of Attorney- A document which names someone to make health care decisions for you (your "health care agent") if you develop a condition that makes it impossible for you to speak for yourself (become "incompetent"); and makes clear (in the form of written instructions to your health care agent) what medical treatment you would want if you can no longer speak for yourself.


The creation of your estate plan begins with learning about you, your family, and your financial situation during the initial consultation. This process involves asking you some sensitive and difficult questions regarding your goals of taking care of your family members in your absence. Once your goals are fully understood, Buell & Ezell will work with you to develop an estate plan that achieves your objectives and protects, preserves, and passes on all that you have worked so hard for.

The Importance of Proactive Planning

All adults (18 or older) should have an estate plan. One of the most important things a person can do is provide clear direction to guide his or her loved ones in the event of illness, incapacity, or death. After all, an estate plan is not really for you, its for the ones you leave behind. Creating an estate plan is a selfless act of love that will lessen your loved ones' burdens during one of the most challenging times of their lives. Additionally, most people find that peace of mind and satisfaction result from putting their affairs in order.

It is often said that everyone has an estate plan because when a person dies intestate (without a will) the courts are required to follow mandatory statutory guidelines to determine the disposition of the deceased person's estate. Which means that predetermined guidelines would be followed to distribute your property, regardless of your wishes. Additionally, if you have minor children and they are not survived by their other living parent, the courts would have to select a guardian for them. Do you want the State of Colorado's court system to determine where your assets will go after your death? Do you want a stranger from the court system deciding who will make decisions regarding your medical care in the event that you are not able to speak for yourself? If you are a parent, do you want a judge to determine who will be the guardian for your children, or would you rather choose the person who will take care of their health, safety, and well being if you are not able to be there for them? An estate plan gives you the freedom to make these critical decisions and prepares you and your family for the future. Deciding to proactively create an estate plan allows you and not the court system to make these all important decisions, and it will give you confidence that your affairs will be properly administered according to your desires. Furthermore, having an estate plan accomplishes several important goals, including:

  • Written Documentation of Your Wishes
  • Prevents Family Disputes
  • Establishes A Neutral Administrator To Settle The Estate
  • Provides For the Needs of Loved Ones
  • Establishes a Guardian for Minor Children
  • Reduces Delay in the Distribution of Your Estate
  • Reduces Estate Administration Costs
  • Vehicle for Charitable Giving
  • Provides Peace of Mind That Your Estate Affairs Are In Order
  • Estate Tax Savings (for Larger Estates)

 

WILLS: An Overview

Will - A document that directs how property shall be distributed upon a deceased person's death.

A will is the foundational document for most estate plans. It is a legal instrument specifying how a person's property and assets should be handled after death. A testator (the person making the will) can give instructions on how the property should be divided, who should receive what portions or specific items, and even who will take care of any surviving minor children. A will can also establish a trust or make gifts to charity. Without a will, the state determines how property will be distributed, and may impose a substantial tax burden on the estate. A carefully drafted will eases the transition for survivors by transferring property efficiently and avoiding many financial and administrative burdens. Despite these advantages, many estimates figure that at least seventy percent (70%) of Americans do not have valid wills. Wills vary from extremely simple single-page documents to elaborate volumes, depending on the estate size and preferences of the person making the will. Wills describe the estate, the people who will receive specific property, and may even provide special instructions about care of minor children, gifts to charity, and the formation of testamentary trusts.

Who Can Make a Will?

Any person of sound mind eighteen (18) years of age or older may make a will.

Who Needs a Will?

  • Anyone over the age of 18 who owns any property (whether personal or real property).
  • Single persons who want to decide for themselves where their property will go.
  • Spouses to protect their surviving spouse.
  • Parents to protect children and spouse.

Why Do I Need a Will?

  • Absent a will, state laws of intestate succession apply to the distribution of your property at death. In other words, the courts will decide where property goes based upon predetermined succession laws.
  • Upon your death, your spouse or estate may have to furnish bond and pay bond premiums, which can be avoided with a will.
  • Allows you to appoint a guardian whom you trust to take care of your children in your absence. The court may or may not appoint the same person. Why leave such an important decision up to a stranger in the court system?
  • Allows you to select a Personal Representative to administer your estate according to your wishes.

What Are the Benefits of Having a Will?

  • Assures that property will be distributed according to your wishes. Someone will inherit your property one day. You can determine who that will be.
  • Allows you to appoint a Personal Representative to administer your estate.
  • Allows you to appoint a Guardian for minor children.
  • Allows you to appoint a Trustee for a children's trust.
  • Provides for the most economical distribution of your property.
  • Can reduce delay in the distribution of your estate.
  • Can minimize expenses in the settlement of your estate.
  • Provides a vehicle for charitable giving.
  • Provides you with peace of mind that your estate affairs are in order.

Appointing a Personal Representative

A will usually appoints a personal representative (or "executor") to perform the specific wishes of the testator after he or she passes on. The personal representative need not be a relative, although testators typically choose a family member or close friend, as well as an alternate choice. The chosen representative should be advised of his or her responsibilities before the testator dies, in order to ensure that he or she is willing to undertake these duties. The personal representative consolidates and manages the testator's assets, collects any debts owed to the testator at death, sells property necessary to pay estate taxes or expenses, and files all necessary court and tax documents for the estate. The choice of a personal representative should include considerations of trustworthiness, personality, competence, integrity, willingness and ability to serve, business skills, and knowledge of the family.

Choosing a Guardian

Testators who have minor or dependent children may use a will to name a guardian to care for their children if there is no surviving parent to do so. If a will does not name a guardian, a court may appoint someone who is not necessarily the person whom the testator would have chosen. Again, a testator usually chooses a family member or friend to perform this function, and often names an alternate. The guardian(s) should be informed that they have been chosen and they should fully understand what may be required of them. The choice of a guardian often affects other will provisions because the testator may want to provide financial support to the guardian as they are rearing the surviving children.

TRUSTS: An Overview

 

Trust- A written document providing that property be held by one (the "trustee") for the benefit of another (the "beneficiary"). A trust may be created during the grantor's lifetime or after his or her death.

A trust is a legal device whereby a trustee (an individual such as a spouse or an institution, such as a bank or a law firm) manages property as a fiduciary for one or more beneficiaries. The trustee holds "legal title" to the property and the beneficiaries hold "equitable title" to the property and are entitled to payments from the trust income and sometimes from the trust corpus as well. Some essential terms are:

  • Grantor- the grantor is also known as the trustor or settlor. The grantor is the person who transfers the trust property to the trustee.
  • Trust Property- a trust must have property. Trust property includes assets like cash, securities, real property, tangible personal property, and life insurance policies. These assets can be either transferred during the life of the grantor ("inter vivos") or at his or her death ("testamentary"). The trust property is also referred to as the corpus, principal, or trust res.
  • Trustee- The trustee is the individual or entity responsible for holding and managing the trust property for the benefit of the beneficiary. Trustees can be a corporate fiduciary or any competent individual who is not a minor. The trustee holds legal title to the trust property. As such, the trustee has a fiduciary duty to the beneficiaries with respect to the trust property. In the event of a breach of fiduciary duty, a trustee may be held personally liable. Such breaches include failing to pay out distributions or misappropriation.
  • Beneficiary- the beneficiary is the individual or entity who will receive the benefits of the trust property. The beneficiary holds the beneficial title to the trust property. The trust document must clearly identify the beneficiary or beneficiaries.


Trusts are estate planning tools that can replace or supplement wills as well as help manage property during life. A trust manages the distribution of a person's property by transferring its benefits and obligations to different people. There are many reasons to create a trust, making this property distribution technique a popular choice for many people when creating an estate plan.

Creation of a Trust

The basics of trust creation are fairly simple. To create a trust, the grantor transfers legal ownership to a person or institution (the "trustee") to manage that property for the benefit of another person (the "beneficiary"). The trustee often receives compensation for his or her management role. As stated above, trusts create a fiduciary relationship running from the trustee to the beneficiary, meaning that the trustee must act solely in the best interests of the beneficiary when dealing with the trust property. If a trustee does not live up to this duty, then the trustee is legally accountable to the beneficiary for any damage to his or her interests. The grantor may act as the trustee himself or herself, and retain ownership instead of transferring the property, but he or she still must act in a fiduciary capacity. A grantor may also name himself or herself as one of the beneficiaries of the trust. In any trust arrangement, however, the trust cannot become effective until the grantor transfers the property to the trustee.

Testamentary and Living Trusts

Trusts fall into two broad categories, "testamentary trusts" and "living trusts." A testamentary trust transfers property into the trust only after the death of the grantor. Because a trust allows the grantor to specify conditions for receipt of benefits, as well as to spread payment of benefits over a period of time instead of making a single gift, many people prefer to include a trust in their wills to reinforce their preferences and goals after death. The testamentary trust is not automatically created at death but is commonly specified in a will and so as a will provision, the trust property must go through probate prior to commencement of the trust.

Example: A parent specifies in her will that upon her death her assets should be transferred to a trustee. The trustee manages the assets for the benefit of her children until they reach an age when the parent believes they will be ready to control the assets on their own.

A living trust, also sometimes called an "inter vivos" trust, starts during the life of the grantor, but may be designed to continue after his or her death. This type of trust may help avoid probate if all assets subject to probate are transferred into the trust prior to death. A living trust may be "revocable" or "irrevocable." The grantor of a revocable living trust can change or revoke the terms of the trust any time after the trust commences. The grantor of an irrevocable trust, on the other hand, permanently relinquishes the right to make changes after the trust is created.

Revocable "Living" Trust

A revocable living trust is an estate planning tool that deeds property to heirs (similar to a will), but permits the grantor to retain complete control over the property during his or her lifetime. The grantor may buy, sell, make gifts, amend or even revoke the trust at any time. This means that the grantor can take back the funds placed into the trust or change the trust terms at a later date if desired. Thus, the grantor is able to reap the benefits of the trust arrangement while maintaining the ability and flexibility to change the trust document at any time prior to death. Upon the grantor's death, the property passes to the beneficiaries, avoiding the delay and expense of probate. In the right situation, a Revocable Living Trust can be the key instrument which achieves your estate planning goals. In other areas of the country such as California and Florida, the Revocable Living Trust is widely used to avoid probate due to arduous and costly probate procedures in those jurisdictions. In Colorado, however, the probate process is fairly efficient, relatively inexpensive, and mostly confidential. Companies that promote or "sell" Living Trusts in Colorado are responsible for much of the misinformation regarding these trusts. For example, it is a common misconception that a living trust provides better tax advantages than a will. However, both wills and living trusts can be utilized in estate tax planning, accomplishing identical tax savings. Revocable Trusts are generally used for the following purposes: asset management, avoidance of the costs and delays associated with probate, avoidance of ancillary probate if real property is owned in more than one state, and to provide grantor(s) with a flexible estate planning tool which can be valid in other jurisdictions if moving from state to state is anticipated.

Irrevocable Trust

An irrevocable living trust is an estate planning trust, wherein the grantor does not retain control of assets or property. An irrevocable living trust may also be used to avoid probate. Because the grantor must permanently depart with the ownership and control of the property being transferred, such a device has limited appeal. However, irrevocable trusts are useful in life insurance planning as discussed below, particularly for larger estates.

Transferring Assets

It is extremely important to properly fund a Revocable Living Trust in order to avoid the probate process. It is estimated that over eighty five percent (85%) of trusts in the United States are unfunded, which means that clients pay for the benefits of a trust without actually benefitting from the arrangement. Buell & Ezell will assist clients with the funding process in an effort to transfer title of property into the trust.

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