Tanya Shimer 4/1/24 Tanya Shimer 4/1/24

Pet Trusts in Colorado

Clients often ask me if they can provide for their pets in their estate plans. The answer is yes – Colorado does allow for pet trusts – and many people use these as a means to ensure that their beloved companions are provided for if they are either disabled or upon their death.

Pet trusts are extremely useful in a number of situations. For most household pets, pet trusts are used as just-in-case planning, very similar to naming a guardian in your will for minor children. This ensures that your pets are provided for without burdening your loved ones. For pets with a long lifespan, such as tropical birds, pet trusts may be viewed as a necessity so that pet owners can provide certainty of care for pets that will almost certainly outlive their human companions.

In general, trusts need certain types of beneficiaries before they will be recognized and upheld by the law. Typically, these types of beneficiaries have been either ascertainable individuals or charities. Therefore, historically, it was difficult to provide for the continuing care of pets after death. In the past, estate planning to care for pets involved leaving assets to a trusted friend or family member with the understanding that they would use the assets to care for the pet. Although this method has certainly worked, there have undoubtedly been times when the pets have not been taken care of in the way that their human counterparts would have expected or the pets have not been cared for at all, with the trusted friend or family member using the assets for self-benefit instead of the benefit of the pet. Finally, the most obvious person to care for a pets physical needs may not be the best choice to manage the assets placed in the trust for the benefit of the pet. Pet trusts can accommodate this practical reality.

PET TRUSTS IN COLORADO

Many Colorado estate planners draft their pet trusts to allow pet owners to leave assets for the benefit of their pets as well as to allow the pet owners to designate both a pet guardian to manage the care of the pet and a trustee to manage the assets in the trust and make appropriate distributions to the guardian. Because of this separation of duties, the creator of the pet trust can ensure that the best person is selected to care for the pet and the best person is selected to manage the assets funding the trust for the pet.

SPECIFICS OF THE COLORADO PET TRUST

Under Colorado law, pet trusts operate in the following manner:

Assets can be placed in trust for the benefit of a pet.
The trust can be written so that if the pet is pregnant at the time the trust goes into effect, the trust will remain in force to provide care for the offspring of the pet.
The trust will remain in effect until there is no living animal covered by it, unless an earlier termination is provided for in the trust itself.
The trustee is not allowed to use any portion of the principal or income of the pet trust for the trustee’s benefit or in any way that is not for the benefit of the animals covered by the trust.
The creator of the trust has complete freedom to designate where any assets left in the trust upon its termination should go.
The appropriate use of the trust funds can be enforced by a trust protector designated in the trust instrument, by any person having custody of an animal for which care is provided by the trust, by any beneficiary designated by the trust creator to receive assets at the termination of the trust, or, if none of the above, by an individual appointed by a court if someone makes an application to the court to review the use of the funds.
If there is ever a situation in which a pet trust comes into effect but there is no trustee able or willing to serve, a court has the authority to designate a trustee and make other orders and determinations so that the intent of the creator of the pet trust will be carried out.

WHEN TO SET UP A PET TRUST

Pet trusts can be set up at death, at disability, or immediately upon signing a trust instrument.
Pet trusts are typically set up in a last will so that upon the death of the creator of the will, the pet trust is established and funded.
However, pet trusts can also be established in a revocable living trust so that upon the disability of the creator of the revocable living trust, a pet trust will be established to provide for continuity of care of the pet or pets.
Additionally, at any other time, any individual can set up a stand-alone pet trust to establish a trustee and fund a trust for the benefit of a pet.

Tanya Shimer 3/5/17 Tanya Shimer 3/5/17

Medical Power of Attorney - Choosing Your Agent

In completing your POAs its important to choose an appropriate agent. Here are five criteria to think about in relation to choosing an agent for your medical power of attorney.

1. Personal belief: Since the concept of withholding artificial-life support runs contrary to the teachings of some religions and is a very personal decision, it is helpful to find a healthcare agent who understands your feelings in this regard and whose own beliefs are not contrary to your own.

2. Communication: It is important to choose someone you are comfortable speaking with about your health care wishes and it should be clear to you that not only do they understand them but they will be able to communicate these to your health care providers and family members if necessary.

3. Practical reality: Its critical that the person you choose is willing to accept responsibility and agree to act as your agent - "ready and able to serve".

4. Voice: In choosing an agent be sure that they will be able to speak up and stand firm on your behalf - even if faced with physicians who are advising otherwise or other close family members who disagree.

5. Availability: Make sure this person is likely to be accessible and capable of serving as your agent well into the future.

Tanya Shimer 3/5/17 Tanya Shimer 3/5/17

Revocable Living Trusts In Your Estate Plan

Estate Planning: The Use of a Last Will versus a Revocable Living Trust

Many clients come in asking about setting up a Trust rather then a Will for their estate planning. Trusts are very trendy right now, especially in states like California where the probate process is expensive and complicated.

Each of these estate-planning tools has pros and cons. The following information is meant to make sure you understand the differences and enable you to make an informed decision about which estate-planning method is right for you.

When a Last Will is used, it does not become an effective document until death. A Last Will requires the property of the decedent to go through the probate process prior to being distributed. Probate is the process by which a Last Will is presented to the court, the court authorizes the representative of the estate to take possession of the decedent’s assets, the creditors of the decedent are notified, and, approximately four months later, the representative pays the creditors and then distributes the assets to the intended beneficiaries.

When a Revocable Living Trust is used, the assets titled in the name of the trust are not part of the decedent’s estate, and do not need to go through the probate process. As soon as the individual who set up the trust dies, the alternate trustee named in the trust is entitled to take control of the assets without any court involvement. Importantly, this process also happens when the person who set up the trust becomes incapacitated.

Colorado has an informal probate process. The probate court is minimally involved with the process, and thus most probates here are both inexpensive and efficient. However, as noted above it does take about four months to complete the process. In a Revocable Living Trust based plan, the immediate ability of the alternate trustee to access the assets in the trust upon the incapacity or death of the settlor of the trust is definitely an advantage if time is a consideration.

If you choose to use a revocable-living trust based estate plan, your personal residence, vacation home, and investment accounts and other types of property are usually transferred into the name of the trust, requiring retitling of these assets, but tax advantaged retirement accounts are usually not. This process of retitling the assets is one of the two disadvantages of using a Revocable Living Trust when compared to a Last Will-based estate plan. The second disadvantage to the Revocable Living Trust is that it is typically more expensive than a Last Will based plan.

I generally recommend a Last Will based estate plan here in Colorado because of our informal probate process. I recommend a Revocable Living Trust based plan to my clients who meet any of the following criteria:

➢ complex asset management needs or diverse types of investment assets since Revocable Living Trusts provide a very strong asset management tool;
➢ property outside the state of Colorado (since such property can be placed in the Trust, no additional probate proceeding will need to be opened in the other states);
➢ the need for privacy (Wills are filed at death and become pseudo-public documents) or the wish that their at-death disposition not be public; and
➢ impending disability (at the disability of the individual, the alternate trustee will be able to take control of the assets in the trust).

Feel free to call or email me if you have further questions regarding the differences between these two types of plans.

Tanya Shimer 11/11/14 Tanya Shimer 11/11/14

Talking to adult children about your estate plan

If you’ve done your estate planning and have adult children (single, married, divorced, with or without children), its important to let them know that you have taken care of this. It would be courteous to let your children know: Where your documents are located, both copies and originals.

Whom you have chosen as your fiduciaries, such as agents for powers of attorney, personal representative, and trustees.

It would also be helpful if you can convey to them your wishes should you become disabled.

You may wish to discuss the nuts and bolts of your plan in more detail with them, this is a personal matter, and you may decide to not disclose this at all.

However, it might be wise to discuss any areas that might cause conflict in the family up front and address this with the parties now to avoid future contention. If there are any anomalies in your estate plan, such as leaving money to a more distant relative or choosing to favor one beneficiary over others, it’s a good idea to talk about this – that way there will be no hurt feelings or surprises when the estate plan is implemented and you are unable to explain your reasons for the choices you have made.

Tanya Shimer 11/11/14 Tanya Shimer 11/11/14

Talking to elderly parents about estate planning

How to talk to your parents about their estate planning. Its an old adage and maybe even a cliche - we don't talk about whats in the Will and its not polite to bring up aging or death with our elderly loved ones. Yet it is important and necessary. You need to know if they have a plan and where the documents are kept in case something happens. Here are some guidelines to help navigate this awkward conversation with your parent or parents.

Your intention. Make it clear that your intention in bringing this topic up is to understand their wishes so you can help make sure that they are carried out. If they don’t have a plan it is to encourage them to contact a professional who can help them implement one – tout suite.
Their privacy. Your focus in this conversation is not to provide them with advice or haggle over the details of their arrangements, but to make sure that they have a plan and that you are able to locate it should something happen.
Concerns that need to be addressed. This conversation is about them. Are they happy with the arrangements that they’ve made; is there potential for conflict amongst their chosen beneficiaries and if so how can this be averted; are they comfortable with the fiduciaries that they’ve chosen or does this need to be updated. If they don't have a plan why not, what are their fears or reasons for procrastinating and how can you and your siblings help.
Include your own circumstances if applicable. If you are in a position where receiving money in trust is important or might be important in the future, convey this or other particular concerns to your parents.
If you have siblings keep them in the loop by letting them know you are concerned and are addressing this with your parents.

Ways to break the ice include talking about:

Planning gone awry. Talk to them about estate planning horror stories that you have heard on the news (a little celebrity gossip can’t help but break the ice, think Georgia O'Keeffe, Steig Larsson, Thomas Kincaid, etc. ) or through your own experience (your neighbor so and so…).
Your own planning. If you’ve done your own estate planning it might be helpful to share with them your experience and what you have decided in regards to fiduciaries, etc., as a way of both breaking the ice and so that they know what your own plan entails and who has been designated to implement it.

If there is no planning in place:

If your parents do not have estate planning in place encourage them to seek counsel and get it done. Many clients that I work with are so pleased to finally get this out of the way and express that this is something they have been thinking about for “a long time” and their relief and boost in confidence about the state of their affairs is palpable. Gently remind them about the added expense, stress and conflict caused to family members if a person dies without estate planning. I do not recommend putting pressure on them about this - ultimately its their estate and their responsibility but at least having this conversation in a gentle way might encourage them to tackle this task.

Tanya Shimer 10/8/14 Tanya Shimer 10/8/14

Seniors Getting Married - Estate Planning Considerations

Seniors getting married and estate planning.

People are getting married later in life. Marriages, with one or both spouses being seniors, retired, and having grown children, have become quite common. And while its fantastic to know that love can blossom at any age and usually children and grandchildren are happy that their parents have companions to spend their later years with, these marriages require unique estate planning considerations.

Estate planning for later life marriages is complicated for a number of reasons. These "senior" marriages can directly impact the inheritance of the children and other family members on both sides. Remarriages also can affect a spouse’s right to alimony payments from a prior spouse, retirement benefits, social security benefits, health insurance, and the spousal medical care obligations. Its important for both spouses to clearly address who their assets are intended to benefit, whether it’s the new spouse, the children and families or a trust – both while the spouses are alive, upon the death of one of them, and when both die.

Other considerations that should be addressed as a part of the estate planning process should include whether long-term care insurance is needed; should income and assets be blended or kept separate; how the primary residence is treated both during life, and upon the death of one spouse, and then both spouses; is a post or prenuptial agreement necessary or advisable as part of the estate planning process; how do the parties wish to pay for future medical expenses (for example, is it advisable to deplete the assets of one spouse first).

People in later year marriages also should consider the conflicts that could arise between the spouse and children should agents named for medical and general powers of attorney need to act. The best way to avoid this is to think these conflicts through in the planning phase and coordinate the choice of fiduciaries in the documents – with the fiduciaries having a clear understanding of the spouse’s agreements to the later life marriage concerns, as delineated above.

Tanya Shimer 5/9/13 Tanya Shimer 5/9/13

Five Criteria to help choose a Medical Power of Attorney

family-mulitigenerational — Having your legal foundation in place is about your loved ones as much as it is about you!

In completing your POAs its important to choose an appropriate agent. Here are five criteria to think about in relation to choosing an agent for your medical power of attorney.

3. Practical reality: Its critical that the person you choose is willing to accept responsibility and agree to act as your agent - "ready and able to serve".

5. Availability: Make sure this person is likely to be accessible and capable of serving as your agent well into the future.

Tanya Shimer 5/8/12 Tanya Shimer 5/8/12

What does a will actually do?

Your will is a legal document in which you give certain instructions to be carried out after your death. For example, you may direct the distribution of your assets (your money and property), and give your choice of guardians for your children. It becomes irrevocable when you die. In your will, you can name:Your beneficiaries. You may name beneficiaries (family members, friends, spouse, domestic partner or charitable organizations, for example) to receive your assets according to the instructions in your will. You may list specific gifts, such as jewelry or a certain sum of money, to certain beneficiaries, and you should direct what should be done with all remaining assets (any assets that your will does not dispose of by specific gift). A guardian and trustee for your minor children. You may nominate a person to be responsible for your child’s personal care if you and your spouse die before the child turns 18. You may also name a trustee—who may or may not be the same person—to be responsible for managing any assets given to the child, until he or she is 18 years old. A personal representative. You may nominate a person or institution to collect and manage your assets, pay any debts, expenses and taxes that might be due, and then distribute your assets to your beneficiaries according to the instructions in your will. Your personal representative serves a very important role and has significant responsibilities. It can be a time-consuming job. You should choose your personal representative carefully. Asset protection/tax planning. A properly designed estate plan will, at a minimum: (i) protect your assets, your person, and your business from a possible future disability; (ii) protect your assets from liability during and after your life; (iii) distribute your assets tax efficiently at your death; and (iv) ensure that assets left to young beneficiaries are left inside of a structure such as a trust that will provide management and protection of these assets for your beneficiaries.

Tanya Shimer 5/8/12 Tanya Shimer 5/8/12

Why do I need a will?

Wills are important. Regardless of how much or how little money you have, a will ensures that whatever personal property and assets you do have will go to family or beneficiaries you designate. Without a will, the court makes these decisions.If you have children, a will is essential, to ensure that your wishes regarding your children will be clear. In your will, you will be able to designate a guardian for your children who will be responsible to care for your children should something happen to you. In addition to naming your children’s guardian, by completing a will, you will also be able to name a trustee who will be responsible for taking care of your financial resources for your children until they are adults. There are other benefits to having a will, and depending on the size of your estate careful planning can reap significant tax benefits. You will also avoid subjecting your family and loved ones to confusion and anxiety at what is already a difficult time by making your wishes clear.