Colorado Probate Blog - Wade Ash Woods Hill & Farley, P.C.

Beneficiary Designations May be Dangerous to Your Estate Plan

Traditionally, the central document in an estate plan was a will or revocable trust. For many people, that continues to be true, but it is now possible to pass almost any kind of property outside the terms of your will. For example, this can be done by adding the beneficiary as a joint owner on a bank account, by naming the beneficiary as a “pay on death” (POD) or “transfer on death” (TOD) payee on a stock or securities account, or by signing a “beneficiary deed” that names a beneficiary to become the owner of real estate when you die. Colorado recently added automobiles to the list of assets that can pass by a TOD beneficiary designation. These arrangements, which I refer to generically as “beneficiary designations” can be useful, but they can also seriously disrupt a careful estate plan if they are done without care and appropriate advice.

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Hail No!

Buyer Beware: Hail storm scammers are on the prowl...

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Planning for the Apocalypse

Your options for preparing to survive a zombie apocalypse or other collapse of civilization as we know it now include some rather luxurious possibilities. According to a January 30, 2017 article in The New Yorker entitled “Doomsday Prep for the Super-Rich”, highly affluent citizens of the United States have been quietly planning their survival strategies by hoarding rations, gold coins, and weapons and building state-of-the-art underground bunkers stocked with years of supplies.

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Contention Over Lunar Bibles

The state of Texas and Oklahoma resident Carol Mersch, have been in a six-year, estate-related battle in court over 10 teeny microfilm Bibles that traveled to the moon and back in 1971 with NASA’s Apollo 14 Mission. These tiny Bibles contain all 1,245 pages of the King James Bible and are roughly the size of a postage stamp that can only be read through a microscope. Carol Mersch, a Tulsa business woman and author, and the state of Texas are not seeing eye-to-eye on who these precious keepsakes belong to. In 2009, Mersch became friends with a man named John Stout, a NASA chaplain. She claims Stout gave her the Bibles while she was writing a book about trying to land a Bible on the moon. Mersch has a certificate of authenticity signed by Stout, but attorneys for the state of Texas and the Texas Department of Aging and Disability Services contend that due to the declining physical and mental health of Stout and his wife in their later years, they were considered wards of the state and their son, Jonathan Stout, should inherit the Bibles. Mersch is accused of exerting undue influence over Stout and his wife. She has spent approximately $500,000 defending the litigation regarding ownership of the moon Bibles. For now, until the rightful owner is established, these “First Lunar Bibles” remain stored in a Tulsa County courthouse pending a May 3 hearing.

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Don't Get Nailed by Spring Scams

Don't be a professional home improvement scammer's next victim...

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Go Green! The Alternative to Traditional Burials

If you are searching for an alternative to the traditional burial that will reduce your “carbon footprint” and lessen the impact you have on the earth, you may want to consider a “green” or “natural” burial. Contrary to what some believe, green burials are becoming more and more popular. A green burial is designed to be environmentally friendly and impact the earth as little as possible. This type of burial reduces chemical and carbon emissions, preserves habitat and conserves natural resources. It also helps to protect the health of those in the industry. The process of a natural burial features the removal of the use of chemical preservatives or disinfectants like embalming fluid, which contains formaldehyde and is highly toxic. Caskets, coffins and urns are made out of biodegradable materials like cotton, wicker, linen, silk or even bamboo, all of which break down into the soil without adding toxins to the earth as they decompose.

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Jury Duty is No Laughing Matter

As part of our civic obligations, we may all, at some point, be called to serve on a jury. Whether we actually serve for a trial or get excused, jury duty is not to be taken lightly. Recently, Michael Chavis walked out of the courthouse during a break just after opening remarks by prosecutors in the case of Richard Wyatt, a man on trial for selling firearms illegally and evading income tax in connection with a gun shop he owned in Wheat Ridge. According to court documents, Chavis left his juror badge on the table after the break, grabbed his belongings and walked out of the courthouse. Chavis assumed he was done and said that he had “mental reservations” or a “panic attack.” He claimed he “wasn’t focused” when asked about his disappearance by Chief U.S. District Court Judge Marcia Krieger.

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Some Thoughts on Gifting

This commentary is provided by an author who is both a senior lawyer on the one hand and a father and grandfather on the other.

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I'm the Taxman, Yeah, I'm the Taxman

Beth McCann, the Denver District Attorney, recently sent out this Consumer Advisory called: I'm the Taxman, Yeah, I'm the Taxman 

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Elusive Assets After Death

Aubrey McClendon, a co-founder of Chesapeak Energy Corp. and a pioneer in the shale industry, died on March 2, 2016. Mr. McClendon had significant assets yet his estate appears to be insolvent. Creditor claims filed to date exceed $1.1 billion. Mr. McClendon’s business holdings were complex and the estate has had a hard time selling assets.

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Leggo My Eggo -or- Who Gets My Gametes When I Die?

Among the many wonders (and occasional terrors) of modern medicine, few strike more of an emotional chord than advances in reproductive technology. Preserving our genetic material for use after death has passed from science fiction to scientific fact; but the law remains unestablished in Colorado as to what happens if there is a dispute about ownership of frozen sperm, ova, or embryos after the death of one or both of the donors.

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Don’t Defer Planning Your Estate Because The Estate Tax Might Be Repealed

In 2001, when the estate tax exemption was $675,000 and George W. Bush was President, Congress “repealed” the estate tax. But the repeal was phased in over ten years and was then scheduled to last for only one year. Instead of actual repeal, what we got, under President Obama, was a reinstated estate tax with a much higher exemption of $5 million, indexed for inflation. The Republican party now controls both houses of Congress as well as the White House, and we are again hearing calls for repeal of the estate tax.

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Timeline for Preparing and Updating Wills and Trusts

The law allows a person to sign binding contracts including Wills at age 18, the age when young adults should begin to plan to avoid financial and medical complications in the event of debilitating illness, injury or death.  Wills, Medical and Financial Powers of Attorney, and Advanced Directives are the basic documents that every person should have in place.

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Love is Blind---So You Better Wear Glasses

Beth McCann, the Denver District Attorney, recently sent out this Consumer Advisory called: Love is Blind---So You Better Wear Glasses

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Value of Michael Jackson’s Image

When Michael Jackson died, his estate valued his image and “right of publicity” at zero on his U.S. Estate Tax Return, as well as the value of his music interests due to the large debts encumbering those interests. The IRS disagreed, and argued that the success of the documentary and Cirque du Soleil show released after his death were foreseeable and should affect the value of his estate. The disagreement resulted in a $526 million estate tax deficiency and penalties of $205 million imposed by the IRS. The trial began in Tax Court on February 6, 2017.

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Mary Tyler Moore: Another Uncertain Celebrity Estate

Beloved actress, producer and activist, Mary Tyler Moore, was laid to rest in a private ceremony in Fairfield, Connecticut on January 29, 2017 at 80 years old, after battling diabetes and suffering from complications with pneumonia. While the status of her estate is unclear at this point, it is very likely that Moore left behind a Will. With a considerable legacy, including an estate that is valued at $60 million, a question arises of who will inherit Moore’s fortune. Her son and only heir, passed away tragically in an accident and her brother and sister are also deceased. This essentially leaves Robert Levine, her longtime husband, as her primary heir. Under Connecticut Probate Rules, Levine is entitled to at least one third of Moore’s probate estate, which in this case, under Connecticut’s spousal share, could be in the spectrum of $20 million. Although Moore left an undetermined amount of money to charity, the question remains: Will her husband inherit a large chunk of the “high-net-worth” legacy that she leaves behind or will charities such as PETA and the Juvenile Diabetes Research Foundation, to which she has contributed in the past, receive the majority share?

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Grandparent Scam

Beth McCann, the Denver District Attorney, recently sent out this Consumer Advisory newsletter with information about the "Grandparent Scam".  Click here to read the newsletter

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Colorado's New Law: The End-of-Life Options Act

This election season was full of interesting contests and a few surprises. If you were following the issues in Colorado, you saw an array of familiar ballot initiatives dealing with legalized marijuana, funding for the Scientific and Cultural Facilities District, and of course, heated contests between diametrically opposed candidates. But you also saw the passage of a ballot initiative that will only directly affect a limited portion of the population, but is intended to provide that small group with an alternative to suffering through a painful terminal illness.

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Minority Interest Discounts in Family Controlled Entities

On August 2, 2016, the Treasury Department proposed a series of regulations to Section 2704 of the Internal Revenue Code. If these proposed regulations are made final, this could greatly limit the ability of family controlled partnerships, limited liability companies, and corporations to transfer interests in a manner that takes advantage of minority discounts.

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Colorado's New Trust Decanting Statute

Effective August 10, 2016, the Colorado legislature enacted C.R.S. § 15-16-901 et seq., the Colorado Uniform Trust Decanting Act (the “Act”). “Decanting” generally refers to the distribution of trust property from one trust to another trust pursuant to a trustee’s discretionary power to make distributions for beneficiaries. New York was the first state to enact a trust decanting statute in 1992; now, nearly half of the states, including Colorado, have specific statutes addressing and authorizing trust decanting in various forms.

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