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

Make Sure Your Surviving Spouse is Provided for in Your Estate Plan

     The Colorado Probate Code affords a surviving spouse, who may be unintentionally omitted from his or her deceased spouse’s Will, an intestate share. The rationale for this provision of the Code is the presumption that the Decedent would have wanted the surviving spouse to receive his or her estate rather than beneficiaries named in a prior Will that predates the marriage.

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Third Party Rights: Small Estates and Non-Probate Assets

Many of our probate statutes are designed to carry out a decedent’s intention as expressed in his or her will. Certain rules of construction (survivorship, substitution of assets) apply to wills and revocable trusts as will substitutes. The statutes also provide for recognition and ordering of third party (non-beneficiary) interests in probate and revocable trust assets. These would include taxes, creditor claims, and family protection entitlement during the period of administration.

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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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Is It Time to Update Your Estate Plan?

We recommend that our clients review their estate plan every few years to make sure that it remains current. Here is a list of “life events” and other things that should trigger a review of your estate plan.

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655 Hits

Draft Instructions to 1041 Include Basis Reporting

As noted in a post last summer, the "Highway Bill" signed into law on July 31, 2015 requires executors of estates filing U.S. Estate Tax Returns (Form 706) on or after that date to file a statement with the IRS within 30 days, and to report the fair market value of assets on the return to the beneficiaries. These values must be used by the estate on its Form 1041, and the beneficiaries for basis-reporting purposes, but only if the estate was taxable. In Notice 2015-57, 2015-36 IRB, the IRS delayed the due date for both the information return and the statement until February 29, 2016. The draft instructions to the 2015 Form 1041 that were just released also require consistent basis reporting. The instructions to Schedule D include the statement: "The beneficiary must use a basis consistent with the estate tax value of the property to determine his or her gain or loss when the property is sold or deemed sold."

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Federal Tax Update & No-Contest Clauses

Our November, 2013 Newsletter features a Federal Tax Update by Laurie Hunter and an article by Herb Tucker on No-Contest Clauses. For more information, go to http://www.wadeash.com/publications/newsletters.html and select the link for November, 2013.

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1748 Hits