Learn more about wills, trusts, powers of attorney, living wills, etc. The list goes on and on. What is right for you? What do you need? How much is a reasonable amount to pay? Find out here!

Althaus Law Family Estate Planning

Do Trusts Have Disadvantages? YES!

With the recent changes in estate planning and probate laws in Colorado, Medicaid planning is not as easy as it once was and will-based plans are becoming more and more popular over trust-based plans. I have taken the time here to list some of the benefits of a will-based plan, and some of the potential downfalls to a trust-based plan (especially when Medicaid is concerned):

  1. Medicaid laws change very frequently making it impossible to guarantee that a plan written today will work tomorrow. This is true even if you pay much more money for a trust-based plan over a will-based plan.
  2. In order to best protect against Medicaid claw backs you need to make an irrevocable trust, preferably where you are not the trustee. This means that you do not own or control your property anymore. That relationship makes Medicaid supposedly not being able to come after it. If, however, you break the formalities of the trust and show “incidents of ownership” Medicaid will still claw through these trusts.
  3. If you own property as Joint Tenants With Rights of Survivorship then as soon as one person passes, the Joint Property passes immediately to the surviving spouse. It avoids probate and arguably there is nothing for Medicaid to make a claim against. This would not apply if you were the second spouse to pass, however. This type of planning can be completed without a trust at all.
  4. The Medicaid laws allow for exempt or non-countable assets. This means that the government doesn’t count your primary residence, your car, some of your personal household goods, retirement accounts, and more in their claw back review.
  5. Probate is actually recommended by many attorneys now in Colorado due to the numerous law changes. You get the benefit of a creditor cutoff period where creditors have only four months to make claims or they are forever barred. A lot of debt gets wiped out this way and the cutoff period is not available for trusts. Further, a judge signs off on the work an executor/personal representative completes, releasing them of liability in the future. A judge does not sign off on anything for a trust in most cases.

I have done both trust administrations and probate cases. Both have taken similar amounts of time, and I have seen trust administrations actually cost more in the end. There are instances when a trust can be very beneficial. Tax avoidance and probate avoidance are two of those. I only recommend avoiding probate if you have property in other states, however.

End of Life Planning

End-of-Life Planning in Colorado

Frequently people to come to me and ask about end-of-life planning. They usually want to know about a will, a trust or how they make their decision regarding whether or not they would like to be on life support if the worst happens. In reality, end-of-life planning is a small part of what is called Estate Planning. While estate planning allows for an individual to protect their assets, themselves and their family both while they are alive and after they pass, end-of-life planning focuses only on what happens after passing.

What Exactly Does End-Of-Life Planning Involve?

End of Life planning is the second half of a full estate plan. It involves making important decisions regarding your passing, such as:

  • Where do you want your things to go?
  • Who do you want to receive specific gifts or money from you?
  • Do you want to benefit charity?
  • What happens if family members predecease you?
  • What happens if you are in an accident and leave behind minor children?
  • Do you want to stay on life support in an end-of-life situation?
  • What terms do you want in your living will?
  • Do you prefer to have a funeral and have you made arrangements for it?
  • Who will pay for your end-of-life expenses?

There are many more questions to consider when planning for the inevitable. An experienced attorney can guide you through the entire process and make sure your questions are answered. At Althaus Law, we can help you make sure that the decisions you make are legally binding, and everything is simple and efficient for your loved ones.

Is There More?

Yes! With a full estate plan you are able to not only plan for passing away, but you are able to protect yourself and your family while you are still alive. The easiest way to accomplish this is by putting a financial and medical power of attorney in place. This enables you to have an individual ready and able to act for you if you become incapacitated. Afterall, the odds are you will only die once. We can all become incapacitated multiple times through out lives, however.

If you have any questions regarding end-of-life planning or estate planning in general, don’t hesitate to reach out!

Frequently Asked Questions for Estate Planning

Our estate planning FAQ was recently published on AVVO. You can check it out here. If you ever have questions regarding wills, trusts, powers of attorney or any other estate planning documents, you can always give us a call at 720-547-2319 or reach out to us online.

Initial consultations are always free of charge.

Many people ask me why they would need a living will. First, the answer starts with an understanding of what that document actually is. It is not a will at all, it is actually a health care directive that allows you to choose how you would like to be treated in an end-of-life situation. Basically, they are known in the estate planning world as the “pull-the-plug” document.

Second, these documents are important because they take the decision out of the hands of everyone else in the world and allow you to decide how you want to be treated in the end.

But Why Do I Care What Happens to Me?

I explain to many of my clients that these documents aren’t necessarily just for you. They are for your family. Deciding whether to maintain life support for a loved one is a very stressful decision that could haunt someone for the rest of their lives and cause families to split up. If you simply decide beforehand with an advance health care directive, you take that stress away from your family and prevent future fights from ever occurring .

Further, if you have very strong beliefs on how you would like to be treated during the final moments of your life, this document allows you to do that.

Either way you look at it, a living will is a very important estate planning document to have in your arsenal.

Want More Info on Living Wills in the Thornton Area?

Contact Althaus Law, a Colorado estate planning law firm, for advice regarding your living wills and health care directives.

Estate Planning

If you are one of those individuals who hears “estate planning” and immediately thinks about rich people, you are not alone. Unfortunately, the myth that only the wealthy need a plan has permeated our society for decades. The truth of the matter is that everyone can benefit from an estate plan.

Why Do I Need An Estate Plan You Say?

Allow me to enlighten you. I have a friend whose mother had an unexpected stroke at a younger age. She was the primary caretaker for the family, and while she was in the hospital, none of the bills could be paid because she was the only one authorized to access the financials. So not only was the family dealing with the emotions of having Mom in the hospital, but the house was nearing foreclosure, the car was nearing repossession, and utilities were being shut off, all because no estate plan was in place.

In the end, large court costs and needless expenses had to be endured in order to set things straight. The Mom is still recovering from the stroke, and luckily, she still has a house to call home. Much of the side stress involved with unexpected medical emergencies or accidents can be completely avoided with a proper estate plan. A simple power of attorney would have allowed a designated person to continue to pay bills as Mom would have.

Simply adding someone to your bank account is a possible solution, but a very bad one. A skilled attorney can guide you through all of your options.

Unfortunately, most people don’t realize they need an estate until it’s too late. Once it’s too late, you can’t go back. Plan for the future now, so you can enjoy the present today.

Looking for an estate planning attorney? Reach out to a skilled lawyer at Althaus Law, in Thornton, regarding your plans for the future in Colorado.

Estate Planning for Young Couples

Young Couples and Estate Planning in Colorado

All too often younger couples and families put off estate planning because they falsely believe they do not need it. Maybe you believe it is an expense that can wait or that is just altogether unnecessary. This could not be farther from truth. There are many essential benefits that individuals are unaware of when it comes to estate planning.

At Althaus Law, we help young couples in Colorado prepare for the future so they can rest easy knowing everything is setup correctly and in order.

What Would Happen To Your Children If Something Happened To You? 

A parent’s desire to protect their children and make sure they have all the benefits the parent can offer is at the top of every mom and dad’s list. Unfortunately, this list usually doesn’t include estate planning even though it is the number one way to easily protect your entire family should anything happen to you.

It’s hard to think about, but couples usually get involved in accidents together. What would happen to your kids if both you and your spouse were incapacitated, or worse? Setting up guardianships for your children can answer this question immediately and make you feel secure knowing your kids are protected life.

Giving Your Spouse The Ability To Make Financial And Medical Decisions

Many people incorrectly assume that their spouse can simply step in and handle everything should the other spouse become incapacitated. This is not true. All jointly owned property will require the signature of both spouses should any major decisions need to be made. An incapacitated spouse can’t very well sign anything. A power of attorney in your spouse’s name resolves this issue in a snap.

As far as medical decisions go, doctors can defer to closely related people in your network, including your spouse, parents and siblings, but they don’t have to. Many states have statutes with a list of individuals that a doctor should consult … Colorado is not one of those states. Having a medical power of attorney ensures that your spouse will have the total authority to make critical decisions, and should you both be incapacitated, it will designate another trusted person who can act on your behalf.

Being Young Doesn’t Make You Invincible

Don’t wait any longer to start protecting your family. Just because you are a young couple doesn’t mean you are invincible. Consult with Jeff at Althaus Law today to start planning for and protecting your future.

What is portability? Simply put, it means that now spouses can pass their estate and gift tax exemption to each other when the first one passes. In 2014, the federal estate tax exemption is $5,340,000. That’s a lot tax-free exemption to pass to your spouse.

So what exactly does portability mean when referring to estate planning in Colorado? To answer that question we begin with the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (TRUIRJCA) and the American Tax Relief Act of 2013 (ATRA). Mouth fulls, I know, but hear me out. The former created portability and the ladder makes it pretty much permanent. This is good news folks!

Need An Example?

Let’s use this in an example to make it easier to understand. Let’s say husband H and wife W have $7,000,000 to their names. Unfortunately, H dies and does not create any trusts that use his federal estate exemption. Fortunately, due to the unlimited marital deduction, all of the assets pass tax free to W. Now let’s look at what happens when W dies. She can use her 5,340,000 federal estate exemption AND, with the newer laws, can still utilize H’s unused federal estate tax exemption of $5,340,000. This means that since the 10,680,000 exemption that W now has is greater than her $7,000,000 estate, she pays ZERO dollars in estate tax. Woohoo,  nice work!

Without portability, W would have lost H’s unused exemption and ended up paying estate taxes on $1,660,000 (7,000,000 – 5,340,000). You must make sure to make an election shortly after the first spouse passes or you will lose out on this huge tax-savings benefit.

Give Us A Call

Questions? Wondering if portability or credit shelter trusts are better for you? Contact Althaus Law for more info.