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!

The Guardianship Court Hearing In Chapter 4 of S-Town

You may remember that soon after John B. McLemore died in the S-Town podcast, his estranged cousins came out of no where and were able to clean out his house, even though his mother was still living there and alive! They were able to do this through a legal proceeding called a Guardianship and Conservatorship hearing. This is a court process that allows you to appoint an individual (the guardian or conservator) to manage the healthcare and financial decisions of an incapacitated person.

In S-Town, the judge found that mom was incapacitated, therefore handing over all her civil rights to the cousins … legally. This is a very dangerous proceeding, for many very obvious reasons. The most important of which being that mom has no more right to make her own decisions regarding herself or her money.

Was That Even Legal??

Unfortunately, yes. However, Tyler and possibly the producers of the show, could have taken steps to make sure that John’s estate was protected and that mom had a different guardian. There is no guarantee that any steps anyone would have taken would have worked. They are in “S-Town” after all. We don’t know exactly how things went behind the court room doors, but it seemed like the judge wasn’t too fond of Tyler and his tattoos, so putting Tyler in charge probably wouldn’t have been an option.

What could have been an option is a third-party professional. This professional would have been able to:

  • Decide what actually happened and who was in the right
  • Decide who John’s things should go to (assuming they were also appointed as Personal Representative)
  • Figure out what should happen regarding Mom’s care
  • Figure out what should happen with Mom’s assets
  • Refuse pursuing  charges against Tyler

All of this could have easily been prevented if John and his mother had estate plans in place. You can read other posts in our S-Town series for more information on how estate plans could have helped in S-Town.

Are There Protections Against This In Colorado?

There are. As mentioned above, you can plan ahead with a full estate plan. You can also take action afterward, but that is much harder. The truth of the matter is that taking action after a guardian has already been appointed requires that a third party speak up in order for those protections to be enforced. Tyler, the producers, someone, would have to bring a legal action against the cousins for a breach of fiduciary duties. Or, as discussed above, these people could have tried to challenge the action in the first place and suggest a better person to fill the spot of guardian/conservator.

As I have mentioned in other posts, if you don’t have an estate plan in place, the state will make one for you. This means if you do not have a medical or financial power of attorney, a judge you do not know will appoint a professional  you have never met to manage your affairs for the rest of your life if you become incapacitated (called a guardian and conservator). There is no guarantee this person will be your spouse, your next of kin, or even a family member. As we see from S-Town, without a proper plan, you don’t get to say who should not be in this position.

The bottom line is that being prepared is the best defense. Almost everyone I talk to thinks things like this only happen in the news, on T.V., or to other people. The sad truth is that this situation is the common one that most people end up living through. Because people don’t want to think about their own incapacity such as getting Alzheimer’s disease, being in a car accident and suffering brain damage, winding up in a coma or otherwise losing the ability to make decisions, they just avoid it in hopes that it will clear itself up. Or people utter the all-too-common phrase “who cares, I’ll be dead.”

Your family cares. The people you leave behind care. Get prepared for them. Your clock is ticking.

Would a will have helped in S-Town? YES! A will definitely would have made things a lot better for the people John B. McLemore left behind.

Over the next few weeks, I’m going to be explaining the different legal aspects of what happened toward the end of S-Town, and how most of it could have been prevented. If you don’t want to know what happens, then don’t read these posts! This week, we are starting off with how a will could have helped John’s probate process in S-Town be less of an S-Show.

A Look At What Happened With No Will In The S-Town Podcast

With no will in place, the cousins were able to come in a take whatever they wanted. Technically, if you do not have an estate plan, the law will write one for you. And, as you heard, any discrepancies between parties is going to be an unpleasant experience.

The gist of what happens when the state makes your estate plan (including your will) for you is that your relatives or spouse inherit. The normal order of who inherits first is:

  1. Spouse
  2. Children
  3. Grandchildren (then great-grandchildren, etc.)

If none of the above are alive, then it passes to:

  1. Parents or grandparents
  2. Brothers and sisters
  3. Nieces and nephews
  4. Cousins

This order may seem practical, but as we saw in John’s scenario, it was terrible and not what he wanted at all. This law-defined pattern can be changed as much as you want with a simple will. The above order is very problematic in many cases, not only John’s. For example, if you are on a second marriage or have children from a prior relationship, your children can quickly become disinherited. If you have relatives you would rather leave out of your will (like John’s cousins) then you have to specifically mention that or else they will inherit. If you want to leave something to charity or have someone take care of your immaculate maze garden you have built, that needs to be spelled out. The list goes on and on, and I will not bore you with the problems here. For now, know they exist and are numerous.

One other very important part of having a will is that you get to name who is in charge of making sure your wishes are carried out. This person is called your Personal Representative. Since John didn’t have a will, the judge just named whoever was related that showed up in court that day. It turns out that was Rita, who John never would have put in charge and didn’t want to receive anything according to the show. John could have easily named Tyler, or anyone else for that matter, if he simply would have written things down.

Finally, the very family John wanted to investigate for murder in the beginning of the podcast is the family that ended up with all of John’s land. There is no way in any alternate universe that John would have wanted that to happen. If you research pictures of John’s land, the maze in particular, it seems as though it will not make it. The end of S-Town seems to allude to the fact that the land will probably hold parking lots or a Wal-Mart someday. Obviously not the ideal use John would have had in mind.

What Could Have Happened With A Will?

With a will, John McLemore could have directed anything he wanted to whoever he wanted. This would have cut the cousins out of things completely. They would have showed up in town and then been quickly turned down from receiving anything by a judge.

Further, John would have been able to appoint who he wanted as his Personal Representative. This is the person who is in charge of the probate process. Basically, that means the Personal Representative makes the will work. They find all the assets, value them, deal with any creditors and distribute everything per the terms of the will. Rita would have not been able to be appointed as Personal Representative and would not have been able to pocket the money from the sale of the land. More importantly, she wouldn’t have been able to sell it in the first place.

Don’t fall victim to the same trap. Don’t let the “evil” relatives in your life receive your hard-earned assets. Most importantly, don’t leave the “Tylers” in your life out in the cold by themselves. Keep in mind, if John had a will that named Tyler as a beneficiary, none of the things Tyler did could have been crimes. They would have been things he was required to do.

It is truly too bad that John never got around to putting a will in place. It is the excuse I hear far too often in my line of work as an estate planning lawyer. People put it off and put it off until it’s too late. If John would have just made himself draft a plan, perhaps we would be able to tour his maze, to see his clocks, and perhaps S-Town would be on its way to being more of a good town that upheld his legacy.

What If I Told You Everything You Have Heard About Trusts Is A Lie?

Many people think that in order to have a solid estate plan where they can avoid probate and protect themselves from creditors, they have to have a trust. They have been told by their parents, friends, family, and sometimes by attorneys that having a trust is the only way to go to ensure their family and their things are protected.

With somewhat recent changes in the laws here in Colorado and across the United States, trusts do not play as important of a role in most people’s estate plans anymore. If you want to know more about what a will is or what a trust is, you can read more by clicking that link. I’m going to focus more on when you need a trust here.

So When Do I Actually Need A Trust?

There are three main times I recommend a trust for people:

  1. If you have what I like to call a “Brady Bunch” family, then a trust can help to determine who is supposed to get what a little more effectively than a will can. This occurs when each spouse is bringing children to their current relationship from prior marriages. If you wish to split things to certain children upon the death of the first spouse, or guarantee certain children will get more/less than others at the second death, then a trust is beneficial.
  2. If you have tons of money. By tons of money, I mean over the federal estate tax exemption amount of $5,490,000.00 for 2017. If you are married, you can double that number. If you have over that amount you will pay estate taxes in Colorado. Trusts can help to plan for this occurrence and lower your estate-tax bill.
  3. You have complex family situations. More specifically, you wish to protect your children from themselves. If you have a child with a drug addiction, alcohol problem, gambling addiction or any other type of situation where you would like to ensure money is protected and can’t be used for those addictions, a trust can help you to accomplish that goal.

Just because you fall under one of these three categories, does not necessarily mean you have to go out and get a trust right away. A will-based plan still may be able to meet all of your needs and protect you.

Many people also come to me and ask, “What about Medicaid planning? Doesn’t a trust help protect your assets from Medicaid?” Well, yes and no. The long and short is that Medicaid laws change so frequently that it is nearly impossible to draft a plan and guarantee that it will work against all Medicaid laws forever. Feel free to read more about the pros and cons of Medicaid trusts here.

The important thing is to have a skilled estate planning lawyer review your situation to help you decide what may work best for your specific situation.

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.

How To Explain Living Trusts To A Six-Year-Old

Let’s continue our little conversation with the explanation of what a trust is. This one is more complicated to fully understand, but the basics are almost identical to a will. If you missed our chat in Part 1 of this series, feel free to check it Wills Explained To A Six-Year-Old here.

So why do you need a trust over a will? Great question! A lot of people don’t. Let’s learn a little more:

Six-Year-Old: “Mommy, Daddy, what’s a trust?” (I’ve heard kids ask crazier questions, so roll with it)
Parent: “Well honey, a trust is a big stack of papers that lets Mommy and Daddy decide where all their stuff goes when they pass away.”

Wait a minute. Hold the phone. That’s exactly what a will does! What are you trying to pull here? I know, I know. It’s confusing. But the conversation isn’t over yet.

Six-Year-Old: “Ummmm … You just said that’s what a will does. I don’t get it.”
Parent: “You’re paying attention. Good job! A trust is a much bigger stack of papers than a will. It also starts protecting you and all these things around you immediately. Our will doesn’t start working until we are gone.”

So that’s the main difference. There are a lot more pages to a trust, and those pages have terms in them that allow the trust to take effect immediately. Whereas a will is more of a “back-burner document” in that we don’t ever look at it until you pass away. We will get into the intricacies of trusts in later posts. For instance, trusts also let you avoid probate. We haven’t even explained probate to our six-year-old yet, so hold on to that nugget. For now, just know this:

Trusts

1. Let’s you say where you want your stuff to go when you die,
2. Start protecting your stuff and your family immediately, not later like a will, and
3. Avoid probate (unlike a will)

There you have it! If you have more questions or need some more things broken down to where a six-year-old could understand them, don’t hesitate to reach out anytime.

Explaining Estate Planning

How To Explain a Will To a Six-Year-Old


“If you can’t explain it to a six-year-old, you don’t understand it yourself.” – Albert Einstein

I take the quote from good ol’ Al above seriously. Especially when it comes to estate planning. I can’t tell you how many times people tell me they have heard about estate planning and they get the basics, when really, they have no clue what most planning documents are for and why people need them. It’s not their fault either. They probably got an explanation from someone who didn’t fully understand it either.

The point of this blog series is understanding. To grasp the core concepts that, in reality, are so simple. This will allow you to move on to the more advanced topics later. You’ve got to walk before you can run and all that. You will have to bear with me since these conversations could go down the route of being a tad morbid. We will avoid the explanations of death of the afterlife here for everyone’s sake. This is meant for you to get a better understanding. I also don’t plan on writing this post forever.

The Last Will and Testament


First up is the will. This is the bread and butter estate planning document and no plan is complete without one. So how do you explain a will to a six-year old? Here goes:

“A will is a stack of papers where Mommy and Daddy get to decide who gets all of their stuff when they pass away.”

That’s it. That’s all you have to say. Let’s pretend this six-year-old is an actual six-year-old and has some brain-busting follow up questions planned for his or her interrogation of you.

Child: “But why?”

Parent: “Well, you like our house and your things, don’t you? We decide now because we want to make sure you are safe and still have toys to play with and a roof over your head when you are older.”

We won’t get into the nitty gritty here of how your things can go to unintended people or to the state, but just know they can for now.

One other bonus point for all of you parents out there with minor children is the guardianship. So maybe your child throws you this curveball (your child is pretty smart):

Child: “But is that really all a will does?”

Parent: “I’m glad you asked. Mommy and Daddy also get to name the people that will take care of you and raise you to be big and strong if we aren’t around to do that anymore.”

That’s the plain and simple point of naming a Guardian for your kids. If you aren’t there anymore, or you are incapacitated, then who raises your kids? If you don’t name someone that could mean your children go to foster care or end up with a relative you would never want to raise them. We all have that relative. If you don’t, you may be that relative. Sorry. Maybe not though.

That’s it for the will! Next time we will go through explaining a trust to a six-year-old. Get excited.

Let’s play the odds here for a second and pretend it’s inevitable that you are going die. Someday, not that long from now when you think about it, you’re going to keel over, become kaput, push up daisies, become worm fertilizer, and all those other wonderful euphemisms. Trust me, in my profession, I hear them all too frequently.

Let’s look at another amazing statistic … almost no one on the planet wants to talk about it or in any way be prepared until it’s too late. All of us, just walking around like we are some invincible super hero set to live forever, or at least pass away centuries from now with absolutely zero problems until that day comes. And when it comes? Well, obviously, we go from perfectly fine, normal functioning human beings with all our cognitive ability still in place and then the next day we are just gone, passed in our sleep most likely.

Want to know another statistic? That little story happens to virtually no one.

Here’s the scoop folks, while you only die once, most people fail miserably at being prepared for it. Every single person on this planet has access to everything they need to plan for their death. They don’t even have to talk to a stuck up, no good, scum-sucking lawyer to do it. They could talk to a do-gooder, people-loving, puppy cuddling excellent attorney, but they don’t have to do that either. Simply having a conversation with friends and family while putting your wishes down on paper is better than nothing! But we don’t do that either.

Here are some mind-blowing statistics for your brain hole:

  • 62% of people don’t have a medical power of attorney in place. This means there is absolutely no one that can speak to a doctor regarding whether or not you want your leg chopped off if you are in a coma. You’ve got another one anyway.
  • 55% of people don’t have any type of estate planning in place. This includes even just a simple will. You’re fine with the state deciding who gets your things, right? I mean, you gave enough to your family and kids while you were alive. Taxes? Nope, definitely didn’t pay enough of those. State, pretty please take more of my money!!
  • Think that last number was ok? 92% of adults under the age of 35 do not have a will. This includes people with children! You realize the only sure-fire way to prevent foster care for your kids is to appoint a guardian for them in your estate plan? No, you didn’t get that memo. Consider it delivered.
  • 32% of Americans say they would rather have a root canal, pay taxes or even give up sex insteadwtf of talking about their estate planning. REALLY? I am clearly not doing my taxes right.
  • 13% of individuals believe that their spouse or family will be able to make decisions for them or inherit their stuff anyway. This is a smaller number, but an amazing misconception. This one is just not true.
  • Most people say they want to pass at home, yet only 33% have a health care directive saying so.
  • Americans, on average, use 100,000,000,000 shopping bags a year! That’s enough to go around the equator … twice … every day. That has nothing to do with estate planning, it just blew my mind. Get a reusable shopping bag before you die. There. Planning.

So big whoop. Nice stats, right? What’s the big deal anyway? Here are some of the consequences of not having an estate plan:

  • All of your money and stuff that you’ve worked hard for could literally go to the state. I don’t know anyone that likes taxes that much.
  • Your children could be left with nothing. This is especially true for people involved in a second, third, fourth or Trump marriage. Let’s do a quick example. A is married to B. They have kids. A dies so all A’s stuff goes to B. B remarries C later in life. B dies and all of B’s stuff (including A’s stuff because he had no plan) goes to C. C goes to live on a beach in Hawaii legally. Children get nothing. Not a thing.
  • If you own a business and don’t have a financial power of attorney, there will be no one to make decisions for your company, pay bills, access bank accounts or keep your clients happy. There goes your business. It wasn’t that important, was it?
  • Heck, if you own anything and become incapacitated without a power of attorney in place, your things could vanish by the time you regain capacity. Mortgage payments, water bills, car payments, who pays those if you are in coma or in the hospital?
  • Your children could go to foster care. Appointing a guardian for them now stops that. I don’t know what else to say about it. That’s pretty powerful.
  • All of your money could go to paying a professional you’ve never met to manage your things. Let me reiterate, you do not know this person and you have to pay them an exorbitant amount of cash. See more below.

Odds are, you will be incapacitated more than once


So we’ve played the numbers and looked at all kinds of stats. Here’s one people don’t think about, however, and definitely don’t plan for. While you will only die once, you will likely become incapacitated multiple times throughout your life.

Who makes decisions for you then?

The court, that’s who. Some judge somewhere who hasn’t met you or your family will appoint a “professional” that hasn’t met you and doesn’t know you at all to manage your finances and/or your healthcare decisions. This means someone you’ve never even talked to could decide to keep you on life support for 100 years … or pull the plug unexpectedly. We like stories with cliffhangers though. Oh, did I fail to mention you have to pay this person that doesn’t know you? A lot. So there goes that inheritance the kids could pay off their student loans with. Wait, who am I kidding. No one is ever paying off their student loans.

But I don’t have an estate


brokeI’m just going to go ahead and call bull@#%! on this one. Every single person has an estate. Maybe not the size of Prince’s or Buffet’s, but we all have something. Think of a few of these things, for instance:

  • Debt: Didn’t think this one counted, eh? Well it does. Your debt doesn’t just vanish when you die. Not even a lot of student loans go away. Have a co-signer on your loan? Those people are stuck paying your bills if you pass with no plan. Have credit card debt or private student loans? Someone still has to pay those. Only federal student loans are automatically discharged on death.
  • Family heirlooms: I realize this is an ancient term, but everyone has stuff that is important to them. Maybe you got a watch from your grandpa. Maybe you have your great grandmother’s wedding ring. Heck, maybe you have a Picaso. Who knows. The point is everyone has something important to them that they would like to have stay in the family and not get pooped on by a crow in some landfill somewhere.
  • Last wishes: This isn’t technically property, but you have the right to decide what happens to you when you pass away. Without a plan, you give up that right. More importantly, you throw this enormous burden into the face of your loved ones who will be unprepared for it. One study showed that when asked how their spouse wanted to be treated in certain medical situations, spouses guessed wrong 60% of the time. I guess your significant other really is wrong all the time. They should listen to you more often.
  • Children: This is a big one. I can’t even tell you how many people come through my doors with children and don’t have people lined up to care for them if something should happen to them. Here’s a fact for you, spouses travel together. They get in accidents together. If nothing is in place, they have left their kids to the care of the state, together. This one is so easy to solve and your children are the most important thing in your life, period.

Wrap it up


Why on earth does no one, and I mean no one, want to talk about the inevitable? After seeing the stats and knowing what could happen without an estate plan, it seems like a no-brainer. But it’s not. The hard truth of the matter is that talking about the end of your life isn’t easy. But, it’s necessary. The pain and anguish caused by not doing it is too costly. I get the point of view that some people just want to say “throw me away with the trash” or “I’m dead, what do I care.” If it were that easy and no one fought when you were gone, or no one else was impacted by someone passing away, then sure, maybe those thoughts are fine. The truth is someone, usually many people, are impacted by your death. Also, we don’t throw bodies out in case you were wondering. That’s illegal. Very. You will go to jail.

This isn’t meant to make you go out and pay huge amounts of money to get a full-blown estate plan with all the bells and whistles, like 32 different types of trusts. It is simply a letter to let you know the horror stories I have seen in my career. To spread the word about a little-known area of law called estate planning, that when you don’t know about it, truly can wreak havoc on people’s lives. So, go have the talk with your family. Stop putting it off. You don’t have to call me, but call an estate planning attorney somewhere. Most of us offer a free consult anyway, so you can bear being in the same room with a lawyer for a bit. The moral of the story is do something. You don’t have to get a root canal or give up sex. Please don’t do that.

The odds are, the ball is in your court to protect the ones you love.

*Footnotes and Citations: Statistics were obtained from LexisNexus, thevirtualattorney.comworldwatch.com, and the Center for Disease Control and Prevention.

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.