A general durable power of attorney allows you to appoint an agent to manage your property and financial affairs on your behalf. Your agent can only act upon your direction. A durable power of attorney allows the agent to continue to act on your behalf if you become incapacitated. This document is useful should an emergency occur that would render you unable to manage your assets.

Estate planning documents are meant to be valid in all states. However, we generally recommend that if you move you should consider getting new documents that are certain to comply with the laws of the state where you have moved.  Banks, hospitals and other institutions may be used to seeing specific language in powers of attorney documents and they would be more likely to honor them if they were created according to Colorado law.

Both medical and financial powers of attorney give your agent and your family the authority and the directions to make decisions for you if you are not able.  It takes the pressure off those close to you to try to determine what you would want and how to go about accomplishing it.  It gives your agent the authority to act on your behalf.  If you have not executed these documents, then your family or those close to you will have to go to court seek a guardianship or conservatorship to manage your affairs.  If a property or asset is owned by a husband and wife as joint tenants and one of them becomes incapacitated, then the asset cannot be sold or transferred without having the court appoint a conservator for the incapacitated person and seek permission from the court to approve the sale.  If assets need to be liquidated to provide for care or to move into a home that better fits the needs of the individuals, this cannot be done if they have not appointed an agent to make decisions act on his or her behalf through a power of attorney.  

A Living Will, also called an Advanced Directive for Medical and Surgical Treatment, is a document that is important immediately prior to death. A living will allows you to state what your wishes are if you are terminal and on a respirator or other artificial life support or receiving artificial nutrition which only serves to postpone the moment of your death, or if you are in a persistent vegetative state.  It allows you to direct your doctors and your agent under a Medical Power of Attorney to follow your wishes about whether you want artificial life support and hydration discontinued, continued for a limited number of days or continued indefinitely. 

A medical durable power of attorney allows you to make sure someone you trust can make important medical decisions on your behalf should you become incapacitated. It allows your agent to act and communicate with your doctors and other medical personnel, retrieve medical records, and make medical decisions for you should you become unable to or become incapacitated.

A durable power of attorney has specific language stating that it remains valid after you become incapacitated.

If you have a trust that previously held property which has now been sold, and the trust doesn’t have any assets, the trust needs to be properly dissolved.  Often when a trust is created, there is also a Pour-Over Will which says that when you die, any property you have that did not get titled in the name of the trust is to be transferred in to the trust.  If you do not revoke the will, when you die, when the will is administered it will cause your property to go into the trust and then your family will have to administer the trust to distribute the property.  This will cause unnecessary time and expense.  If you no longer need the trust you should contact an attorney to properly dissolve it and make sure that your estate plan is up to date and will fit your current needs.

It is a good idea to review your estate planning documents every year.  Make sure they still reflect what you want and nominate the individuals that you want as your personal representative or trustee and agents under power of attorney. With births, deaths, marriages, divorces and changes to your financial situation and assets or when the people you’ve chosen as your personal representative, trustee or agent are no longer appropriate for those roles, you should contact an attorney to make the revisions needed. 

A trust can help you avoid probate if it has been managed correctly and all assets that are owned or have been acquired were properly titled in the name of the trust.  However, in Colorado the probate process is fairly simple and very inexpensive.  There usually isn’t a reason to try to avoid probate in Colorado although some advertisements use the fear of probate to urge people to purchase expensive trust packages.  In Colorado the courts charge a small filing fee to open an estate or file documents with the court but neither the court or government takes a portion of a person’s estate through probate.  Some states have high fees associated with probate and they will take a percentage of the deceased’s estate.  In these states a trust is necessary to avoid this charge and avoid probate.  In Colorado, that should not be a concern.

Trusts can do many things.  A trust can let you make a gift over time to beneficiaries or help to manage assets that you may own in different states.  Trusts are not public records.  If your assets are held in trust it can create privacy that you do not have with a will.  A will gets lodged with the court after a person’s death and the administration of which is approved by the probate court or registrar.  Like a will, a trust needs to be administered after a person’s death however this is a process that is not supervised, guided or approved by the court.  Trusts cost more to create and take more effort to manage appropriately.  If a trust is not managed appropriately, it can do more harm than good and create unnecessary expense when the time comes to administer the trust.  If all assets are not owned by the trust, there may be a need to file a probate case to administer the assets owned outside the trust as well as the time it will take to administer the trust.  Some advisors think that everyone needs a trust and they encourage people to purchase expensive trust packages that are often more than what a person needs.  If you need a trust and you are able to manage it appropriately, then it might be the estate plan to best fit your needs.  At Werth Law, we do not come in to the client meeting with the assumption that a trust is the proper plan.  Most people that come in with the belief a trust is the most appropriate plan.  In fact, most clients end up deciding that a will-based estate plan is more than enough to fit their need