Monthly Archives: May 2014

May 20, 2014

Trying to Avoid Trusts and Estates Litigation Arising from Divorce

by Rebecca Klock Schroer

Divorce is often a catalyst for trusts and estates litigation, particularly when the possibility of divorce was not contemplated in an estate plan.

One of the most common scenarios that causes litigation is an irrevocable trust in which the spouse is a trustee and/or beneficiary, but there is no language addressing what happens if the couple gets divorced.  This situation is often further complicated if the irrevocable trust is part of a larger wealth transfer plan involving several generations.  A dispute over the rights of a former spouse might be avoided if divorce is expressly addressed in the trust document. 

The Colorado Probate Code does not address what happens with an irrevocable trust upon divorce, but it does address the effect of divorce on many aspects of estate planning, such as powers of attorney, funeral instructions, wills and revocable trusts. 

Colo. Rev. Stat. § 15-11-804 is a detailed statute regarding the effect of divorce on probate and nonprobate transfers.  Generally, it provides that any revocable disposition, fiduciary appointment or power of appointment granted to the former spouse or the former spouse’s relatives prior to divorce is revoked.  The exceptions include a court order, separation agreement, or governing instrument that expressly states otherwise. 

In addition, Colo. Rev. Stat. § 15-11-804  provides that spouses’ interests in property as joint tenants with rights of survivorship are automatically severed and they become tenants in common upon divorce.

Unless expressly provided otherwise, divorce, annulment and legal separation automatically revoke a delegation to a spouse to direct the disposition of the declarant’s last remains. Colo. Rev. Stat. § 15-19-107(4).   The same is true for an agent under a medical durable power of attorney.  Colo. Rev. Stat. § 15-14-506(5)(c).  A spouse’s power as agent under a financial power of attorney is severed at the time a dissolution of marriage action is filed. Colo. Rev. Stat. § 15-14-710.

The provisions of the probate code addressing the effect of divorce should be reviewed carefully, because the definitions and the points of revocation or severance vary depending on the particular statute.  Also, most automatic revocations in the code can be overridden by specific language in the governing document.  There may be unique circumstances where a couple wants to avoid the automatic revocation provided by the code and in those situations, the governing document should state so clearly. 

To the extent that the possibility of divorce can be addressed, particularly when drafting irrevocable trusts, it could help mitigate the litigation that can result if a couple decides to separate down the road.

May 5, 2014

Colorado’s New Law on Mandatory Reporting of Elder Abuse Goes into Effect July 1, 2014

by Elizabeth Meck

Colorado’s new mandatory reporting of elder abuse law will require certain helping professionals to report any suspected or observed abuse or exploitation of an elderly individual to law enforcement within 24 hours.  The bill was signed into law on May 16, 2013 and takes effect on July 1, 2014.  The bill, as a result of an elder abuse task force established to develop the legislation, makes Colorado the 48th state to have mandatory reporting legislation on the books. 

Under prior law, certain professionals were encouraged to make reports of any suspected or known abuse of an at-risk adult, defined as a vulnerable individual due to mental or physical disability or aged 60 years or older.  The new law incorporates several modifications and additions to the existing law.  Specifically, it adds the definition of an at-risk elder as an individual over the age of 70 and increases the age of an at-risk adult to 70 years or older.  Colo. Rev. Stat. §§ 18-6.5-102(2)-(3).  It also clarifies the definitions of crimes against at-risk adults or elders to include undue influence resulting in conversion and caretaker neglect.  Colo. Rev. Stat. §§ 18-6.5-103(6), (7.5).  Further, the new law sets forth the reporting and response requirements, mandating that not only must the initial report be filed within 24 hours of the suspected abuse, but also that the law enforcement agency must provide notice of the report to the appropriate county agency within 24 hours of the report.  Colo. Rev. Stat. § 18-6.5-108(2)(b). 

The exhaustive list of helping professionals mandated to report under the new law includes a wide variety of professions such as health care professionals, pharmacists,  psychologists and mental health care providers, social workers, long-term care providers, clergy members, law enforcement officials and personnel, court-appointed guardians and conservators, and certain financial professionals.  See Colo. Rev. Stat. § 18-6.5-108(1)(b)(I)-(XVIII).  An individual who fails to report under the statute or one who knowingly files a false report commits a Class 3 misdemeanor.  Colo. Rev. Stat. §§ 18-6.5-108(1)(c), (4).  Upon filing a good faith report, a reporting individual is immune from any related civil action, unless he or she is the alleged perpetrator of the abuse or exploitation.  Colo. Rev. Stat. § 18-6.5-108(c)(3). 

In order to raise awareness among the public and the reporting professionals, the Colorado Department of Human Services was required to implement an awareness program by January 1, 2014.  Colo. Rev. Stat. § 26-1-105.  Further, to prepare law enforcement officers to recognize and respond to incidents of elder abuse and exploitation, the Department of Law’s Peace Officer Standards Training board (“P.O.S.T.”) was required to implement training standards and programs by January 1, 2014; and, as of January 1, 2015, local law enforcement agencies will be required to employ at least one peace officer  who has completed the training.  Colo. Rev. Stat. § 24-31-313.   No later than December 31, 2016, the Colorado Department of Human Services shall prepare a comprehensive report to assess implementation of the new law.  Colo. Rev. Stat. § 26-3.1-110. 

While attorneys are not on the list of professionals mandated to report, they will certainly come into contact with individuals who meet the definition of at-risk elders as well as professionals required to report.  This should cause us all to be increasingly alert and mindful of the provisions set forth in the new law.