Monthly Archives: June 2014

June 30, 2014

Forgotten, But Not Lost

by Jody H. Hall, Paralegal

I have been working with a client whose mother passed away more than ten years ago.  Due to the passage of time, mergers, corporate name changes and stock splits, and a variety of other circumstances, quite a bit of her property had been turned over to the State of Colorado as unclaimed property.  However, contrary to what some may believe, all is not lost!  These assets still belong to her, and in this case, to her legal heirs.  The claims process is relatively easy and can even be initiated online – you just have to start the search!

The Great Colorado Payback (the “GCP”) is a division of the Colorado State Treasurer.  They are charged with “reuniting Coloradoans with their lost or forgotten assets” – what an amazing job description!  The GCP regularly receives proceeds of bank accounts, stock certificates and dividends, oil and gas royalty payments, utility refund payments, the contents of safe deposit boxes and more from “holders” (financial institutions or other entities in possession of these assets) that have lost contact with the rightful owner.  The current list maintained by the Colorado State Treasurer contains more than 1.7 million names!

Our firm routinely recommends that our newly-appointed personal representatives check the state’s website for any unclaimed (sometimes referred to as abandoned) property for recently deceased individuals.  A GCP representative recently educated me about the dormancy period, which is 5 years from the last customer-initiated contact.  Holders typically do not turn over the accounts to the GCP until the expiration of this dormancy period.  Going forward, I will begin to check the GCP list again immediately prior to closing an estate in order to ensure that no assets belonging to the decedent, but not discovered by the personal representative (for example, statements may not be sent to the owner, and therefore received by the PR, if the holder had an old address), have been reported during the pendency of the estate (or trust) administration.

In addition to the Unclaimed Property List, the GCP office maintains an Estate of Deceased Owners and Dissolved Corporations List.  Pursuant to escheat law, it is not until twenty-one years after an estate is probated or a corporation dissolved, and their funds are turned over to the State Treasury that those funds become property of the State and are deposited into the Public Education Fund.  So even for a probate estate where there are no known heirs at the time of the estate administration, there is still time for the rightful heirs, should any be located, to receive their inheritance.  Please note that the proper claim procedure in this instance involves obtaining an order of distribution from the probate court.

For more information or to check to see if a client (deceased or alive), or even YOU, have forgotten assets on the list, go to www.colorado.gov/treasury/gcp/.  For links to other states, check out www.MissingMoney.com or www.unclaimed.org.

Be sure to consult the FAQ’s and instructions on the website to include all of the required information for your claim, particularly with assets of deceased individuals.  Now that you have found the lost assets, you do not want missing paperwork to delay your receipt even longer.

Happy searching!

June 16, 2014

Colorado’s New Uniform Premarital and Marital Agreements Act

by Megan Meyers

As of July 1, 2014, a new marital agreement statute with a primary legislative goal of providing greater protection to unrepresented parties will become effective.  The new statute, entitled the Uniform Premarital and Marital Agreements Act, Colo. Rev. Stat. §§14-2-301 et seq. (“Colorado’s New Act”) is Colorado’s adapted version of the Uniform Premarital and Marital Agreement Act. 

Enforceability Requirements

The following are the most significant requirements under Colorado’s New Act:

  • In writing.  A premarital or marital agreement must be in writing and signed by both parties.
  • Voluntary consent.  Parties must voluntarily consent to the terms of the agreement and not be under duress.
  • Access to Counsel.  Under Colo. Rev. Stat. §§14-2-309 of Colorado’s New Act, a premarital or marital agreement will be unenforceable if a party to the agreement did not have meaningful access to independent legal representation. Before signing the agreement, an unrepresented party must have had time to (i) decide whether to retain counsel to provide independent legal advice and (ii) locate counsel, obtain counsel’s advice and consider the advice provided.  If only one party is represented by counsel, the unrepresented party must either have the financial resources to engage counsel or the other party must agree to pay the reasonable fees for the unrepresented party to have independent legal representation.  Note, the practical effect of this new requirement will mean that the presentation and execution of an agreement under an expedited time frame will not be possible – particularly if one party is unrepresented.  Therefore, although independent representation by counsel for both parties is not specifically required under Colorado’s New Act, best practices still recommend this approach.  If either party is unrepresented by counsel, Colo. Rev. Stat. §14-2-309(1)(c) and (3) of Colorado’s New Act requires specific language which must be prominently included in the agreement.  Failure to include the language will invalidate the agreement. 
  • Financial Disclosure.  Adequate financial disclosure must be made which includes disclosure of income.  Specifically, a party must receive a reasonably accurate description and good-faith estimate of the value of the property, liabilities and income of the other party or have an adequate knowledge or a reasonable basis for having adequate knowledge of such property, liabilities and income.
  • Waivers of Maintenance and Attorney FeesColo. Rev. Stat. §14-2-309(5) of Colorado’s New Act includes limitations on the ability of parties to prospectively determine, modify, limit or waive maintenance and the payment of attorney’s fees in the event of divorce.  While such terms may be included in an agreement, determinations as to whether such modifications or waivers are unconscionable will be determined by the court as a matter of law at the time enforcement is sought.
  • Waiver of Marital Rights at Death.  Of additional note, beginning July 1, 2014, a unilateral waiver of a marital right or obligation on the death of a spouse is unenforceable unless the waiver is made in a premarital or marital agreement consistent with Colorado’s New Act. 

Unenforceable Terms

Colorado’s New Act also specifically delineates unenforceable terms in a premarital or marital agreement.  Examples of unenforceable terms include, but are not limited to, terms that (i) adversely affect a child’s right to support, (ii) limit remedies available to victims of domestic violence or (iii) penalize a party for initiating a legal proceeding for legal separation or divorce.

Applicability to Prior Agreements

Colorado’s New Act does not affect premarital or marital agreements executed prior to July 1, 2014 and such agreements will continue to be enforceable subject to the laws in place at the time of execution.   However, amendments from and after July 1, 2014 to previously executed premarital or marital agreements must comply with Colorado’s New Act.  Consistent with existing law, Colorado’s New Act is also applicable to parties to a civil union.

Conclusion

The use of premarital and marital agreements continues to grow for all types of couples as these agreements can be as broad or as narrow as desired by the parties.  For younger couples, such agreements can be the best way to ensure that current and future interests in gifts, inheritances and interests in trusts are protected and remain separate.  For couples who are marrying later in life or with children from a prior relationship, agreements with a broader scope can ensure that previously created wealth is protected for children, grandchildren and charitable endeavors.  Colorado’s New Act enables couples to contract prior to or during their marriage or civil union regarding their property rights in the event of the death of either party or in the event of a legal dissolution of the relationship.  In addition to the statutory requirements, practitioners should follow three basic best practice points for a valid premarital or marital agreement:  (i) allow sufficient time to review, consider and negotiate the agreement: (ii) provide financial disclosure including all assets, liabilities and income sources; and (iii) obtain independent counsel for each party.

June 2, 2014

It’s The Principle of The Matter

by Morgan Wiener

I recently read an online advice column wherein the letter writer asked the columnist whether he should challenge the will of his biological father, whom he had never met.  He was upset that the father, a wealthy man, had only left him a small percentage of the estate and had left the rest of the estate to another child (with whom the father presumably had a relationship).  In response, the columnist suggested, among other things, that the letter writer consult a lawyer and consider challenging the will, even if only as a means of getting the other child to settle for a “substantial sum” in order to avoid a court fight.  All of the advice was given with an eye towards the ultimate goal of helping the letter writer “get what should rightly be” his.

While this advice may seem somewhat shocking to those who practice in this area as no valid grounds for a will contest (lack of capacity, undue influence, etc.) were even remotely hinted at, it is fairly reflective of common perceptions about fairness and what children are entitled to inherit from their parents.  For example, I was recently explaining my work to a friend (a highly-educated and successful entrepreneur) and she asked “well, don’t you have to leave your money to your children equally?”  The answer, of course, is no, parents don’t have to leave their children anything at all, let alone leave them equal amounts.  This harsh reality may offend many deeply held personal and societal notions of fairness, but it is perfectly consistent with the law.

Fiduciary litigation is a unique area of the law in part because it is impacted by this, and other, popular views on what is fair.  I have seen a number of cases where these underlying notions of fairness, as opposed to the requirements of the law, drove a client’s desire to challenge a will, trust, or fiduciary appointment.  When it comes down to it, many of our clients are motivated by what they see as the principle of the matter.  This motivation can impact nearly every aspect of a case, from conversations with your clients (clients frequently want to discuss the emotional and personal aspects of the case) to settlement prospects (it is often difficult for the parties to compromise on matters of principle) to trial (it is not uncommon for the parties to want to air personal grievances in court, even if not strictly relevant to the questions the judge is deciding).  This motivation also impacts the lawyer’s role, and lawyers practicing in this area must be prepared to wear many hats, ranging from de facto therapist to educator to zealous advocate.  And while that may be daunting, I believe it also keeps the work interesting and rewarding. 

So even though the answer to the question of what a child (or other family member) should rightly get is, from a purely legal perspective, frequently “nothing”, because this answer conflicts with what many think is fair and should be the answer, it is often only the beginning, and not the end, of the matter.