July 11, 2017

Where Probate Law Meets Family Law

by Rebecca Klock Schroer

I recently joined forces with family law attorney Ian Shea to co-author an article for The Colorado Lawyer.  The article highlights a few of the intersections between probate law and family law, including spouse’s property interests in trusts, the automatic temporary injunction, the revocation of spouse’s interests under the Colorado Probate Code, and representation of fiduciaries in divorce proceedings.

A link to the article is below:

‘Til Death Do Us Part – Where Probate Law Meets Family Law

July 5, 2017

Electronic Wills

by Morgan Wiener

As regular readers of this blog know, one of our favorite topics is digital assets, including estate planning for digital assets.  Today, we’re taking a slightly different focus and discussing developments in digital estate planning, more commonly known as electronic wills.

One of the more recent developments in estate planning is the concept of electronic wills. In general, an electronic will is one that is signed and stored electronically. Instead of signing a hard copy document in ink, the testator electronically signs the will, and it is also signed by witnesses and notarized electronically.  Not surprisingly, companies like LegalZoom are very interested in this topic.

Read more >>

June 12, 2017

IRS Rules on Tax Impacts of Trust Modification

by Kelly Dickson Cooper

In my practice, I regularly answer questions regarding the permissibility and advisability of modifying irrevocable trusts.  With the enactment of a decanting statute in Colorado in 2016, these types of requests will only increase.  One of the major hurdles in modifying irrevocable trusts (and a trap for the unwary) is the potential tax consequences of a modification.  We often have to consider estate tax inclusion issues, the possibility of the imposition of gift taxes due to the modification, and the potential loss of generation-skipping transfer tax exemption for a trust. Read more >>

May 22, 2017

Fiduciary Duty to Elect Portability

by Matthew Skotak

The Oklahoma Supreme Court recently upheld a ruling that has required the Personal Representative of an Estate to take the necessary steps to transfer the deceased spousal unused election (DSUE) to the surviving spouse. The case stems from the rights created by the federal gift and estate tax laws regarding portability.  More specifically, beginning in 2010 one spouse was allowed to transfer, at death, his or her unused gift and estate tax exemption to the surviving spouse. Prior to 2010, each spouse had his or her own gift and estate tax exemption, but any portion of that exemption which remained unused by the spouse at death could not be transferred to the surviving spouse.

In In re Estate of Vose, 390 P.3d 238 (Okla. 2017), the Personal Representative of the Estate, one of the children of the decedent by a prior marriage, had refused to make the required election for transfer even though the surviving spouse agreed to pay the cost required to prepare the necessary Federal Estate tax return to do so. Read more >>

May 8, 2017

Recent Appellate Opinion Regarding Probate Court Jurisdiction

by Rebecca Klock Schroer

The Colorado Court of Appeals recently issued an opinion reinforcing the breadth of the probate court’s jurisdiction.  In re Estate of Arlen E. Owens, 2017COA53.

In Owens, the decedent’s brother filed a petition to set aside nonprobate payable-on-death (“POD”) transfers, alleging that at the time the decedent executed certain beneficiary designations, he lacked testamentary capacity and was unduly influenced by his caretaker.  The caretaker filed an objection based on jurisdiction, which the court denied.  After an evidentiary hearing on the petition, the trial court set aside the beneficiary designations and imposed a constructive trust over the transferred assets held by the caretaker.  Read more >>

April 17, 2017

Identity Theft Isn’t Just for the Living

by Kimberly K. Rutherford

With income tax season upon us, we are inundated with warnings from the IRS to take extra caution when filing our individual income tax returns with identity theft on the rise.  But identity theft also happens to Decedents.

We recently had an estate that filed a final individual income tax return for a Decedent and the estate was expecting a sizeable refund.  When the refund check did not arrive, we attempted to track it down with the IRS.  All calls to the IRS hit dead-end after dead-end.  No agent at the Service would talk with us even though we had the Personal Representative on the phone line with us and all necessary information to validate our identity. Read more >>

April 10, 2017

Contracts to Make Wills or Trusts

by Carol Warnick

Does the fact that a husband and wife create “mirror-image” wills or trusts mean that they have entered into a contract with their spouse to maintain the dispositive provisions in the document?  The law in Colorado is very clear that no contract exists merely because the documents are “mirror-image” or reciprocal.

Pursuant to Colo. Rev. Stat. § 15-11-514, a contract to make a devise may be established only by:

(i) provisions of a will stating material provisions of the contract, (ii) an express reference in a will to a contract and extrinsic evidence proving the terms of the contract, or (iii) a writing signed by the decedent evidencing the contract. The execution of a joint will or mutual wills does not create a presumption of a contract not to revoke the will or wills. (emphasis added).

Read more >>

March 27, 2017

Proposed Estate Tax Legislation

by Margot S. Edwards

There are several proposals to repeal the estate tax currently percolating in Congress.  None of these proposals appears to have been fully fleshed out, and it is unclear how the differences will be reconciled.  Notably, none of the proposals reflects the Trump campaign position supporting a “mark to market” tax to be imposed at death. Below is a brief summary of the currently proposed legislation, and the key differences between them.

H.R. 451:  Known as the “Permanently Repeal the Estate Tax Act of 2017,” this bill is the shortest.  It states simply that for “decedents dying after December 31, 2016, Chapter 11 of the Internal Revenue Code of 1986 is repealed.”  This operates to repeal the estate tax, but to leave the gift tax and generation-skipping transfer tax in place. Read more >>

March 13, 2017

Now That You Have Accessed the Digital Assets, Don’t Forget to Value Them

by Jody H. Hall, Paralegal

It is well documented that all of our lives have become more data-driven and we are practically tethered to our electronic devices.  Therefore, it should not be surprising to realize that more and more of our assets, and those of our clients, have a digital component.  What may be surprising, however, is just how much value we place on our digital assets.  Surveys report that the average value of personal digital assets owned by individuals globally ranges from $35,000 – $55,000.

A few key words typed into any search engine, including a review of articles written on this blog, will provide a wealth of information on accessing digital assets, including digital assets in your clients’ estate planning documents, and safeguarding your digital assets inventory.  However, after the client’s death, once we have a list of their digital assets, and have gained access those assets, it is prudent for the probate and trust practitioner to remember to value those assets.  Read more >>

March 1, 2017

Digital Evidence and Privacy: Can you ask Alexa if mom’s incapacitated?

by Morgan Wiener

Much has been written on this blog about digital assets, and you have likely given some thought to the impact that this relatively new category of assets has on estate planning and administration.  But have you considered the other ways in which new digital devices and technologies might impact your practice and your clients’ lives?  If not, a murder case in Bentonville, Arkansas, home of Walmart, will give you something to think about.

James Bates is accused of murdering his coworker Victor Collins (yes, they both worked at Walmart) in a hot tub in November 2015.  On the night of the alleged murder, Bates’s Amazon Echo was streaming music through its speaker, and Bentonville police have issued a search warrant for the Echo’s recording from that night hoping it will shed light on what happened.

The Amazon Echo is a speaker and virtual assistant that works by constantly listening to background noise and conversation.  The virtual assistant, Alexa, is activated when the Echo hears someone say “Alexa.”  The background conversations are not recorded by the Echo, but anything said after Alexa is activated is recorded.  Because Bates’s Echo was streaming music on the night of the alleged murder, the police believe that it may have been activated and recording conversations. Read more >>