The Role of a Personal Representative or Executor

One of the most important reasons to make a will is to name your executor -- commonly called a “personal representative” in Colorado.  If the person serving is a female -- an executrix. After your death, your executor's primary job is to protect your property until any debts and taxes have been paid, and then transfer what's left to those who are entitled to it.

What is Your Role as an Executor

• (1) determine if there are any probate assets;

• (2) identify, gather, and inventory the assets of the deceased;

• (3) receive payments due to the estate, including interest, dividends, and other income (e.g., unpaid salary, vacation pay, and other company benefits);

• (4) set up a checking account for the estate;

• (5) figure out who is going to get what and how much under the Will (if there is no Will, the state’s “interstate succession laws” apply);

• (6) value or appraise the estate’s assets;

• (7) give legal notice to potential creditors (the procedure and deadlines for creditors to file claims vary from state-to-state);

• (8) investigate the validity of all claims against the estate;

• (9) pay funeral bills, outstanding debts, and valid claims;

• (10) pay the expenses of administrating the estate;

• (11) handle various paperwork, such as discontinuing utilities and charge cards, and notifying Social Security, Civil Service, and Veterans Administration of the death;

• (12) file and pay income and estate taxes;

• (13) distribute the remaining property in accordance with the instructions provided in the deceased’s Will; and

• (14) close probate.

As of 2018, only gross estates with values of more than $5.6 million are subject to federal estate taxes, but some states also impose estate taxes. Colorado is not one of those states.  They do not impose an estate tax. Your gross taxable estate is the total value of all you own, both probate assets and property that pass directly to a living beneficiary.

As you can see, serving as a personal representative can be a huge responsibility and is often a time-consuming burden. If you need help finding a good estate planning attorney, please don't hesitate to reach out to me.  I have resources to help you.

How to Help Seniors Declutter

Your senior will have accumulated a lifetime of belongings - some pieces stir deep memories while others don’t but they want to keep them.  There is a theory called the "endowment effect" that suggests we place more value on items once we claim ownership of them.  So all the things you "own" have more value to you and it is harder to get rid of.  To help Seniors, or anyone, for that matter declutter, here are a few tips.

Mobility 

Reducing clutter can create more space and reduce the probability of dangerous falls, or tripping incidents that lead to a loss of mobility. In other cases, decluttering can be helpful to you if you are experiencing limited mobility allowing for easier movement throughout the home. This is one way to let seniors know why they are "decluttering".  

Be Empathetic

Seniors are especially fond of items they have collected over time, again the "endowment effect".  It is hard for them to know that they are parting with the past and that a change is coming.  Be patient and keep the senior involved with the process.  Make sure that the care and concern for their wellbeing are being prioritized. 

Create Four Categories 

• Sale
• Donate/gift
• Discard
• Create a room/space for paperwork or items you need to go through
• Discard any worn bedding, clothing, or towels

Take One Room At A Time

By decluttering room-by-room, this can make the task less daunting, especially with a uniform process for each room.  You might consider starting with a room that is less cluttered.  You and the senior will see more progress and the next room will seem less overwhelming to them.

• Use boxes, bags, or baskets for sorting items
• Be sure to donate or sell clothing you have not worn in the past year
• Any items in a storage unit should be discarded or sold

How To Determine If An Item Is Valuable

• Check for distinctive markings
• Research items similarly made online
• Research the artist or manufacturer who created the item
• If you aren't sure, consult an expert

This is a time in seniors lives when they might possibly need some counseling.  Don't hesitate to bring in an Elder Therapist to help with the transition.  The Office On Aging in Larimer County is a great resource for help.

Why Create Powers of Attorney Documents

Why should a person create a power of attorney? 

The failure of an individual to create powers of attorney documents can render them helpless if and when they lose their ability to make decisions for themselves. In such cases, courts may appoint others to take control of the incapacitated individual's life, and the selected parties may not be who the affected individual wants in charge of their affairs. An Estate Planning Attorney can give a concerned individual more information about how to include powers of attorney in their estate plans.

What Are Powers of Attorney?

Power of Attorneys are the estate planning devices that individuals can use to give others the rights to take control of their affairs. When a person becomes incapacitated powers of attorney documents kick in and allow others to make health care decisions, financial choices, and take other action on their behalf. A power of attorney is in effect only as long as the principal is alive and it can only be enacted by a principal who is mentally competent. 

What Can A Power Of Attorney Do?

The Three Main Rolls of a Power of Attorney

• Making medical decisions on behalf of the principal
• Handling financial and legal matters on behalf of the principal
• Making decisions on behalf of someone who has lost their mental capacity

A power of attorney, while still a critical tool for managing the estate and affairs of incapacitated loved ones, has also evolved into a useful mechanism that allows individuals to grant authority to professionals with specialized skills, who can represent them in business, real estate, legal, and financial arenas that require specific knowledge the individual might not have. This allows people to level the playing field when it comes to dealing with larger institutions that have paid professional staff dedicated to acting on their behalf.

Most individuals don't like to think about it as something that may happen before they reach old age. The sense that death is something that only afflicts the elderly is a falsity, and young individuals may hurt their wealth if they do not make plans for how such assets will be managed when they are no longer able to do so on their own.

The best plan is to be pro-active.  Make it a priority to contact an attorney to help you with your future.  This could be a matter of doing it your way or having someone else make decisions for you.  

If you need help finding an attorney, please call me.  I have several I have worked with that I trust with my family matters.  Contact me at 970-672-6069 or margaret@turnkeyrealtyco.com

Documents You Should Fill Out Before You Die

Estate planning is the process of establishing a framework to manage your assets upon death, disability or incapacity. It involves creating documents that outline your wishes. While estate planning is not a pleasant task, it is critical that you implement it before you need it.

Here are seven critical documents necessary to cover the aspects of a well-devised estate plan.

1. Last Will & Testament

The fundamental purpose of a will is to outline who will receive your assets upon your death. Another important purpose of a will is to specify guardianship for your minor children. A guardian is one who takes legal responsibility for the care of your minor or incapacitated children after you are gone. It is important to understand that a will does not become effective until the date of death. So it does not provide any benefits during your lifetime. A will can be changed at any time (assuming you are not mentally incapacitated). It can be amended by using a codicil or revoked by writing a new will. A will can also create a trust upon your death. If your estate is large enough you may also need to incorporate federal estate tax planning into your documents.

2. Trust

A trust is a legal instrument that provides ongoing management for your assets. It can be inter vivos (also known as a Living Trust, which exists during your lifetime) or Testamentary (one that is created by your will upon your death). It is a good idea to leave assets in trust if the beneficiaries are minors, incapacitated, or if they are simply not fiscally responsible. The trust document names a trustee who has the responsibility of managing the assets in the trust and determines when and how much of the trust assets to distribute (subject to the terms you have written in the trust). You may want to name a trustee while your child is under a certain age, say 25 or 30. Then, once your child reaches that specific age, they can either act as their own trustee, or the trust can terminate and distribute all of the assets to your child outright.

3. Power of Attorney

A Power of Attorney allows you to empower someone else to act on your behalf for legal and financial decisions. It can be a Durable Power of Attorney, which becomes effective immediately, or a Springing Power of Attorney, which becomes effective upon a stipulated event, typically when you are disabled or mentally incompetent. It is critical that you completely trust the person to whom you provide this power, as he or she can legally act on your behalf.

4. Healthcare Power of Attorney

A Healthcare Power of Attorney (also known as a Medical Power of Attorney) gives a trusted individual the authority to make decisions about your medical treatment should you be unable to do so on your own. No financial authority is granted in this document, only medical power. So you could provide one person the Durable Power of Attorney and another person the Healthcare Power of Attorney if you desire.

5. Living Will

While the Healthcare Power of Attorney authorizes another to make medical decisions on your behalf, a Living Will (also known as a Directive to Physicians) sets out your predetermined wishes regarding end-of-life care should you become terminally ill or permanently unconscious. Essentially it takes the decision to withhold life out of the hands of your medical providers and the ones you love so that they are not burdened by it and so that you can be assured your wishes are respected.

6. HIPAA Release

One of the important provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) is the obligation that medical records be kept confidential. While this is definitely an important requirement, it can have severe unintended consequences. Without the legal authority to share medical records, your family may not be able to obtain important information regarding your medical condition and treatment if you were to become incapacitated. A HIPAA release allows your medical providers to share and discuss your medical situation with whomever you specify in the document.

7. Letter of Intent

A Letter of Intent is a simple, non-binding personal letter to the ones you love expressing your desires and special requests. It may include information regarding burial or cremation, or a specific bequest of collectibles or personal items. While it does not typically have legal authority, it can help to clear up confusion regarding your personal preferences.

Estate planning can be complex and the laws vary widely by state. This article is general in nature and is not meant to provide legal advice. I recommend that you engage the services of an estate planning attorney to discuss your wishes and prepare the appropriate documents.