Q: When it comes to estate planning, you might call me a "professional" seminar goer. I attend them all and try to read everything I come across. All of the experts seem to say it is bad for an attorney to recommend that insurance proceeds be payable to the estate. Some even suggest that it constitutes malpractice! But you seem to disagree.

A: Remember that we live in Colorado. In most states, having the insurance flow into the estate probably should be grounds for malpractice if it causes an unnecessary and usually expensive probate, or if lawyers enrich themselves by applying their mandatory percentage lawyers' fees against an inflated probate estate, or if the insurance amounts are subject to a special tax as a result of becoming part of the probate estate.

Years ago in Colorado insurance proceeds in excess of $75,000 which became part of the probate estate would be taxed. But no longer. However, I am told many sister states still impose such a tax.

This state does not have a mandatory attorney fee schedule, unlike many states. In settling an estate, Colorado attorneys can only charge a reasonable sum for the reasonable amount of work involved. Thus, for example, it usually does not take any more work to write a $10,000 check from the estate than it does to write a $100,000 check.

Remember that the cost of probate, including attorneys fees, is normally less than the cost to set up living trusts, not to mention the cost to take the living trust apart. Thus, if the planning is done through a Will (even a tax Will), the insurance proceeds are available to do such things as to pay expenses, honor specific bequests, fund the tax trust in a Will, and insure that the estate is divided the way the settlor envisions. And with the use of unsupervised administration as the probate process, inventories, accountings, and similar confidential information will not be required to be filed with the Court, so no one knows what is involved in the estate.

Additional reasons can be listed but I can assure you that Colorado attorneys do use this "prohibited" devise all the time and I have not heard of a malpractice case or disbarment because of it.

Q: Our lender refuses to approve a loan if we put real estate into a 2/3:1/3 tenants in common arrangement.

A: In many states co-owners must have "unity of interest" (in your case 50/50), but not in Colorado. As long as both of you sign the promissory note and deed of trust, your lender should not care anyway because in case of a default, it can foreclose on the entire property.

In Colorado, unequal ownership is also allowed on non-real estate properties such as bank accounts, brokerage accounts, etc. If we permit the imposition of this "unity of interest" concept, then we as Coloradoans have lost an important estate planning technique. Just have your attorney call.