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Law Offices of Ronald W. Rutz
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July 26, 1999: Verifying Building Permits; Question on Insurance Proceeds

Q: I thought your recent column concerning the "short list" of items to check when looking at rural real estate was extremely helpful. But you did not include the number one item on my list- verifying that all building permits were obtained.

A: The column about rural acreage problems did not address issues involving improvements. That will be for a future column.

But you did raise an extremely important area of concern. Especially in rural areas, always have any improvements on real estate physically inspected for possible code violations and do not hesitate to check with the county planning office to be sure that all permits were obtained.

Q: In your recent column you mentioned that in Colorado having insurance proceeds payable to the estate in order to have the Will coordinate and disburse the deceased's assets was common and without the usual problems found in other states. But several weeks later I saw an article that seemed to disagree.

A: I happened to see that same article too. But the entire article was based on the assumption that the deceased did not own the policy on his or her life and that the proceed flowing back to the estate and directed by the Will would push the distributions to a non-spouse or non-spouses above 650,000 (this year), there by causing any amounts over 650,00 to be taxed.

"Cross ownership" of the policies (eg. Each spouse owns the policy on the others life) is becoming much rarer, in favor of irrevocable life insurance trusts. All the CPA's and attorneys I contacted felt my column, should stand as written and that this one issue, if present, would be quickly spotted and meshed with the overall asset distribution. (Remember the insured could not change the beneficiary designators without the owners concurrence, this raising the red flag.)

Q: What good are powers of attorney if I have to fight to have my agency recognized and with some government agencies totally denied?

A: Not too long ago, a durable power of attorney could be signed and the principal (maker of the power of attorney) would have the peace of mind knowing that his or her agent could use it if needed.

However, several governmental agencies have received legislative authority to require that its form be the only ----- that the agency would need to honor. Thus it is prudent to contact the various governmental entities most likely to be involved and determine if additional documentation might be required. Better to take the extra steps when the principal has the capacity to sign then to be sorry later.

Q: (A composite of numerous telephone calls) Your columns on junk cars in the backyard and on zoning violators by having too many unrelated people living in a dwelling were both correct but the City's enforcement leaves a lot to be desired.

A: I really have no answer for your concerns and perceptions. Maybe putting pressure on the city Manager and/or City Council persons would be the next step, if you have given up trying to work with the City staff. You might also put in a word for me about the bicyclists who weave in and out and around pedestrians on the downtown sidewalks.

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