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Law Offices of Ronald W. Rutz
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July 10, 2007: Estate Planning Review

Q: We just moved to Colorado and have been swamped by estate planning solicitations. We went to one presentation and got the scare of our lives. If we had only known how expensive and complicated it is to die in Colorado, we would never have relocated! (Sorry, just being a bit facetious.)

A: LetŐs get back to the basics of estate planning. Although I have written extensively on his topic, there seems to be a good number of new people who have started reading the Senior Voice since the last column. Thus, a few key points should be reviewed.

If your Wills were good in your home state, they are valid in Colorado, along with Durable Powers of Attorney (DPOA), although DPOAs are more likely to need changes just because of your move.

In Colorado for a married couple with $2,000,000 or less of taxable worth, all that is needed is a standard will (five pages), durable powers of attorney, possibly a living will, and titling everything either in joint tenancy or having each other named as beneficiary or payable on death. All of the basic documents will probably cost less than $300 for each spouse to set up.

For both federal and Colorado estates, there is no tax until $2,000,000 of taxable value has been accumulated. That figure is going up to $3,500,000 in 2009. There is no tax in 2010 on any amount. It is only in 2011 that the exemption drops back to $1,000,000.

Thus, for a couple currently with no tax exposure, just doing Wills would be a rational choice for the time being. If tax planning is needed or desired for defensive planning, a tax will versus a tax living trust is a viable alternative in Colorado, costing anywhere from one-half to one- fifth the amount usually paid for a living trust.

I might suggest redoing the Durable Powers of Attorney even though your out-of-state powers should work in Colorado. Often it is easier for the agent to use the wording and the format that is familiar in Colorado. I also prefer to sign four original DPOAs (in case the principal becomes incapacitated and canŐt sign additional DPOAs) which are comprehensive (any decision including medical ones can be handled). The cost is usually under $100 for each set of four Powers. (Remember, durable powers of attorney are still needed even with living trusts in place.) I might also suggest that you replace any out-of-state living wills (the "shut off the machines" document) since the Colorado form is free at any hospital and in my opinion, has less of a chance of being rejected.

Joint tenancy with right of survivorship and having each of you as the otherŐs payable on death rounds out the Colorado estate plan. At the first death, there is no probate. At the second death using unsupervised administration, the cost to run the estate through Court is less than $300, if no attorney is involved.

Having practiced for 37 years in Colorado, I have found, in my experience, it is best to keep things simple as long as we can unless the client wants otherwise. So, welcome to Colorado and do not let the self- appointed estate experts chase you out of the state. We are blessed with any number of competent estate attorneys looking to help without charging an arm and a leg, or unduly complicating your estate plan.

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