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Law Offices of Ronald W. Rutz
Senior Voice Archives

July 9, 2001: Estate Planning Pitfalls

Q: What are some of the reoccurring errors that you see people making?

A: There are so many, I'll list just a few:

TRYING TO WRITE YOUR OWN WILL. Yes you can buy a form, copy your neighbor's Will, take it off of the internet, or even scribble something on the back of an envelope. But remember, the Courts will enforce what you wrote, such as a recent Weld County case where the homemade Will was enforced but excluded the family from inheriting because of the non-Colorado wording used. Was it worth the $100 or so that was "saved"?

PICKING THE WRONG TRUSTEE OR PERSONAL REPRESENTATIVE. The cost and difficulty increases dramatically if the wrong fiduciary is selected. But a parent's enamorization with their offspring sometimes gets in the way of realistically evaluating how well certain people will handle these duties. Again to save a couple thousand dollars someone is picked who is expected to act for "free" but fails to perform causing family problems and unnecessary expenses.

NOT GETTING A SECOND OPINION. Even critical, no nonsense people who refuse to say hello to strangers will go overboard to an unsolicitated telephone call, mass mailed flyers on avoiding probate, or a mailing (usually not well done) on how to qualify for Medicaid. Obtaining information is one thing but get a second opinion from someone who you know and may not have a vested interest in getting you to "follow the program". Don't be pulled head over heels into the dog and pony show either over the telephone or at the seminars. And remember just because you keep hearing the "same tune" everywhere about a certain estate planning or elder law device or techniques, or the person wrote a book or has been in T.V., does not mean that this "expert" is giving you the best advice for Colorado.

PERSONAL PROPERTY. People like to joke that they won't be around anyway so what do they care. "Let the kids fight about it." But that is exactly the reason for doing something so the family has a chance to stay together after the trauma of losing you. Oral statements of wishes or even labels on things will not be binding. Do set these matters out either in the Will or on a separate sheet of paper if the appropriate Will clause lets you do so.

WHAT PROPERTY? You may know what you have, where it is, and what needs to be handled. But your Personal Representative certainly does not, often even not a spouse. So make a list of assets and matters needed to be handled. This one act along can significantly reduce and simplify the handling of the Estate. Otherwise your estate might have to hire an attorney or a CPA, at a hundred dollars an hour or more, to ferret things out.

PUT KIDS' NAME ON EVERYTHING. Unless you only have one child (with a Will as a backup also giving your entire estate to that child) who will not take his or her share before you die and you have filed gift tax returns, then do not just add names to assets. Otherwise, a binding gift has been made otherwise with the receiver having the right to take his or her share either outright, or having it taken by a creditor or an ex-spouse. Also, if there are more than two kids on title and one of them dies, then the share of the deceased child will not go down to the descendants of the deceased.

I DON'T WANT TO GO TO COURT. Before a person lets the fear of probate close estate planning doors and possibly significantly increase settlement costs, educate yourself on what probate is in Colorado, especially as compared to other ways of settling estates.

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