Frequently Asked Legal Questions

• Do I need a Will?  If you do not have a Will, the laws of the State of Colorado determine who is entitled to your assets and they determine who has priority to be your personal representative (executor).
  
  
• How long is my Will good for?  Wills do not expire.  Unless you change or revoke a Will it remains in effect until you die.  Therefore, if your wishes change you must update your Will.
  
  
• Can I write my own Will?  Pursuant to Colorado Law, you may write your own Will.  It will be valid if it is signed by you and if all the material provisions of the document are in your handwriting.  There may be many problems with writing your own Will, because it may not be clear and it may not include all of the provisions that a Will should contain.

• Do I need to go through probate?  In Colorado, if you own any interest in real estate (a home), or if you own other assets which are valued at more than $80,000 your estate must be probated, whether you have a Will or not. 

• What is probate?  Probate is a court process whereby the court appoints a personal representative to administer your estate.  Probate is a process that includes filing an inventory of the estate assets, publishing a notice to creditors in a newspaper, accounting for estate income and expenses and disbursing the estate.

• What documents are included in a good estate plan?  A person should have a Last Will and Testament or a Revocable Living Trust, a health care power of attorney, a general durable power of attorney and a living will.

• I am the agent under a power of attorney, isn’t that all I need to take care of things?  A power of attorney will no longer be valid after the death of the principal.  In addition, it may not be valid once the principal becomes incapacitated unless it has the right language.  You must examine your power of attorney to see what powers it includes and under what conditions the agent may act. 

• What is a trust?  There are many types of trust.  A trust is generally a document which establishes an arrangement whereby property is transferred to a trust with the intention that it be administered by a trustee for someone’s benefit.  A trust may be established for your own benefit.  The biggest advantage for setting up a trust for your own benefit is to avoid probate. 

Tamra K. Waltemath

This article was written by Tamra K Waltemath of Tamra K. Waltemath, P.C.  This information is for general informational purposes only and does not constitute legal advice.  For specific questions, you should consult a qualified attorney. Tamra K. Waltemath is an elder law attorney focusing on wills, trusts, estate and trust administration, probate and non-probate transfers, guardianships and conservatorships. 

 

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Frequently Asked Legal Questions

All Things Real Estate: You can’t evict your mother from house she bought and paid for

By Tim Jones

All Things Real Estate: Tim Jones

Q: My widowed mother and I live in the same house. This is the house I grew up in and when I became an adult I moved out for almost 20 years. My father passed away two years ago and I moved back in to help take care of my mom. We both agreed it would be best if we put the house in both of our names so it would make it easier to manage it. We are both on title as joint tenants.

Throughout this year my mom’s health and mental stability has been getting worse and worse to the point where she is impossible to live with. She throws and breaks stuff, she tries to lock me out of the house, and last night she threatened me with a butcher knife. I want to put her in a nursing facility that can take better care of her and I told her that was what I intended to do. But she still thinks this is her house and she says she’s going to throw me out. She won’t listen when I explain things to her but it’s at the point where she has to go.

Obviously I have a big problem but I don’t know what to do. I hate to evict mom but that’s what it’s come down to.

A: Well, there’s a lot going on here which has nothing to do with real estate, but some of it does and because your problem isn’t as unique as you might think, I chose your email to answer this week.

First of all, Mom is right. It is her house. It may be yours, too, but she owns as much of it as you do. So from an ownership perspective, she has every right to live there.

The bad news for you is you can’t evict Mom. The good news is she can’t evict you, either.

Your email didn’t say anything about your mom having an estate plan, other than putting you on title to the house. As a joint tenant, when Mom dies, you will own the entire house.

But if Mom had an estate plan, it might include a medical power of attorney which would give you the right, probably after going to court, to become your mom’s conservator. As her conservator, you could place her in a nursing home.

But that presumes your mom is no longer able to take care of herself. Throwing things and trying to lock you out doesn’t necessarily mean she can’t take care of herself. And now that I think about it, neither does threatening you with a butcher knife. For all I know you may not be all that likable since you’re considering evicting your own mother from her own house.

Anyway, assuming there is no power of attorney, if you really believe your mother’s best interest is served by a conservatorship, you can go to court to ask to be appointed as her conservator.

This process is technical, and you will need the help of an attorney who specializes in conservatorships.

If your mother fights the conservatorship, or your appointment, she will have her own attorney who will attempt to convince the court she is able to take care of herself, both physically and financially.

Ultimately, there will be a hearing. Both sides will put on doctors to testify as to your mother’s state of mind.

The court also has a number of investigators who will interview Mom, do a little research and make recommendations to the judge.

In the end, you will either be appointed conservator of your mom and her estate or you won’t.

If you win, your problem is all but solved. If not, you’re left with three possible choices.

You can live in the home and make the best of it. You can move out. Or you can sue Mom to partition the property.

Partition actions are real estate lawsuits between co-owners of property in which one owner wants to cash out. It’s a real estate divorce.

Ultimately the court will order the sale of the property and decide how the proceeds are split.

While this is a legal remedy available to any co-owners of real estate, it seems pretty heartless in your case, considering Mom bought and paid for the house and you only got on title in order to “take care of my mom.”

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All Things Real Estate: You can’t evict your mother from house she bought and paid for

How to Keep Your Estate Plan from Jeopardizing a Disabled Heir’s Benefits

by James J. Ferraro, JD, Vice President/Legal Counsel

A mom tosses her smiling toddler in the air. He has Down Syndrome. Getty Images

Estate planning is not a requirement. No one can force you to make your will, create a power of attorney or to own your property in a way to avoid probate. As a result, people too often let common estate planning excuses stand in their way.

For those who fail to plan, states have default laws for managing the transfer of their property and assets at death or for controlling their property if they lose this ability because they’re critically injured or at an advanced age.

However, these laws should be viewed as a backup plan, not an ideal arrangement — especially if you have a family member with a disability. By relying solely on the default laws in the probate or guardianship code of your state without considering your heirs’ current or potential eligibility for certain benefits, you might unintentionally disqualify your disabled child or grandchild from receiving public benefits, or these benefits may be substantially reduced. Thoughtful planning on your part can create additional benefits for your heirs by preserving resources made available through private or public sources.

A person with a physical or cognitive disability may qualify for taxpayer-sponsored public benefits or privately funded benefits to support his or her living expenses, since he or she may be unable to work or to gain full employment due to a disability. These public benefits, called Supplemental Security Income (SSI) are “means tested,” meaning that to apply (or re-apply) for them, a person must utilize, or “spend down,” most of their savings or funds that are available without restriction.

Grandpa’s problematic old estate plan

I was recently introduced to a widower who has five grandchildren. His grandson suffered a severe head injury and compound fractures to his leg in an automobile accident when he was 16. He will have difficulty with fine motor skills for the remainder of this life and can’t stand for extended periods. He is now 22 and qualifies for SSI to supplement his earned income. His grandparents had a typical estate plan created before the accident. It provided that at the death of the first spouse, the balance of that person’s estate would pass to the surviving spouse. Upon the surviving spouse’s death, the balance of the remaining joint estate would be divided, leaving shares directly to their surviving children and grandchildren.

This plan would have caused an unintended consequence for this grandfather’s disabled grandson. Since his grandson would receive this inheritance directly, the Department of Human Services in his state would have considered his inheritance an available resource, disqualifying him from continuing to receive full governmental benefits, including Medicaid health insurance, until these funds were fully used. His problems would have been compounded if his father wasn’t living at his grandfather’s death, because he would have also been entitled to the share set aside for his father.

Thankfully, the grandfather updated his estate plan (described in detail below). Had he not, it still would have been possible for his grandson to continue receiving public benefits, but this would have required the state to be reimbursed for the benefits paid during his lifetime before any remaining funds could be distributed to other family members. The grandfather was resolute in his decision to change his estate plan when he became aware of the likelihood that the state would be paid a portion, if not all, of his legacy.

How supplemental needs trusts work

After collaborating with an estate planning attorney experienced in the complicated arena of public benefits planning, we explained to the grandfather that funds can be held in a trust that won’t reduce his grandson’s present benefits or disqualify him or other heirs from future benefits. These trusts are known as supplemental needs trusts or special needs trusts (SNT).

An SNT can be either a first-party trust created by a parent, grandparent, guardian or a court using the beneficiary’s own funds or a third-party trust funded with assets belonging to the trust’s creator. Because the beneficiary’s assets are used, a first-party SNT requires that the state benefits provider be reimbursed for lifetime benefits paid by it on behalf of the beneficiary. A first-party SNT could have been created by the court had the grandfather not changed his original plan, but state reimbursement would have been required.

The grandfather’s new plan created a third-party SNT for the primary benefit of his grandson that will supplement, but not supplant, his public benefits. Upon his grandson’s death, the remaining balance of the trust will be distributed to his grandson’s descendants or his other grandchildren.

Since the trust is funded with the grandfather’s money, and not his grandson’s, there is no need to reimburse any state for public benefits received. The grandfather also made similar provisions for any of his other children or grandchildren who are not presently receiving public benefits but may qualify in the future.

Alternatives to special needs trusts

Special needs trusts are one of several solutions that can be used to plan for descendants who currently receive disability benefits or may in the future. Choosing an experienced trustee to oversee a special needs trust for his grandson’s benefit was a good solution for this client, based upon the overall size of his estate and the nature of his assets. Under different circumstances, he may have considered other alternatives, such as an ABLE account, a pooled trust or purchasing exempt resources (such as a car or house) for his grandson.

ABLE accounts

ABLE accounts were created with the passage of the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014. An ABLE account is a savings accounts for individuals with disabilities. They are like 529 education savings accounts with similar tax advantages. There is a limited amount that can be held in an ABLE account, but the balance will not be considered an available resource. The maximum amount that can be contributed to an ABLE account annually is set by the federal government and is adjusted for inflation each year. In 2022 this amount was increased to $16,000. The balance held in ABLE accounts can increase from year to year as long as it doesn’t exceed the maximum amount permitted in the state where the disabled person resides. This limit currently ranges from $235,000 to $550,000, with many states allowing more than $500,000 to be held in an ABLE account.

Pooled trusts

A pooled trust can be a first-party or third-party special needs trust. This type of trust is managed by a nonprofit organization and is often a cost-effective solution, because the funds of many beneficiaries are combined into one master trust for administrative and investment purposes. Sub-accounts are then created for each beneficiary, with the disabled person’s account receiving a proportionate share of the entire fund’s earnings.

Distributions may be made by the nonprofit trustee from the beneficiary’s share and used for his needs. One important thing to note: Pooled trust providers typically can’t hold a house for a disabled beneficiary, unlike a trust created for a single beneficiary.

Purchasing exempt resources

When determining a disabled person’s resources in calculating his or her benefits, the value of personal property and household goods, one automobile and a home occupied by the person will not be counted. Purchasing exempt resources, such as an automobile or residence, can be an effective strategy for some people, particularly when combined with a pooled trust or ABLE account.

It is a good idea for everyone to review their estate plan from time to time, particularly because beneficiaries’ personal circumstances can change or there might be developments in state laws that could be advantageous to them or their beneficiaries. The time you take to carefully plan with a qualified estate and benefits planning attorney can improve your beneficiaries’ quality of life and provide additional public resources for a disabled child, grandchild or other family member.

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How to Keep Your Estate Plan from Jeopardizing a Disabled Heir’s Benefits

Becoming a Guardian in Pennsylvania

What do you do if you believe a family member or a friend has become unable to care for themselves or their finances? This is a very stressful and troubling question that, unfortunately, many people end up asking themselves.

In some instances, the individual has an estate plan in place. This might include a power of attorney, or other directive, that indicates who will make important decisions for the individual in the event that they are unable to do so. Sometimes, there is no estate plan, but the individual does not have the capacity to execute estate planning documents, including a power of attorney. All is not lost.

Pennsylvania courts have the authority to appoint a guardian to care for a person that the court determines is incapacitated. Generally speaking, a person is incapacitated when they lack the ability to care for and/or make decisions for themselves. A guardian can be an individual, agency, or entity. The guardian can be appointed to be responsible for the individual’s physical health and safety (a guardian of the person) and/or to manage the individual’s finances (a guardian of the estate).

In order for you to be appointed as a guardian, or to have someone else appointed as a guardian, a petition must be filed with the court. Petitions can be filed on an emergency basis if circumstances require the appointment of a temporary guardian.

In all cases, a hearing will be held before a judge who will determine whether the individual is incapacitated, and whether a guardian should be appointed. Once appointed, the guardian will have the legal authority and duty to assist the incapacitated person with their daily activities and making financial decisions.

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Becoming a Guardian in Pennsylvania

Who can you trust? Avoiding elder exploitation

According to the assistant secretary for aging at the U.S. Department of Health and Human Services, an estimated four out of every ten elders are financially exploited. The National Center for Elder Abuse has provided 10 signs that may indicate financial exploitation as follows:

• Sudden change in bank account or bank practice, including an unexplained withdrawal of large sums of money by a person accompanying the elder;

• Names added to an elder’s bank signature card;

• Unauthorized withdrawal of the elder’s funds using the elder’s ATM card;

• Abrupt changes in a will or other financial documents;

• Unexplained disappearance of funds or valuable possessions;

• Substandard care being provided or bills unpaid despite the availability of adequate financial resources;

• Discovery of an elder person’s signature forged for financial transactions or for the titles of his/her possessions;

• Sudden appearance of previously uninvolved relatives claiming their rights to an elder’s affairs and possession;

• Unexplained sudden transfer of assets to a family member or someone outside the family;

• Provision of services that are not necessary.*

(*As cited in Investment Advisor “10 Signs of Financial Exploitation.”)

What can you do to try to prevent financial exploitation? Having a good estate plan that includes a financial power of attorney can help. In the power of attorney, you choose the person you trust to act on your behalf. Notifying this person that he/she is your agent will put them on notice if someone is suddenly acting on your behalf financially.

The person who executes a financial power of attorney is the principal. The person you list to act on your behalf is your “agent.” If the agent acts only upon the principal’s incapacity, the document should state what “incapacity” means. For example, it may require two doctors stating you no longer have capacity to manage your affairs.

But, an individual cannot execute documents when he/she has lost capacity. Sometimes an individual trying to take advantage will fill out a financial power of attorney form and have the form executed by the principal who does not have capacity. What can be done when a person seems to have authority under a power of attorney but is taking advantage?

A medical agent, the principal’s spouse, parent, descendent, or person who demonstrates sufficient interest in the principal’s welfare, are some of the individuals who can petition a court to review the agent’s conduct and grant appropriate relief.

But what if the individual does not have any powers of attorney? If the person has lost capacity, a conservatorship and guardianship is necessary to give someone authority to act. If there are changes such as those listed in the 10 signs above, a conservatorship and guardianship may be necessary to protect the individual’s assets with court supervision.

Find out ways to protect yourself against exploitation and learn how you can intervene on an at-risk person’s behalf at “Who Can You Trust? Avoiding Elder Exploitation,” a free educational workshop that will be presented by The Law Office of Brown & Brown, P.C. in Montrose June 12 and in Delta on Monday, June 19, both from 4:30 – 5:30 p.m. Please see call 243-8250 to register.

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Who can you trust? Avoiding elder exploitation