• A will is declared valid or invalid;
• Property is transferred from the deceased to an heir or a beneficiary named in a will;
• An executor of an estate is given legal standing to handle the estate’s business;
• The liabilities and bills of the estate are paid;
• The assets of the estate are distributed.

Where does a probate attorney fit into the process? A probate attorney, also referred to as an estate attorney, can help prepare an estate plan that helps avoid probate, as the probate process can be costly and complex. They can also assist the executor, the person named as the estate’s administrator, with tasks that are faced in probate, such as:

• Preparing and filing probate forms and paperwork;
• Advising and assisting with the sale of the estate’s assets;
• Advising and assisting with the payment of the estate’s liabilities and bills;
• Requesting permission from the probate court for various actions as required under Colorado law;
• Obtain a taxpayer identification number for the estate and file the final tax return;

Some probate lawyers are also willing to be named as the executor of the will. In this case, they are paid a fee to oversee the distribution of assets. The fee for serving as the executor of a will is separate from the fee for preparing a will.

A probate lawyer can be hired by either a person making a will or those who are named within the will. The attorney will have an ethical duty to represent the wishes of his client to facilitate the probate process and act within the best interest of their client both before and during the probate process.

In fact, the income tax on an IRA is payable only when funds are withdrawn from the plan, normally in later retirement years when income is lower and you are assumed to be in a lower tax bracket.

While IRAs and other retirement plans are great for retirement savings; you need proper estate planning to pass the account on to your beneficiaries, since the assets in the plan are subject to federal estate and there may be other tax issues if you do not plan properly.

Without proper estate planning, in the hands of the beneficiary, the IRA or retirement plan may be worth less than one half of what it was to the original account owner. Since the IRA beneficiary can make withdrawals over his or her life expectancy, naming a young person or a minor child as beneficiaries is tempting, and it is allowed. But if it is not done properly, naming a minor can have disadvantages and result in fees that reduce the benefit of the accumulated IRA.

In general, when it comes to IRA’s, taxes and estate planning, your spouse has the greatest flexibility as the beneficiary to your retirement account, and they are able to roll over the IRA to their own IRA or decide to treat your IRA as their own IRA. This can provide more tax and planning options, but also may increase the size of the surviving spouse’s estate.

An estate planning attorney can help you determine how your retirement plan fits into your overall estate plan, and offer guidance on the best way to pass your retirement account with the least amount of tax and legal implications.

1. Missing in Action

Sometimes family members or medical providers do not know that a living will exists. If they do know there is a living will, they cannot find it. It’s important that your family knows of the document and where to locate it.

2. Poorly Drafted Documents

Many of the online living will forms are extremely vague and do not offer much guidance when it comes to the emotional decisions surrounding end of life care. Why? It is often much more complex than simply removing life support from a patient with no hope of recovery. Most people are unable to imagine many of the scenarios that can occur, let alone how they will feel in advance.

3. Emotional Choices

While your general wishes are there in black and white, there’s much more to it – the human factor. Tough decisions will need to be made, with various if/then aspects. A document may not be able to insert common sense and emotions into the picture – and sometimes that is what is needed when it comes to these decisions.

There are steps you can take to make sure your end of life wishes are heeded by having other estate planning documents in place, such as a Durable Power of Attorney for Health Care, which allows you to appoint a health care proxy to make decisions on your behalf if you become incapacitated.

An estate planning attorney can not only help you draft the legal documents needed, but they can provide direction and advice that makes the documents work toward a comprehensive estate plan that meets your specific needs and goals.

Reverse mortgages have been touted as a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person’s lifetime. Instead of making payments to a lender, the cash flow is reversed and the homeowner, who must be aged 62 or older, receives payments from the bank.

Many seniors are finding they can use a reverse mortgage to pay off debt, buy a second home or just supplement their income – and seniors are still discovering new uses for another income stream. In fact, over the last five years the number of reverse mortgages nationwide has tripled.

But a reverse mortgage is not just for the wealthy, it may serve a purpose for the senior citizen who owns a home, but has limited income, as it can allow them to remain in the home by providing money for home modifications or even home health services that may not otherwise be covered.

It’s important to realize that there are drawbacks to reverse mortgages, as the fees can be pricey and, unlike a regular mortgage that pays down your debt, a reverse mortgage is actually building debt. If you plan on only taking out a small portion of money or plan on living in your home for only a short time, then the associated fees and costs can push the effective rate of the loan considerably higher. There are also scams and misinformation that can surround reverse mortgages, so it is important to do your homework.

It is also crucial to realize that in terms of estate planning, you are reducing the size of the estate that will be left to your heirs. You should also speak with your estate planning attorney to see if this income will impact any other aspects of your estate plan.

A reverse mortgage may be useful to some senior homeowners in specific circumstances, but it needs to fit within your estate plan, and you should speak with a trusted advisor before taking this on, as it not only impacts your future, but the future of your heirs as well.

The popularity of do it yourself will kits and forms has increased over the past decade, but there are four things that may be missing from this estate planning document that can make a big difference on how smoothly your estate is ‘settled.’

Successor Executors and Guardians

Naming an executor and a guardian is an important part of drafting a will, but what happens if your choices are unwilling, unable or even unavailable to serve in that capacity? Naming backups, or successors, is critical to keeping these choices within your control.

Bond Waivers

Many probate courts require the executor of an estate to post a bond to ensure the estate and its assets are protected and debts are paid. Without a will that explicitly waives the need for a probate bond, courts may mandate their purchase, meaning more time and expense for your executor and your estate.

Contingent Beneficiaries

Unfortunately, wills aren’t updated as often as they should be. Life changes, and your estate planning documents should change with it. A will should have ‘backup’ beneficiaries in case one or more of your named beneficiaries has since passed away.

Self Proving Affidavits

A will needs to be properly witnessed by at least two parties. A self proving affidavit is an attached document signed by a notary public that shows the will was properly signed and witnessed and that it is the will of the person who signed it. Many states accept these affidavits in lieu of actual witness testimony, and it avoids the time and expense of the executor having to track down the witnesses.

An estate planning attorney can help you create a will that not only has all of the aspects that help your loved ones get through the administration of your estate, but they can work with you on other estate planning tools that meet your needs.

However, when it comes to taxes, it is important to remember that with estate planning, we are often talking about two different kinds of taxes: income taxes and estate taxes. Life insurance is normally income-tax free to the beneficiary. (There are a few exceptions, particularly if the policy is used in business partnerships).

The key to remember is that while life insurance in most instances is income-tax free, it is still taxed under the federal estate tax rules, because the federal estate tax is a tax on the transfer of property. This transfer tax is assessed on the assets you leave to the next generation. Because of this, the proceeds of all the life insurance that you own or control is included in your taxable estate for purposes of calculating your estate taxes, even if the proceeds did not come into your estate.

There are, however, estate planning tools that can address the issue, such as an ILIT, an Irrevocable Life Insurance Trust, that may be used if an estate is facing a tax burden. Work with an estate planning attorney to determine the best tools to meet your specific needs, whether it is determining the role of life insurance in your estate, drafting a will or creating a trust.

Increasing Options

Planning for situations that can come up late in life, such as the need for long term care or Medicaid planning, allows you to plan and choose options, rather than forcing your family members to make tough choices based on availability and cost factors. When it comes to Medicaid planning, which is planning for the use of this need-based program to play for long term care, those who are not in immediate need may have the luxury of distributing or protecting their assets in advance, as Medicaid law limits benefits to those who meet strict asset and income restrictions.

In fact, Medicaid law allows a five year ‘look back’ period when they review your eligibility for this program. In other words, they review any gifts or sales that are made in the previous sixty months to make sure you are not giving away or selling your property to qualify for benefits. Any improper transfers during this time can result in a period of ineligibility for Medicaid benefits.

Lowering Costs

Some estate planning tools, such as life insurance, base a monthly rate on your age. When you purchase life insurance in your earlier years, your monthly cost will be lower than the rate of a policy purchased in your later years.

Peace of Mind

All too often in the news we hear of the tragedies that can tear families apart when it comes to end of life decisions. The Teri Schiavo case stands out in this respect, as a 7 year legal battle between Ms. Schiavo’s parents and spouse made national headlines when they disagreed on whether or not to remove the feeding tube keeping her alive.

By completing advance medical directives such as a living will or durable power of attorney, you are able to document your wishes and spare your family the heartbreaking decisions and conflict that can occur in these situations.

Ancillary probate is the probate of property in a state other than the state where you live. If, at the time of your death, you own real estate or other property in your name alone, a probate will be necessary in each state where the property is owned and/or located. This is necessary to transfer the ownership of the property and clear the title, as well as advise creditors that may be located in the state.

One of the biggest drawbacks of ancillary probate is the added cost of having to administer more than one probate estate, including multiple court fees and accounting fees if the estate is extensive. Another drawback of ancillary probate can occur if a person dies without a valid Will. Because the intestacy laws, the laws which dictate the distribution of property for a deceased with no will, differ from state to state, it is possible that the heirs of an intestate estate could be different in the state of the primary probate proceeding versus the state of the ancillary probate proceeding.

The best way to minimize the impact of Probate is to work with an estate planning attorney. Spending money today to establish a valid Will, Trust, or other estate planning documents, as well as properly titling assets, can save your estate substantially when it is time for probate proceedings.

The simplest type is life insurance policy is term life. It provides coverage for a specific period of time, the term, which can be one year or more. For the lowest initial cost, annual renewable term life insurance usually fits the bill. Premiums are particularly low for young people, but they increase each year as you grow older. Level term life insurance policies, on the other hand, offer premiums that are guaranteed not to increase for a set period of time, such as 10, 20 or 30 years.

When is a life insurance policy not just a life insurance policy? When it also offers a method for savings, such as permanent life insurance. This type of life insurance is intended to remain in force for your entire life. Policies offer insurance coverage as well as the potential to accumulate cash value.

As you might expect, permanent life insurance premiums are more expensive than term premiums because some of the money is put into a savings program. The longer the policy has been in force, the higher the cash value, since more money has been paid in and the cash value has earned interest, dividends or both. If you buy a policy today, your first annual premium is likely to be much higher for a permanent life policy than for term.

The premiums for permanent life insurance policies normally stay the same over the years. That extra premium paid in the early years of the permanent policy gets invested and grows, minus the amount your agent takes as a sales commission. The gain is tax-deferred if the policy is cashed in during your life. When you die, the proceeds are usually tax-free to your beneficiary, but are normally included in the value of your estate.

Life insurance plays a critical role in estate planning, and it is important to have the policy coordinated to the other elements within your estate plan. An estate planning attorney can work with you to build a comprehensive estate plan that meets the specific needs of your family.

1. To pay expenses while an estate is in probate.

Since life insurance pays benefits to a named beneficiary, it avoids probate, and therefore the funds can be accessed more quickly than property that must be probated. Probate is the legal process that ‘settles’ an estate, and it can tie up property for months, but life insurance proceeds pass outside of this process.

2. To pay funeral costs, debt and estate administration costs.

Life insurance policies can be used to pay the costs of funerals, as well as probate fees and other debt of the deceased when an estate may have assets that are not liquid, such as real estate.

3. To create a life insurance trust.

An ILIT is an irrevocable life insurance trust, and it can be a powerful estate planning tool. An ILIT is a holding device that owns your life insurance policy for you, removing it from your estate. As its name suggests, the ILIT is irrevocable, which means once you have created this trust and funded it with an insurance policy, you may not take the policy back in your own name. But you can closely control many other aspects, such as naming the beneficiaries, the terms of the payment of benefits as well as choosing the trustee to manage the trust.

While a life insurance policy can have many advantages within an estate plan, it is important to work with an estate planning attorney to ensure that it properly coordinates to other aspects of your plan.