Blog : Planning

What is the difference between an heir and a beneficiary?

What is the difference between an heir and a beneficiary?

When someone dies, their stuff will go to certain people. Who those people are will depend on whether the person who died left a will or trust.

If the person who died did not leave a will, the people who will get the deceased person’s assets are determined by law based on the relationship to the deceased person. Someone entitled to inherit from a deceased person by law is called an heir.

Someone’s heirs will depend on their marital status and family makeup. In Colorado, if someone is married, their spouse is an heir. Likewise, if someone has children (whether or not they are married), the children are heirs. If someone isn’t married and doesn’t have children, their parents, siblings, and even grandparents are likely to be their heirs.

Now, just because someone is identified as an heir under the law doesn’t mean they will receive anything from the deceased person’s estate. In addition to identifying the heirs of someone who has died, the statute also includes a priority order for which of the heirs are entitled to receive all or part of the estate. It’s important to understand the order of succession.

Like an heir, a beneficiary is also someone who is likely to receive a part of the estate of someone who’d died. Unlike an heir, however, a beneficiary is specifically named by the person who died in their will or trust. Because the person who died is able to name anyone they want as a beneficiary, the pool of people who could be a beneficiary is much broader than those who could be an heir. Because people usually give their estate to the same people who are listed as heirs by law, beneficiaries and heirs are often the same people so the terms are used interchangeably, however, they do have different meanings and it’s important to know the difference.

If you are looking for affordable legal help with an estate plan or probate in Colorado, schedule a free consultation today.

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This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Lauren Lester is an affordable family law, estate planning, and probate lawyer licensed in Colorado.

What is a Personal Representative?

What is a Personal Representative?

Have you been named as a Personal Representative for someone? Or are you working on your will and need to nominate a Personal Representative? Wondering what the heck a Personal Representative is and why you need one? I totally understand!

A Personal Representative is someone who has been nominated by someone to act as a fiduciary of the nominating party’s estate. Let’s break that down a little more.

A fiduciary is someone who has a legal duty to someone else. In this case, a Personal Representative has a duty to the estate, the devisees (the people who will receive from the estate under a will), the heirs (the people who will receive from the estate if the person who died left no will), and other interested persons like creditors.

A Personal Representative is required to act in a way that is impartial towards all parties of the estate, to administer the estate with care and prudence, to put the interests of the estate first before their own individual interest, and to treat every part the same.

Within the probate process itself, the Personal Representative handles tasks like creating and providing an inventory or accounting of everything in the estate, keeping accurate records, managing assets, distributing assets, and paying creditors.

While you nominate a Personal Representative in your will, that person is not actually placed in the role of Personal Representative until appointed by the Court. This is because sometimes the person nominated isn’t willing or able to be the Personal Representative at the time their loved one died. There could also be another person who feels they should be appointed as Personal Representative either because they have some sort of statutory right (like a spouse) or because they just feel they would do a better job. In this situation, the probate court would hear from each person and make a determination.

If there’s no one contesting the nomination and the person nominated is willing and able to be the Personal Representative, the process of getting that formal appointment is straightforward.

Because there can be a fair amount of work the Personal Representative is required to do, they can be paid for providing their services. The pay is required to be reasonable. Some Personal Representatives choose not to be paid, however, it’s recommended every Personal Representative keep track of his or her time spent on the administration of the estate even if they aren’t being paid.

It’s important to note that the role of a Personal Representative is a serious one and because of the fiduciary nature, the Personal Representative could be personally liable for actions they take in that role. Before you select someone to nominate as the Personal Representative in your will or before you agree to take on the appointment, it’s important to understand the role, responsibilities, and potential liability.

If you are looking for affordable legal help with an estate plan or probate in Colorado, schedule a free consultation today.

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This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Lauren Lester is an affordable family law, estate planning, and probate lawyer licensed in Colorado.

What is a gift tax and when do I need to worry about it?

What is a gift tax and when do I need to worry about it?

Because Colorado has no state gift tax, residents are free to give third parties just about anything.  But even though you are free to make gifts, that doesn’t mean you won’t have to pay taxes on the back end – because, depending on the amount, the federal gift tax may apply.

The IRS defines the federal gift tax as a “tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return.”  Importantly, the tax applies “whether the donor intends the transfer to be a gift or not.”

In essence, the federal gift tax applies to any gift of property or money (above the specified threshold discussed below) made while the donor is living.

Is there anything excluded from the IRS’s definition of “gift?”

According to the IRS, the general rule is that any gift is taxable, subject to the following exceptions:

  • Gifts that are not more than the annual exclusion for the calendar year
  • Tuition or medical expenses you pay for someone (i.e., educational and medical exclusions)
  • Gifts to qualifying charitable organizations (which are deductible from the value of the gift(s) made)
  • Gifts to your spouse; and
  • Gifts to political organizations

There are two important monetary thresholds to keep in mind. 

The first is the annual exclusion of $15,000 for 2018 (up from $14,000 in 2017) and the second is the $5.6 million ($11.2 million for married couples) lifetime exclusion.  Generally speaking, if you remain below those, you will not have to pay a federal gift tax.

If you have questions regarding your specific situation on how to comply with the IRS’s complex gift tax scheme, it is best to contact a tax professional to assist you.

If you’re looking for an affordable, flat-fee estate planning lawyer, schedule your consultation today.

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This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Lauren Lester is an affordable family law, estate planning, and probate lawyer licensed in Colorado.

Hiring a Lawyer: A Practical Guide

Hiring a Lawyer: A Practical Guide

Need to hire a lawyer but have no idea where to start or how to find the right one? The Colorado Office of Attorney Regulation Counsel has put together a comprehensive resource to help you find and work with the right lawyer.

Hiring and Working with an Attorney covers such topics as:

  • Why you should hire a lawyer
  • Lawyer referral services
  • Interviewing the lawyer
  • Assessing the lawyer’s fees
  • A lawyer’s duties
  • How you can help facilitate a productive relationship
  • How to help prevent problems
  • How to deal with problems if they occur

Click the image below to download this free resource today!

(Click to download)

If you’re interested in speaking with an affordable, flat-rate lawyer in Colorado, schedule your consultation today.

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This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Lauren Lester is an affordable family law, estate planning, and probate lawyer licensed in Colorado.

How Getting Married Affects Your Will

How Getting Married Affects Your Will

A few weeks ago, I posted about how getting divorced affects your will, but it’s not just divorce that can affect your will. Getting married can also have an effect.

In Colorado, surviving spouses have certain rights when it comes to their spouses’ estate, despite what the deceased spouse’s will may say. The two most notable rights are the elective share and the family allowance.

Because Colorado views marriage as a partnership, the State protects spouses from being entirely disinherited by the other. Spouses are entitled to a portion of the probate estate, called the “elective share”.  Receiving the elective share is not automatic, however. The surviving spouse must assert the right no later than nine months after his or her spouse dies or within six months after the deceased spouse’s will is admitted to probate, whichever comes later.

During the administration of the estate, which can take some time, the surviving spouse is also entitled to receive funds from the estate to help support his or herself and any dependent children. This entitlement is called the “family allowance” and is meant to provide financial assistance for basic necessities while the estate works its way through probate.

If you wrote a will before you were married and have not updated it since you may want to consider reviewing your will with an attorney to ensure it still meets your goals in light of the statutory rights your spouse now has. If you have questions about a common law marriage or are looking to end yours affordably,

If you have questions about your will or are looking for an affordable, flat-fee estate planning lawyer, schedule your consultation today.

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This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Lauren Lester is an affordable family law, estate planning, and probate lawyer licensed in Colorado.

How Getting Divorced Affects Your Will

How Getting Divorced Affects Your Will

Getting divorced doesn’t just end your marriage; it can also void your will.

If you drafted a will while you were married and made dispositions or gifts to your then-spouse or relatives of your spouse (except for your shared children), under Colorado law those dispositions are automatically revoked upon the dissolution of the marriage. The nomination of your spouse as your personal representative is also automatically revoked. C.R.S. §15-11-804.

While this automatic revocation generally makes sense, it also means your will can be left with large holes in it. Even worse, depending on the language in your will, the automatic voiding of some provisions may void the entire document, leaving you completely without a will and subject to Colorado’s intestacy laws.

What Colorado law doesn’t automatically revoke, however, is any designation of a former spouse as the named beneficiary for things like bank accounts and insurance policies. That means, for example, if your ex is still listed as the beneficiary of your life insurance policy, your former spouse is entitled to claim the proceeds despite the fact that you are no longer married. Updating beneficiaries is something you can do by simply contacting the institution that holds the account or policy.

If you’ve recently divorced and haven’t reviewed your will or other estate planning documents like your power of attorney, you may want to take a look at it and consider having an affordable attorney help you make the necessary updates. Now that you’re in a new chapter in your life, you want to make sure your will and other estate planning documents reflect your current goals.

If you have questions about updating your will at an affordable, flat-fee cost, schedule your consultation today.

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This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Lauren Lester is an affordable family law, estate planning, and probate lawyer licensed in Colorado.

Legal Checkup: Don’t Start a New Year Without One

Legal Checkup: Don’t Start a New Year Without One

As you jump into the new year, it’s prudent to reflect on the year that was and the changes you may have experienced. While at the time, life events can be joyous or somber, many can also have long-term effects that you may not realize.

Take a moment to consider whether you experienced any of the following events in the past year:

  • Got married
  • Got divorced
  • Had a child
  • Adopted a child
  • Lost a child
  • Lost a parent or sibling
  • Received child support
  • Provided child support
  • Bought a home
  • Sold a home
  • Acquired a large asset
  • Disposed of a large asset
  • Inherited money or other valuable assets
  • Acquired a large debt
  • Enjoyed significant appreciation of an asset
  • Changed jobs
  • Started your own business
  • Welcomed a grandchild or great-grandchild
  • Moved in with someone
  • Were diagnosed with a serious health condition
  • Lost contact with a trusted friend
  • Acquired a new life insurance policy
  • Became a trustee
  • Became a beneficiary of a trust

If you experienced one or more of these events last year, you may want to get a legal checkup to ensure everything looks “healthy” and continues to meet your personal goals.

Lester Law currently offers complimentary legal checkups to review your legal health.

To grab your complimentary legal checkup, schedule one today.

Get Your Free Legal Checkup

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This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Lauren Lester is an affordable family law, estate planning, and probate lawyer licensed in Colorado.

Colorado wrote your will. Do you know what it says?

Colorado wrote your will. Do you know what it says?

Don’t think you have will? Think again. If you haven’t written a will for yourself, the state of Colorado has one already written for you. What does the will Colorado wrote for you say? For the answer, you’ll need to look at the state’s intestacy laws.

Intestacy is the event when someone dies without a will of their own. When that happens, the state’s laws fill in for the missing will. When you die without a will in Colorado, where your stuff goes depends on your family situation at the time of death.

Here is a brief summary Colorado’s intestacy laws. This summary is in no way meant to be comprehensive or specifically describe the outcome for your particular situation.

  • If you are married but have no children, all of your stuff will go to entirely to your spouse, so long your parents are deceased.
  • If you are married and have children, your stuff may go entirely to your spouse or be divided between your spouse and children, depending on whether your children are all with your spouse and whether you or your spouse have children outside your marriage.
  • If you are not married and have children, your stuff will be divided among your children.
  • If you are not married and have no children, your stuff will go to your parents, so long as your parents are alive.

While this list may seem straightforward, there are other factors that come into play, like having children or other relatives who predecease you but have surviving offspring. To know how the Colorado intestacy laws would specifically affect you, it’s best to sit down with an attorney and discuss your situation.

If the way Colorado has written your will is not how you’d like your stuff to be given away, you’ll want to write a will for yourself. Remember, writing your will without the help of an attorney could mean your will won’t dispose of your stuff the way you want it to. It’s always best to have an attorney draft your will and other estate planning documents.

To write your will the way you want it for an affordable, flat fee, schedule your consultation today.

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This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Lauren Lester is an affordable family law, estate planning, and probate lawyer licensed in Colorado.

Will or Trust: Which One is Right for You?

Will or Trust: Which One is Right for You?

Often the first question I get regarding estate planning is whether someone should have a will or a trust. Unfortunately, there isn’t a bright-line answer. Wills and trusts are simply different tools available to create an estate plan. One is not necessarily better than the other; they are used for different purposes depending on what your goals are for how your assets should be given to your family and friends.

Generally, a will provides instructions for how your assets are divided at your death. A personal representative is appointed to oversee the division of the assets to ensure it’s done to your wishes. Once the assets have been divided, the estate is closed.

A trust is an instrument that establishes a fiduciary arrangement, which gives a Trustee the authority to hold assets on behalf of beneficiaries. The trust instrument specifies how and when assets should be passed to the beneficiaries. Trust can last long after your death, so they can be useful if you want to have control over asset distribution in the years following your death.

Below is a chart depicting some of the basic differences between a will and a trust.

Will Trust
Court oversees the administration through probate Court does not oversee the administration
Personal Representative compensated once during probate Trustee compensated on a recurring basis, usually annually
Goes into effect at the time of death Can be created prior to death
Covers property only in your name at the time of death Covers only property transferred into the trust
Part of the public record Private
Allows for appointment of a guardian for minor children Cannot use it to appoint guardian for minor children
Allows for instructions regarding funeral arrangements Cannot specify funeral arrangements
Cannot be used to plan for a disability Can be used to plan for a disability
Typically does not offer tax savings May offer tax savings

To talk more about whether a will or a trust is right for you, schedule your free consultation today. I offer flat-fee estate planning services in Colorado.

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This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Lauren Lester is an affordable family law, estate planning, and probate lawyer licensed in Colorado.

Save on Legal Costs with Unbundled Legal Services

Save on Legal Costs with Unbundled Legal Services

Unbundled legal services are becoming increasingly popular, but by the name, it may not be clear exactly what those are. “Unbundling”, also called limited scope representation, means the attorney’s involvement in your case is limited to certain predefined tasks. It is your responsibility to complete the other required tasks throughout your case.

In other words, you only buy what you need.

Unbundled services are often less expensive than full representation and can be a good alternative if you either don’t have the funds to retain counsel at his normal rate or want to do some of the work on your own but don’t want to be without some legal support. Most attorneys also offer unbundled services at a flat rate, so you’ll know exactly what the cost will be upfront.

Some of the most common unbundled services attorneys provide include:

  • Advising you on court procedures and courtroom behavior
  • Coaching you on strategy or role-playing
  • Conducting legal research
  • Drafting contracts and agreements
  • Drafting pleadings, briefs, declarations, or orders
  • Making limited appearances
  • Negotiating
  • Organizing discovery materials
  • Preparing exhibits
  • Providing legal guidance
  • Reviewing documents

If you decide to work with an attorney in a limited scope capacity, it’s important both you and the attorney know each of your responsibilities. Put in writing what tasks the attorney will and will not complete, so both of you are on the same page.

It’s important to also note that unbundling is not appropriate for all legal matters. Be sure to talk with an attorney who offers unbundled services to find out what’s best for you and your case.

If you’re interested in getting unbundled legal help in Colorado for family law, estate planning, or probate, schedule a free consultation today.

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This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Lauren Lester is an affordable family law, estate planning, and probate lawyer licensed in Colorado.