On April 9, 2005, I had the opportunity to answer questions from Coloradans on various estate planning issues. I want to thank Denver’s KUSA and 9News for inviting me to participate as a member of its estate planning panel of exerts to answer call-in questions during its LawLine 9 segment on estate planning topics.
While answering calls from the public, I noticed that many individuals had common questions and concerns. The call volume was very heavy and I have no doubt that several individuals were unable to reach us to answer their estate planning questions.
Additionally, since my colleagues noticed some of the same themes in the questions of our callers, I can only surmise that there are many members of the public with similar unanswered questions.
Following are some of the common questions I received, with the answers and advice I offered.
Question: What is a Living Will and how does it work?
Answer: Put simply, a Living Will (also called a “Declaration as to Medical and Surgical Treatment” or “Directives to Physicians”) tells your doctors when enough is enough. This document tells the doctor treating you when you no longer wish to have your life prolonged by artificial measures. The typical Living Will states that after a set number of days (determined by you), if two doctors declare that you are in a non-reversible terminal condition, you will be allowed to die with dignity without having your life prolonged by artificial means. Therefore, a Living Will operates only when you are facing an end of life situation.
Q: Is a Living Will all I need to protect myself in case of disability?
A: In my opinion, this answer is simple: NO. A Living Will only becomes operable in those situations in which you are facing an end of life situation. Therefore, the Living Will is of no help when you are unable to make decisions for yourself but not in a situation where death is imminent. I believe that by far the most important disability planning document in any estate plan is a Durable Power of Attorney for Health Care (also known as a Durable Medical Power of Attorney).
Q: How does a Durable Power of Attorney for Health Care work?
A: A Durable Power of Attorney for Health Care (also known as a Medical Power of Attorney) allows you to designate another person (your “agent”) to make decisions for you should you not be able to make decisions for yourself. Your agent will be able to step into your shoes and consent or decline different courses of treatment. The Durable Power of Attorney for Health Care differs from a Living Will in that the Durable Power of Attorney operates in all medical circumstances. A Living Will only operates to decline life sustaining procedures in an end of life situation.
Q: What happens if I do not have a Durable Medical Power of Attorney or a Living Will?
A: Under Colorado law, another person (almost always a family member) may be given the ability to consent to medical treatment on your behalf. However, there may be delay in treatment as a result of this procedure. Additionally, the person that is given the authority to make decisions on your behalf may not be the person you would have chosen to be your agent had you been given the chance.
Question: If I die without a Will, is it true that the state will take all my assets leaving nothing for my family?
Answer: The general answer to this question is NO. Without further facts, the property of a person who dies in Colorado without a Will (someone who dies “intestate”) will be distributed to that person’s immediate family—such as a spouse and children. This distribution happens under the laws of intestacy. If that person dies without a spouse or children, the next closest relatives receive the property. Although debts and taxes may be required to be paid which will decrease the amount distributed to the relatives, the state will not “take everything” if a person dies without a Will. It is important to understand that because the laws of intestacy are inflexible, a person who wishes to leave property in a manner different than the laws of intestacy dictate will need a Will to do so. Additionally, a person with a minor child should usually have a Will so that a guardian of that person’s choosing can be designated. Otherwise, the court will appoint a guardian for a minor child (usually a family member).
Q: Are there types of property that cannot be distributed using a Will?
A: Yes. Property owned as a Joint Tenant with another person passes to the other person by operation of law immediately upon your death. Therefore, this property does not become part of your probate estate (the group of assets that pass under your will). Additionally, property such as life insurance and retirement benefits and plans (such as IRAs and Qualified Plans) may pass by contract. These assets typically have a beneficiary designation that dictates who receives the property at your death.
Q: Will my divorce affect my Will?
A: Yes. Under Colorado law, once the divorce becomes final, your ex-spouse is eliminated from your Will by operation of law.
Q: Are handwritten Wills valid?
A: Yes. In Colorado, a handwritten Will is valid. This is true even if it is not witnessed as long as it is signed by the maker and the material portions of the Will are in the maker’s handwriting. However, from a practical perspective, handwritten wills are often vague or defective, causing delay and expense or even litigation.
Q: Are Wills purchased online or from a stationary store valid?
A: Usually, yes, as long as they are signed by the maker of the Will and witnessed appropriately. However, because generic Wills do not take into account the specific factual situation of the person signing the Will, these Wills may not cover all the points necessary to be considered comprehensive planning documents.
Q: Do Wills do anything other than pass property at death?
A: Yes. If the maker of a Will has a minor child or children, the Will will include language designating the person or persons that the maker of the Will would like to become guardian of the minor children. Additionally, a Will designates who you would like to be your Personal Representative (known in other states as an executor). The Personal Representative is the person charged with managing and distributing your estate after your death. If you want to pass assets to others in trust (meaning that the person receiving the asset does not get complete control over it), a Will can provide for this.
Q: How much does it cost to have an attorney prepare my will.
A: The answer to this varies widely depending on the community in which you live and the expertise of the attorney you decide to use. Most estate planning attorneys will suggest that the engagement to draft a Will include the disability planning documents discussed above. Some low income individuals will qualify for legal aid with a local legal assistance organization (like Colorado Legal Services, listed on my “Related Links” page) which may allow them to have the documents prepared without charge (or for a nominal fee). Otherwise, a Will and the related disability planning documents could cost as little as $400 for an individual ($600 for a couple) up to $2,000 or even more if the distribution scheme is complex or other issues such as tax matters must be addressed in the Will.
