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Estate plan design meeting guide

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Estate plan design meeting guide

Design Meeting Guide

Preparing for your estate planning meeting with Colorado Wills and Estates is an important step in ensuring that your assets and wishes are protected. Please take the following steps to prepare for your Design Meeting:

  • Please review the informtion in this guide. 
  • Please log in to your Legacy Architects account and complete the “Estate” section inside your portal. 
  • Please add any additional persons that you would like to include in your estate plan in the “People” tab located in your Legacy Architects account. These individuals may be named as a beneficiary, personal representative, agent of your power of attorney, or trustee.
  • Create a list of questions to bring to your Design Meeting.

Trust Information

If you choose a trust-based estate plan, this means your Revocable Living Trust (as opposed to a Last Will) is the primary document clarifying who will receive your assets and the manner in which they will receive them.
While you are living, or while both of you are living if you are planning with a spouse or partner, you will serve as the Grantors, the Trustees, and the Primary Beneficiaries of your Revocable Living Trust. This means that once you have completed the initial steps to fund your assets to your trust, there is no practical difference in how you use the assets going forward. The assets remain within your control and direction at all times while living. Also, while you are living, you can revoke, amend, or restate your trust at any time. You can move property into and out of your trust however you like. Your trust does not need a separate tax ID number or tax filing – you can use either of your Social Security Numbers as the tax ID number for the trust, and any trust income is reported on your individual income tax return.

Naming your Trust

These trusts are personal to you and, like a corporation, they can be named in any manner you so direct. 

An example of how you may want to name your revocable living trust could be the “Smith Family Revocable Living Trust.” This name clearly identifies the trust as a revocable living trust and indicates that it is intended for the Smith family’s use. This name also implies that the trust is likely to hold a variety of assets and may be used to pass on wealth to future generations of the Smith family.

Alternatively, if you wanted to create a trust specifically to hold your retirement accounts, you might name it the “Jones Retirement Account Trust.” This name clearly conveys the trust’s purpose and implies that it is designed to hold retirement assets. This name would also be appropriate if you wanted to create separate trusts for each of your retirement accounts.

There can be some benefits to maintaining anonymity when naming your revocable living trust. By not using your own name, you can maintain a greater degree of privacy around your estate planning. This can be especially important if you want to protect yourself from unwanted attention or potential legal challenges.

In some cases, you may want to use the name of your business or a family name when naming your trust. For example, if you own a family business and want to ensure its continuation after your death, you might name your trust the “Smith Family Business Trust.”Ultimately, the name you choose for your revocable living trust will depend on your specific goals and circumstances. It’s always a good idea to consult with an experienced estate planning attorney or financial advisor to ensure that your trust is structured properly and meets your needs.

Marital Trust Options

For couples, there are two basic types of marital trust options: Disclaimer or Clayton Election. (There are of course more variations than this, although less commonly used and hence not addressed here. Please speak with your estate planning attorney for the less common types of marital trusts.)

Disclaimer Trust

If you choose a Disclaimer trust, this means the surviving spouse can elect to protect some of the joint assets from estate tax liability, but is not required to do so. This type of trust is more flexible than the Clayton Election trust described below, but it is also more exposed to potential liabilities of the surviving spouse later in life, such as a future divorce, creditor issues, bankruptcy, and lawsuits.

Clayton Election Trust

If you choose a Clayton Election trust, this means your trust is designed to maximize the estate tax deduction for both of you regardless of your dates of death or the duration between deaths. After the first spouse passes, this type of trust allows the surviving spouse to create a combination of protected trusts for the benefit of the surviving spouse. In other words, the trust divides into the revocable “Survivor’s Trust” and an irrevocable “Marital Trust.” The surviving spouse has all flexibility and control over the Survivor’s Trust. As to the Marital Trust, the surviving spouse receives all income on some specified recurring basis; may receive principal under certain situations for their health, education, maintenance, and support; and may also receive principal for other reasons as long as that is approved by an independent Trustee. This helps ensure the deceased spouse’s estate tax exemption is maximized and that any appreciation in those assets between the first death and the second death is not exposed to estate tax. While this type of trust is less flexible than a Disclaimer trust, your joint assets are better protected from potential liabilities of the surviving spouse later in life.

Grantor Incapacity

It is important to clarify how your trust is handled if you are alive but incapacitated. Guidelines let your Successor Trustee know how to determine in the first place if you are incapacitated.

Several options exist on who you would like to determine if you are incapacitated. These options include:

  • Your attending physician;
  • Two physicians that agree;
  • A disability panel of your choosing; or
  • Your spouse and your attending physician.

It is important to consider how your assets should be used and for whose benefit (e.g., your benefit, your spouse’s benefit, your children’s benefit, etc.), and whether outright gifts to persons other than you can be made during your incapacity. Common examples of outright gifts made while you are incapacitated could include distributions to support your descendants and gifts made pursuant to an existing tax strategy to minimize your estate tax liability.

Successor Trustee

Successor Trustees will manage and administer your trust after you and your spouse, if applicable are unable to do so or have passed away. In most cases, the surviving spouse and then the Successor Trustee will also serve as executors of your Last Will.

Choosing a successor trustee for your revocable living trust is a crucial decision that can affect the administration of your estate and the well-being of your beneficiaries. A successor trustee is an individual or institution that you appoint to manage your trust assets and carry out your wishes in the event that you become incapacitated or pass away.

When selecting a successor trustee, it is important to consider several factors, including their trustworthiness, financial literacy, organizational skills, availability, and willingness to take on the responsibility. Here are some examples of who could serve as a successor trustee:

Family member or friend: Many people choose a trusted family member or friend to serve as their successor trustee. This person should have a good understanding of your wishes, be able to work well with your beneficiaries, and have the time and ability to manage your trust assets effectively. It is important to choose someone who is responsible, organized, and financially savvy.

Professional trustee: A professional trustee is an experienced individual or institution that specializes in managing trusts. They may be a trust company, bank, or other financial institution that provides fiduciary services. Professional trustees can bring expertise and objectivity to the administration of your trust, but they may charge fees that are higher than those of a family member or friend.

Co-trustee: You may choose to appoint more than one trustee to manage your trust assets. A co-trustee arrangement can provide checks and balances and ensure that your wishes are carried out in the event that one trustee is unable to serve. This option is best for those who have complex trust arrangements or large estates.Corporate trustee: A corporate trustee is a type of professional trustee that is a bank or trust company. This type of trustee has experience managing large sums of money and can provide a level of professionalism and accountability that may not be available with an individual trustee.


Your Executor is the individual charged with probating your Last Will and Testament. If you have a trust, then likely your Successor Trustee is the same person as your Executor (although not always, if you have chosen something different).

Trust Protector

The role of the Trust Protector is to direct your successor trustees in matters concerning the trust and to assist, if necessary, in achieving your objectives as evidenced by the overall objectives of your estate plan. They must act in good faith in a fiduciary capacity.

As needed, the Trust Protector may remove any trustee (other than you as Grantor); alter the administrative and investment powers of your trustee; reflect tax or other legal changes that affect trust administration; and correct scriveners errors and ambiguities in the trust.

A Trust Protector is an optional position because not all trusts need one. The need for a Trust Protector depends on the specific circumstances and goals of the person creating the trust (known as the Grantor).

For example, some trusts may be relatively simple and straightforward, with a trustee who can manage the trust assets and make decisions without much oversight. In this case, a Trust Protector may not be necessary.On the other hand, if a trust is complex and has many beneficiaries, or if there is a possibility of disputes or changes in circumstances that could affect the administration of the trust, then a Trust Protector may be needed to provide guidance and oversight.

Specific Gifts

Gifts of tangible personal property can be specified in your own handwriting at any time in what is called your “personal property memorandum.” To the extent that you have any tangible personal property not specified in your memorandum, this property will be distributed as noted in this section.

“Specific gifts” are gifts of specific dollar amounts or property that are made before any residuary gifts are made. Typical specific gifts are gifts of cash and gifts of real estate. For any tangible property items that you want to give, you will have the opportunity to indicate those in a “personal property memorandum” at any time, even after you sign your trust or will. Once specific gifts and gifts on your personal property memorandum are made, then everything else flows into the “residuary.”

If a specific beneficiary named in your will or trust has died before you, then the gift that was intended for them is said to have lapsed. This means that the beneficiary’s share of the estate will not go to them, but instead will go to the other beneficiaries named in your estate plan or will pass according to the laws of intestacy if no other provision is made.

However, if you want the specific gift to go to the deceased beneficiary’s heirs or descendants, then you need to include a provision in your estate plan specifying that the gift should pass to their descendants in the event that they are not alive to receive it. This is called a “substitution clause” or “anti-lapse provision.”For example, if you have left a specific gift of your family heirloom to your sister, but she dies before you, you can include a provision that the gift should pass to your sister’s children, or if they have passed, then to their children, so that the family heirloom remains within your family.

Residuary Beneficiaries

The “residuary” of your will or trust consists of all trust assets after your debts, taxes, and other obligations are satisfied and after any specific gifts and gifts of tangible personal property are made. The residuary is typically given to a specific person or people by percentage, not dollar amounts, since the residuary is simply the remainder of all assets that are left, the dollar amount of which is impossible to know in advance.

Remote Contingent Beneficiary

The “remote contingent beneficiary” section is sometimes called the “Titanic clause.” In the unlikely event that all persons and/or charities named above deceased or not in existence, then your remaining trust assets will be distributed as part of your “remote contingency” plan.

Distribution Methods

Outright Distribution

The outright distribution method in estate planning is a strategy that involves giving assets or property directly to a beneficiary with no strings attached. Under this approach, the assets are transferred to the beneficiary immediately upon the death of the owner without any restrictions or conditions.

With outright distribution, the beneficiary has complete control over the assets and can use or dispose of them as they see fit. This approach is most commonly used when the owner trusts the beneficiary to handle the assets responsibly and does not want to impose any limitations on their use.

Outright distributions at ages and stages

Outright distributions at ages and stages refer to the approach of distributing assets to beneficiaries at specific ages or milestones in their lives. This approach is often used to provide for the beneficiary’s needs and to encourage responsible asset management.

For example, an estate plan may provide for outright distributions at certain ages, such as age 25, 30, or 35. This approach can be used to ensure that the beneficiary has reached a certain level of maturity before receiving a significant inheritance. Additionally, it can help ensure that the beneficiary has the skills and experience necessary to manage the assets responsibly.

Lifetime Asset Protection

The lifetime asset protection distribution method for beneficiaries in a revocable living trust is a strategy that aims to protect assets from potential creditors or legal claims while also providing for the beneficiary’s needs during their lifetime.

Special Needs Trust

he special needs trust distribution method is a strategy that aims to provide for the needs of a beneficiary with a disability or special needs, while also preserving their eligibility for government benefits such as Medicaid or Supplemental Security Income (SSI).

Under this approach, a special needs trust is established for the benefit of the beneficiary. The trust is managed by a trustee, who is responsible for making distributions to the beneficiary according to the terms of the trust.The trust is designed to provide for the beneficiary’s needs that are not covered by government benefits. For example, the trust can be used to pay for medical expenses, therapy, education, or housing.

Power of Appointment

A power of appointment is a legal term that refers to the ability to control who gets certain property or assets, even after the original owner has passed away.

General Power of Appointment

A general power of appointment is a legal term that gives someone the authority to decide who will receive property or assets, including the power to direct those assets to themselves.

For example, let’s say that John creates a trust and names his daughter, Sarah, as the trustee. In the trust, John includes a provision that gives Sarah a general power of appointment over the assets in the trust. This means that Sarah has the authority to decide who will receive the assets in the trust when John passes away.

If Sarah exercises her power of appointment, she could choose to distribute the assets to herself, to her siblings, or to any other person or entity she chooses. She could also choose to give some assets to charity or to any other beneficiaries of her choice.

Limited Power of Appointment

A limited power of appointment is a legal term that gives someone the authority to decide who will receive property or assets, but with specific limitations on how that authority can be exercised.

For example, let’s say that Jane creates a trust and names her son, Michael, as the trustee. In the trust, Jane includes a provision that gives Michael a limited power of appointment over a certain portion of the assets in the trust. The limitation is that the assets can only be distributed to Jane’s grandchildren, but Michael has the power to decide which grandchild should receive the assets.

Disinherited Persons

Designating disinherited persons in your estate plan may be necessary for several reasons. Here are some examples:

Estranged Family Members: If you have a family member with whom you are estranged, and you do not want them to inherit any part of your estate, it may be necessary to designate them as a disinherited person in your estate plan. For instance, you may have had a falling out with a sibling or parent and do not wish for them to receive any part of your assets upon your passing.

Previous Spouses or Partners: If you have divorced or ended a relationship with a partner, you may want to ensure that they do not receive any part of your estate. In such cases, you may need to name them as a disinherited person in your estate plan.

Children with whom you have no relationship: In some cases, individuals may have children with whom they have no relationship, either because they were born out of wedlock, given up for adoption or from a previous relationship. If you do not want these children to inherit any part of your estate, you may have to designate them as disinherited persons.Those who may challenge your will: If you anticipate a potential challenge to your will, it may be necessary to designate those individuals as disinherited persons. This will help to prevent them from being able to claim any portion of your assets, which could lead to a long and costly legal battle after your passing.

General Durable Power of Attorney

A “General Durable Power of Attorney” outlines who makes financial decisions on your behalf if you cannot. They are required to make financial decisions in your best interest, just as you would if you could communicate.

For example, if a person becomes ill or incapacitated and is unable to manage their own finances, they may choose to give a trusted family member or friend financial power of attorney to handle their financial affairs. This can ensure that bills are paid on time and that investments are managed appropriately, even if the person is unable to do so themselves. Similarly, someone who is going to be out of the country for an extended period of time may grant financial power of attorney to a trusted friend or family member so that they can manage their finances while they are away.

Health Care Power of Attorney

Your “Health Care Power of Attorney” outlines who makes medical decisions on your behalf if you cannot. They are required to make medical decisions in your best interest, just as you would if you could communicate.

HIPAA Release

“HIPAA Representatives” are individuals who you allow your doctors to communicate with regarding your care. Your Health Care Powers of Attorney will be HIPAA Representatives by default. Any additional people who you want your doctors to openly communicate with are named in this section. If someone not named in this document inquires with your doctors about your care, the privacy law called HIPAA prevents your doctors from disclosing anything about your care or condition to them.

Advance Directives

“Advance Directives” clarify exactly what medical steps you want taken in certain situations if you cannot communicate. Decisions related to life support, organ donation, disposition, and special wishes are usually documented in your Advance Directives.

Short-term Guardians

Short-term guardians of your minor children are responsible adults who would act as temporary guardians of your children in case of emergency, such as situations where you are in an accident or cannot be found. By listing short-term guardians, you are helping to ensure your children remain in the care of individuals you know and trust, vs. those you would never want with your children (or child protective services). Any individual on the list can act at any time, not necessarily in the order listed, depending on who is closest to your children at any moment they are needed.

Long-term Guardians

Long-term guardians of your minor children raise your children if you cannot. The ideal guardians for your children are someone they know and love and who has the same values as you. The guardians serve in the order named, pursuant to any notes you indicate if you name a couple who goes through a divorce or where one person in the couple is incapacitated or passes away.

Excluded Guardians

Individuals named here are excluded from serving as guardians of your minor children, documented in a confidential document to be filed in court (made public) only if needed.