I just heard from a client of mine of a new scam.  She and many of her neighbors received a phone call last week from someone claiming to be from the US government informing her that her Medicare card had expired, and asking her for her bank account information to update their information and send her a new one.<p>

Fortunately, she immediately recognized the fraudulent nature of the call and didn’t fall for it.  Don’t you fall for it either.  And if you are not the target but you have elderly parents, be aware of the many scams that target your parents.  Keep aware of what they are doing with their financial information.

When a family member passes, there are of course a large number of competing demands for our attention during a time of grief. It is in the midst of this that collection companies often take advantage of family members of the deceased.

In Colorado, the estate of a deceased person must pay the deceased’s creditors only if there are assets in the estate in excess of state spousal and family exemptions and allowances. These can vary by the circumstances but often add up to around $50,000.00. That is in part why estates with no real estate to transfer and less than $50,000.00 in assets are not required to open a probate case in court. If the estate is not obligated to pay or lacks assets, a person’s heirs are usually not obligated to pay their debts unless they themselves were also co-signers on the account.

Nonetheless, when someone passes, collection companies for credit cards often contact the surviving family members and harass them into making payments on the deceased’s credit card accounts. These collection companies are taking advantage of family members trying to manage their grief and the deceased’s affairs and falsely claim that the family members are responsible for the debts.
In a probate case, there is an orderly process of assembling a list of the estate assets and debts, notifying creditors by publication and by mail, and determining the amounts of the estate debts that will be paid. There is never a rush to pay off accounts immediately after someone’s death and no one should allow a creditor to intimidate them into paying bills that they do not owe. It may be that it does not make sense to pay on secured loans like car loans if there is no intention to keep the car. Even where the estate has assets to pay creditors, credit card collection companies that attempt to intimidate people into paying on their loved ones’ credit card accounts are using coercion to attempt to “jump ahead” in line. For this reason, if you are handling the financial affairs of a family member, be sure to get good legal advice before attempting to settle any of the deceased’s debts.

Are you the second wife? A lawyers thoughts on the importance of estate planning if you are a second wife.

But I’m his wife!! an exasperated widow will shake her head at me when she receives a much smaller inheritance than she expected.

I have talked with widows who had assumed that because they were married at the time of their husband’s death that they would automatically inherit all of their husband’s estate, regardless of whether or not he left a will.

This is not true, if your husband had been previously married and has children with his former wife and does not leave a will, Colorado law limits the amount of money you can inherit. If you are in this situation, please talk to your husband about an estate plan. I know that you are busy and you are going to get to it one of these days but I urge you not to put it off. He can write a will leaving you as much of his estate as he wishes, but if he dies without making a will you are limited in the amount of money you can inherit.

Please check the beneficiary on his current life insurance policy. If he forgot to change it and the ex-wife is still listed, she will inherit the life insurance funds. The insurance company is legally required to distribute the funds to the person listed as beneficiary regardless of who he was married to at the time of death.

If you have any questions about this information, please e-mail me at lisa@robertsandroberts.net or call me at 720-684-4378.

In the final handful of days in 2010, Congress and the President reached an agreement to extend the current tax rates for another two years. Additionally, the legislation replaces the Estate Tax exemption of $1 million and 45% estate tax rate with an exemption of $5 million ($10 million for married couples) and a estate tax rate of 35%.

This is a great piece of legislation for people whose estate is at or above the $1 million amount. However, this deal between Congress and the President is short-lived. People with substantial assets still need to give serious consideration to whether or not their estate plan should prepare for tax consequences in the future. This is because with only a two year extension of these exemptions and rates, Congress has given us some breathing room but really only “kicked the can down the road”.

We are always here to any questions you may have.

As a snarky followup to the post below, I point you to this article about John duPont.

We are still watching and waiting in these final days to see what Congress passes with respect to Estate Tax Exemptions in FY 2011.

A large difficulty in advising clients regarding their estate planning has been the uncertainty in Federal tax laws.  This uncertainty has resulted from the tension between the political parties in Washington over tax policy.

Some years ago, as a part of a series of reforms of tax policy, the estate tax exemption was incrementally raised up to 3.5 million in 2009, and estate tax completely eliminated for 2010.  This meant that for several years, people with significant assets had a lot of margin for their estate tax planning.  Those of us in the estate planning practice have been expecting Congress to deal with the fact that the legislation expired in 2011, returning the tax exemption to only one million dollars; however, years have passed without Congress addressing this.

So baring some action in the “lame-duck” session of Congress, beginning in 2011, the estate tax exemption will return to one million dollars.  What does this mean for you?  This means that if the total amount of money and assets that could potentially pass to your heirs upon your death is close to that amount, you need to consider the state of your estate planning immediately.  The fact that you are not “worth” more than one million today does not mean that the estate tax ( at anywhere from 41% to 55% on amounts exceeding the exemption ) will not affect your heirs, especially if there are significant other assets that might be added to your estate such as life insurance.

Contact us for a no-obligation consultation.  This is not an issue you want to put off.