What is an Estate Plan?

By:  Marc E. Summers, Esq. 

What is an Estate Plan and why do I need one? What is a Will, what is a Trust? I get these questions frequently. 

Simply put, an Estate Plan is a bunch of documents that do legal stuff…. easy enough, right? But what really is an Estate Plan and what does it include? An Estate Plan encompasses your legal documents, your insurance policies, your investments, and other pay-on-death assets (and helps to make sure they all work together to accomplish your end-of-life goals). 

On the legal side, an Estate Plan is a series of documents, which include a Will and/or a Trust, that accomplish multiple things, from instructing how you want your property distributed upon your death and the nominating the person you want to be in charge of your property when you pass (called an “Estate”); to granting powers to other people, if you become incapacitated, to act on your behalf. 

An Estate Plan generally has four or five main documents: The Trust and/or Will; Property Power of Attorney; Medical Durable Power of Attorney; and the Advanced Medical and Surgical Directive (often referred to as a “Living Will”, but I call it the “Pull the Plug” document for levity and factual accuracy!). 

Why do I need an Estate Plan? My three main reasons for having an estate plan are:

1. A Will or Trust is your set of instructions regarding how you want your property distributed at your death. You are in charge of saying who gets what, or who gets nothing (I have left everything to my dog because my kid really likes surprises!). For example, you can instruct charitable giving; giving to friends, other family members, grandchildren, your favorite attorney, and, importantly, making sure your pets or livestock are taken care of after you pass away. You decide where your property goes, not some law established by the State of Colorado (which does control under circumstances when someone dies without a Will, which is called “Intestate”). Under Colorado laws regarding intestacy, your property might end up with someone you didn’t want to have it if you do not have a Will. A Will or a Trust ensures your intent is followed after your death. Furthermore, having a Will or a Trust can help to prevent your adult children (or whomever you put in charge of your Estate) from dealing with a potential mess.

2. If you have minor children and something happens to you and your spouse – who will raise them? In your Will you nominate who you want to be the Guardian of your minor children in the event you and your spouse pass away. By nominating a Guardian in your Will, you are informing a judge of who you want your child to live with and be raised by. Without your instructions, a judge must make a decision based upon what the judge believes to be in the best interest of the child – which could mean your in-laws, your brother who still lives in a basement, some distant relative. The worst cases see a “Grandparent War” in that both sets of grandparents end up in court litigating for Guardianship. Remember, your child is dealing with the death of their parent or parents, now they are thrust into the middle of their grandparents fighting over them and potentially being unsettled further during a time of tremendous grief and uncertainty. Make a Will and nominate the Guardian.

3. You only get to die once, but your opportunity to become incapacitated is unlimited. If you are in an accident and cannot make decisions for yourself (let’s, say you are unconscious and cannot make medical decisions) a power of attorney allows someone you trust to make decisions for you both concerning your property and your medical. I get this response frequently – “If I am unconscious or can’t make decisions, my spouse can make the decisions” – this is true to a point, however, think of how often you and your spouse are in a vehicle together. What if you and your spouse are in the same car accident and you are both unconscious? Who makes the decision then? Under the Medical Power of Attorney, you nominate backups to act on your behalf if your spouse cannot – just in case something like this happens. Generally, you nominate your spouse as your primary agent, then an adult child (that you trust to do a good job!), if you have one, or trusted friend or relative if you do not have a child you trust – it happens. The people you nominate to act on your behalf regarding your medical decisions or your property are called “agents.” They are subject to what is called a fiduciary duty, which is imposed by law. If they are not acting in your best interest, you or your family can have them removed, or even sue them if necessary – you never know, they make movies about this kind of stuff because it happens. Pick the person who is going to do the best job. If your adult child cannot manage their own finances, they can’t manage yours!

August is Make a Will Month, so it must be important if it has its own month. If this all sounds overwhelming, take a deep breathe, it really isn’t that bad. We can help. If you have been thinking about getting your “affairs in order,” let McDonough Law Group help you. Our attorneys will work with you to create an Estate Plan that works for you to accomplish your goals, and one that you actually understand!

Marc E. Summers, Esq.

Marc is an attorney with McDonough Law Group focusing his practice on Estate Planning, Probate and Trust Administration, Succession Planning and Business law. Marc is based in our Grand Junction, Colorado office and has been serving Colorado’s western slope since 2006.
View Marc’s LinkedIn profile.

Welcome Attorney Shelby Hughes to McDonough Law Group: A New Era in Trademark Protection

We are excited to announce the newest addition to the McDonough Law Group team, Attorney Shelby Hughes. Shelby brings a fresh perspective and experience relating to trademark law. Her focus on helping businesses protect their unique branding through trademark registrations is important for our business clients.  

Before joining our team, Shelby practiced family law and represented children as an attorney Guardian ad Litem in the State of Wyoming. This work showcased her commitment to justice and her ability to handle complex, sensitive cases with compassion and skill.

Shelby decided to pivot and concentrate on aiding businesses in establishing and safeguarding their trademarks. This transition was driven by her desire to assist companies in protecting their most valuable assets—their brand identity and intellectual property. Shelby’s move to trademark law underscores her versatility as an attorney and her eagerness to meet the evolving needs of the business community.

Shelby’s roots are deeply planted in Wyoming, where she was born and raised. She pursued her higher education in her home state, earning a B.A. in Spanish from the University of Wyoming, followed by her law degree from the University of Wyoming College of Law. 

For Businesses Looking to Secure Their Brand

Shelby’s trademark experience is crucial for businesses at any stage—whether you’re a startup looking to establish your brand, or a company aiming to protect and expand your market presence. Understanding the importance of trademark registration in the competitive business landscape is key, and Shelby is here to guide our clients through every step of the process. From initial trademark searches and filings to handling potential infringements, she is dedicated to ensuring your brand remains uniquely yours.

Looking Forward

We are thrilled to have Shelby Hughes on board and look forward to the experience and energy she brings to McDonough Law Group. Her addition represents our firm’s commitment to providing comprehensive legal services to our clients, particularly in trademark law. To learn more about how Shelby can help protect your business’s brand or help you navigate the complexities of trademark registration, schedule a consultation with Shelby or visit our website to learn more.  

Everything is Negotiable: Caution and Contracts

It may be easy to click the box, indicating you’ve read the fine print online, but Scott Slawson, McDonough Law Attorney, suggests a bit more caution, especially in contractual agreements regarding your business.

He has heard many clients insist that contracts are “merely boilerplate,” but said when another party is penning the contract; they’re adding clauses to the contract they desire that might not always be in the best interest of all involved.

“It may be words used in typical contracts, but all elements are negotiable,” he said.  

Slawson recommends thinking through the contract, considering the amount of investment at stake, and thinking through potential challenges and the results if a lawsuit were to be filed. Every contract should be reviewed by a litigator, because they have seen numerous challenges to contracts in court.  He reviews contracts with his litigation experience at the ready and suggests changes like requiring the other party to carry insurance that can serve as an ounce of prevention to avoid disaster. 

“I like to work proactively with businesses to deal with risk mitigation,” he said. “We’ll have people come in and present a contract saying it’s just boilerplate. Nothing is boilerplate. People put things in contracts for reasons, and if it’s not your contract, someone else has written that contract to include things they want and to leave out things they don’t want.”

Everything in a contract, he said, is negotiable, and signing one on the assumption that it’s “boilerplate” can cause serious problems in the future. And an outright failure to have a contract, he said, is something that astonishes him but happens with relative frequency and has led many companies and businesses to seek his counsel.

“When you leave yourself open to that sort of situation, it could be ugly if something goes wrong,” he said. “Inevitably, if you are in business for long enough, something will go wrong whether or not it’s your fault.”

Protecting everyone involved through contracts is critically important for businesses and individuals. Business partners also ought to have contracts and details spelled out in the controlling documents of a company to avoid fallout and disaster if the unforeseen occurs.

If you need a contract written or reviewed, please schedule a consultation with us today. 

Insulating Yourself from Personal Liability

Forming an LLC, according to Attorney Scott Slawson, can be a solid investment for small businesses, and much more than just a necessary evil. The formation of an LLC can shield a business owner from personal liability in a lawsuit and offer confidence to a business owner that personal assets are insulated.

Slawson, an attorney with McDonough Law Group, said he recommends the formation of corporations or LLCs to business owners, no matter how small the business. In fact, Slawson’s own small business and real estate holdings are formed as or owned by LLCs.

He does warn that even with this protection in place, business owners still must operate with behavior that is beyond reproach. Paying personal bills through a business account, comingling funds, or signing a personal guarantee of business debts can cause liability concerns.

The process of forming a corporate entity – Limited Liability Company (LLC), Limited Liability Partnership (LLP), corporations, or Wyoming’s closed corporations – is critical to prepare a company in the event a lawsuit is brought against it. “A lot of people don’t want to invest in that, but it’s an ounce of prevention type of situation,” Slawson said.

Slawson said Wyoming has long been on the cutting edge of business law. Not only was Wyoming the state that developed LLCs, but it also developed closed corporations, closely held corporations with a limited number of shareholders. “We do the formation of all of those,” he said. “We figure out what is in the best interest of the client. Are they better off being an S Corp for taxation reasons? We work with their accountants to make the best decisions based on how they would like to pay taxes.”

Another level of protection is having general liability insurance properly in place. Though it may sound like a tall tale, Slawson said he has personally known someone who slipped on a banana peel and fell in a supermarket, proving that strange things happen. Don’t allow a slip like this one, he said, to bankrupt your business. Some insurance policies, set up correctly, will pay defense and indemnification costs if a court decision doesn’t go in favor of your business.

Slawson said insurance is involved in nearly all cases, whether they involve loss or damage due to natural disasters, lawsuits, or employment disputes, which is (if obtained) covered by Employee Practice Liability Insurance. Whether a plaintiff or defendant in a case, insurance is beneficial to all involved in terms of paying a judgment, or collecting on a judgment with confidence that the funds are available through the policy. Insurance information is typically provided to attorneys at the beginning of a suit to determine, moving forward, what policies are in place that may or may not pay fees and settlements or judgments. Moreover, if a claim against a business totals an amount at or higher than the insurance policy limits, Slawson said an attorney under certain circumstances can help ensure that insurance pays settle the claim for policy limits.

Ultimately, though, representation by a skilled legal team can free up a business owner to do what they do best – run and grow their business. Whether it’s proactive preparation or timely tactics, Slawson and the rest of the McDonough Law team can be contacted by calling 970-776-3311.

You’ve Been Served, Don’t Procrastinate

Filings, admissions, discovery, allegations, interrogatories, and plaintiffs aren’t everyday jargon for most people, but when someone is faced with a lawsuit – and all of the legal speak involved – it can be incredibly stressful.

When served with a lawsuit, Scott Slawson, an attorney with McDonough Law Group, said the clock is ticking and procrastination, though perhaps tempting, is the worst move. In every jurisdiction, a response is required within a window of time. In Colorado, for example, a response must address every single factual allegation in the lawsuit which can take time.

If the complaint is subject to another filing like a motion to dismiss, that also requires an attorney’s prompt attention. The entire process is time sensitive, so his recommendation is not to waste time before obtaining legal representation.

In addition to the expertise an attorney can offer in filings, responses, and court appearances, he said capitalizing on the window of time when a full dismissal of charges is possible is perhaps the greatest advantage.

“Having the entire case dismissed is the best possible outcome,” he said.

As for attempting to proceed without legal expertise or an attorney, Slawson said the outcome is rarely less than disastrous. There’s truth to the saying that any man who is his own attorney has a fool for a client, he said.

In addition to quickly contacting an attorney, he said other actions to take include gathering pertinent documents, creating a timeline of important dates and facts, obtaining contact information for potential witnesses, and providing any insurance policy information that could pay defense and indemnification costs.
Finally, to insulate individuals in the case of a small business lawsuit, Slawson is a proponent of forming an LLC. Forming LLCs, LLPs, corporations, and, in Wyoming, close corporations, are all services McDonough Law can offer. It is, he said, a prime example of an ounce of prevention exceeding the worth of a pound of cure.

Why “I Love You” Wills Really Don’t Say “I Love You”

As Valentine’s Day brings heart-shaped chocolate boxes and roses by the dozen into your imagination, seize the moment to learn about the drawbacks of “I love you” wills and introduce yourself to the estate planning move that’s actually going to ensure you do well by your loved ones: a lifetime beneficiary trust.

Rise above the misconceptions
No aspect of estate planning brings out as much emotional decision-making as the division of assets. Many people think, “I love you,” so I’ll leave you everything. In order to understand why “I love you” wills are, contrary to their name, not the most caring of estate planning gestures, it’s important to understand the risks of “I love you” wills.

Simply put, an “I love you” will is a common name for a will in which the maker leaves all of his or her assets outright to his or her surviving spouse. Many people consider or even use this approach because they think that leaving assets in trust shows they don’t trust their spouse. They may also think that a lack of federal estate taxes protects their assets from getting into the wrong hands. Sadly, many people also think that a will can be used to avoid probate. Unfortunately, none of these things are true.

Understand why “I love you” wills aren’t effective
Say you want to make sure your spouse, Lisa, gets access to your wealth upon your death. In the case of an “I love you” will, Lisa will have to go to the probate court in order to validate your will and ultimately transfer the assets. Since Lisa receives the assets outright, Lisa’s estate plan will eventually control the distribution of whatever assets are left at her death. This could be a significant problem because Lisa could alter her estate plan at any time. Any verbal agreements about what will be done with those assets could go out the window, contrary to your wishes or any agreements you may have made.

● You could inadvertently disinherit your children. If you use an “I love you” will, your assets are now Lisa’s assets for her to leave however she wants. For example, Lisa could leave her assets to her own kids, a charity, a lover, or a new husband. Likewise, assets left outright to children could be lost in a divorce.
● Basic planning with outright inheritance sets your heirs up for asset protection issues. Once your assets are owned outright by your beneficiaries through a direct inheritance, those assets can be seized by creditors, divorcing spouses, or lost in bankruptcy. Even if your estate is below the exemption for the death tax, predatory creditors and lawsuits could still spell trouble.
● These wills still have to go through probate. Surviving spouses do not receive an exemption from probate. Even a simple will still has to go through the process, which you may not be anticipating — especially if you had hoped to keep the details of the will private. Trusts, however, don’t need to go through probate.
● An “I love you will” does not protect against guardianship or conservatorship court involvement for you or for your beneficiaries. For example, if you leave all of your assets to Lisa and she develops dementia, her entire estate (her assets plus the inheritance she received from you) could be under the control of a guardianship or conservatorship court.
● Basic plans pile more assets into survivors’ estates. Although portability between spouses can help, it still doesn’t prove useful with the generation-skipping transfer tax (GSTT). Portability isn’t available for non-spouse beneficiaries. This will only affect a very narrow group of people with very high net worth, and we don’t know yet what will happen with tax policy under the new Trump presidency. In a changing tax policy landscape, keeping yourself as informed as possible is an important tactic for ongoing success.

Explore lifetime beneficiary directed trusts
Comprehensive, trust-based estate planning with lifetime beneficiary trusts is a better option than outright inheritance for surviving spouses, children, grandchildren, or other beneficiaries. If you leave your assets in lifetime beneficiary trusts, you retain control over where assets end up in the long run. Plus, your beneficiaries obtain robust asset protection features that can keep wealth safe from courts, creditors, and divorcing spouses. Your family’s private information can stay out of public record. You can also take advantage of more sophisticated tax planning than you can with a basic will or trust with outright distributions.

With this approach, you can focus enjoying your life with the knowledge that a qualified estate planning attorney is working for your best interests now as well as down the road. Now that’s something to love and truly expresses “I love you” to your beneficiaries.