Trust & Estate Section
Council Notes
Vol. 24 No. 1
March 2005
ESTATE PLANNING FOR NON-TRADITIONAL COUPLES
By Elizabeth A. Bryant and Erica L. Johnson
The legal representation of those in non-traditional relationships often involves many complex and
overlapping issues that are not present in the representation of legally married couples. Many of these issues
are difficult for lawyers to address given the lack of statutory law that applies to such relationships. In this
article, “non-traditional couples” refers to same-sex couples who cannot marry under Colorado and federal
law, and opposite-sex couples who choose not to marry for reasons both personal and financial. Many of the
same issues apply to both of these couples.
Practical Considerations
Today, most clients are more likely to be forthcoming with the information that they are in a nontraditional relationship. However, due to the stigma unfortunately still placed on same-sex relationships, it is
possible that a practitioner has had clients who are in a same-sex relationship without the practitioner
knowing it. It is important to examine your estate planning intake forms
the terminology used in such forms to assure that the forms are
WHAT’S INSIDE? and
“friendly” to a client in a non-traditional relationship. For example, does
your intake form refer only to the client’s “spouse”? If so, you should
ARTICLES:
consider modifying it to include “spouse or partner.” This is a small
Ten Common Misconceptions
change that should put clients in non-traditional relationships at ease and
Regarding Offshore Asset
Protection Planning ................. 3 encourage them to be forthcoming with you when discussing their family
and desired estate plan.
NOTICES:
Council Nominations and
Proposed Bylaw Change ......... 2
E-mailing of Council Notes ..... 2
Annual Estate
Planning Retreat....................... 5
IRS Form 8892......................... 7
Luncheon CLEs ....................... 8
Upcoming CBA-CLE
Programs ................................ 11
List of New Publications........ 13
Terminology and Drafting Issues
You will need to determine how the clients in a non-traditional
relationship want to refer to each other in the documents. Partner, life
partner, committed partner or domestic partner are some of the terms that
those in non-traditional relationships might choose. Ask the clients what
they prefer.
(Continued on page 9)
NOTE FROM THE EDITOR:
The Trust & Estate Section is committed to maintaining the high
quality of this newsletter and will continue to publish articles on
substantive legal matters as well as information about the activities
of the Section’s various committees. Please feel free to contact the
Council Notes Editor, Jennifer M. Spitz, at 303-776-5380 or
jspitz@flanderslaw.com with proposed articles or announcements
and other comments or suggestions.
Council Notes — March 2005
2
COUNCIL NOMINATIONS AND PROPOSED
BYLAW CHANGE
Elections for the Trust and Estate Council will be held at the Section’s Council meeting on
April 17, 2005. Proposed changes to the Section’s Bylaws will also be voted on at that meeting. All
Section members are welcome to attend the meeting and vote in the election.
The following slate has been nominated for offices for the fiscal year beginning in 2005:
Barbara A. Dalvano ....................................................................Chair
Michael R. Stiff ................................................................. Vice Chair
Eugene P. Zuspann II .......................................... Secretary/Treasurer
Stephen Brainerd .................................... First Year Council Member
Billie Castle ............................................ First Year Council Member
Carl Stevens............................................ First Year Council Member
It is proposed that Article III, Section 6 of the Bylaws of the Trust and Estate Section of the
Colorado Bar Association be revised to read as follows:
Section 6. Prior to the December meeting of the Council, the Chair shall
appoint a nominating committee consisting of the Chair and the three most
immediate Past-Chairs available. The committee shall report to the January
meeting of the Council its nominations for the offices of the Chair, ViceChair, Secretary/Treasurer and Council members whose terms will expire on
June 30 of the year of the annual meeting. The Council shall cause a notice
OF THE ANNUAL MEETING OF THE SECTION to be mailed GIVEN TO
THE MEMBERS OF THE SECTION no less than 30 days nor more than 60
days prior to the annual meeting. The notice shall contain a summary of any
proposed ByLaw changes recommended by the Council and the slate of
candidates nominated by the nominating committee. THE NOTICE MAY BE
GIVEN BY MAIL, FACSIMILE, OR E-MAIL. Any Section member may
make an additional nomination of an officer or Council member to be voted
upon at the annual meeting by delivery of said additional nomination to the
Chair in writing, at least two weeks prior to the annual meeting. All elections
shall be by voice vote unless otherwise ordered by resolution adopted by the
Section at the annual meeting at which the election is held.
E-mailing of Council Notes: This March issue of Council Notes is being sent by e-mail
and by regular mail. It is anticipated that future issues of Council Notes will be sent by e-mail only (not by
regular mail) to those Section members who have an e-mail address on record with the CBA. E-mailing the
newsletter will save the Section money by reducing printing and postage costs, will allow readers to receive
Council Notes more quickly and will make clipping items from the newsletter more convenient.
If the CBA does not have your current e-mail address, please provide it to Melissa Nicoletti at
melissan@cobar.org.
Council Notes — March 2005
3
TEN COMMON MISCONCEPTIONS
REGARDING OFFSHORE ASSET PROTECTION PLANNING
By David L. Lockwood
Sophisticated estate planning often includes formidable asset protection features entailing the use of
foreign situs trusts in conjunction with domestic limited partnerships. Strategic advantages are gained by an
asset protection planning trust (APT) being governed by foreign laws that determine the rights or interests
third parties may have with respect to the APT’s assets. In contrast, a domestic or U.S. trust may be as much
a target for litigation as the client who created the trust due to broader rights being granted to settlors’
creditors under U.S. law. Further, although a family limited partnership (FLP) may create impediments that
could thwart a lesser level of attack, FLPs used alone are insufficient asset protection planning vehicles for
clients to withstand an all out siege. Even among some experienced planners, however, there are several
misconceptions surrounding the use of foreign APT structures.
Misconception No. 1 – The client must forego all benefit from or control over the protected assets.
When combined, APTs and FLPs offer clients a rare combination of control over, benefit from, and
protection for their assets. For instance, a husband and wife can retain control over assets placed within the
FLP by virtue of their being the only general partners of the FLP. At a time when the waters are calm with
respect to creditor-sensitive issues, they can transfer a significant limited partner’s interest to the APT. The
APT typically is a discretionary trust during the clients’ lifetimes for the benefit of the clients, their children,
their grandchildren and any other person or entity (e.g., a charity) to whom the clients may wish to assure
benefits might be provided.
Although during any non-crisis period the APT is controlled directly by the action of the trustees,
under the laws of many offshore jurisdictions the clients can retain some degree of indirect control by serving
as the protectors of the APT. As protectors, the clients can retain the power to remove and replace trustees
(both U.S. and foreign); but, more importantly, the clients also can exercise advance veto powers over
significant trustee decision-making authorities and powers. For instance, the exercise of typical trustee
powers to (i) sell trust assets, (ii) reinvest the sale proceeds, and (iii) make distributions to or for the benefit
of any of the several beneficiaries can all be subject to the trustees’ obtaining advance approval from the
protectors. Note that the protectors’ veto power is a negative power rather than an affirmative power and that
the protectors are given no fiduciary powers with respect to trust corpus. This plus the existence of an
“impossibility of performance” defense soundly based in easily provable facts should forestall the
development of any serious risk of contempt of court issues as discussed in the now infamous federal district
court decision of last August (Eulich v. United States, 2004 WL 1844821 (N.D.Tex. 2004)).
Misconception No. 2 – The sole purpose of such planning is to force the end game to be played in a
jurisdiction with “debtor friendly” legislation.
Ideally, each planning structure should be designed to allow the clients to win any dispute over any
issue in all jurisdictions. This is not to say that a client should refrain from creating an asset protection plan
unless he or she is guaranteed to win in any or all jurisdictions, but rather this suggests that a careful plan
should render favorable results everywhere as determined under then existing applicable law.
For instance, every state in the United States either follows the Statute of Elizabeth or a more modern
statutory derivative thereof to unwind transfers made with the intent to hinder, delay or defraud creditors.
(Continued on page 4)
Council Notes — March 2005
4
(Continued from page 3)
The specifics of a given U.S. jurisdiction’s fraudulent conveyance laws are beyond the scope of this article;
but, generally, transfers may be made in anticipation of some future unaccrued and, as yet, unidentifiable
claim or liability so long as the transferor is solvent (i.e., able to meet his or her liabilities, contingent or
otherwise, as they are expected to arise in the ordinary course of events) both before and after the transfer.
In other words, this type of planning must be completed prior to the transferor’s problem arising.
Asset protection planning is a vaccine for the prevention of creditor related “diseases” and is not a cure for
those already contracted. (On the other hand, if the clients can quantify and isolate a given problem or
disease, a vaccine can be administered to impede contagion from other future problems or diseases as
discussed in No. 8, below.)
So long as transfers are made outside the scope of a given state’s fraudulent conveyance laws, the
clients “should” win even in the domestic forum. However, they and their assets will have been left subject
to the vagaries of the U.S. legal system and its seemingly ever-expanding theories of recovery against deeppocketed defendants. In fact, the uncertainty attached to the potential retroactive application of new, heroic
and original theories of recovery (whether related to fraudulent conveyance analysis or otherwise) may be
what prompted the clients to explore asset protection planning in the first place. So, while one primary goal
of this type of planning may be to move the playing field to a “debtor friendly” jurisdiction, the planning also
must take into account the laws of the domestic forum. Failure to do so exposes the practitioner to a myriad
of ethical issues.
Misconception No. 3 – Charging order protection associated with FLPs and LLCs will render sufficient
protection.
Obviously, the domestic protection gained from the use of FLPs could be retroactively eliminated by
a domestic court order in the absence of the foreign element of the plan. The popularity of FLPs is
attributable to their rendering a client’s assets unattractive to a potential future creditor, since most states’
partnership laws provide that the remedy of a creditor of a partner is a “charging order.” A charging order is
a relatively impotent remedy because (i) it does not allow the creditor to seek a forced sale of the debtor
partner’s partnership interest; (ii) it limits the creditor to receiving from the partnership anything that the
debtor partner otherwise would have received (yet the debtor can still retain the control as a general partner
over whether anything will actually be distributed); and (iii) the IRS arguably will treat a creditor having a
charging order as a substitute partner for federal income tax purposes, thereby potentially attributing taxable
income to the creditor despite his not receiving an actual distribution. (Rev. Rul. 77-137, 1977-1 C.B. 178).
The real advantage of using FLPs, however, is to separate ownership from control—not the charging
order remedy. Unfortunately, most clients still will need to access the assets of the FLP. If they were to do
so, a judgment creditor with a charging order would receive the partnership distribution instead. Against a
creditor willing to wait indefinitely for its pound of flesh, this limited type of domestic planning establishes a
waiting game only and, therefore, is of little help to clients lacking unlimited staying power.
Secondly, chinks in the armor of charging order protection have begun to appear on the domestic
scene. Courts in seven states have held that a judgment creditor was not limited in its collection remedies to
obtaining a charging order and was in fact able to attach and sell a limited partner’s interest in an FLP in
order to satisfy a judgment that a creditor had obtained some years earlier. Since the underlying rationale
behind charging order protection is to protect the partnership’s business from the problems of a given
individual partner and since most FLPs in this context are not engaged in a trade or business but rather are
only holding passive investment assets, it would not be surprising to see this line of reasoning substantially
erode even further the limited protection that charging orders afford debtor partners. The more general
(Continued on page 6)
Council Notes — March 2005
5
2005 Annual
Estate Planning
Retreat
June 9-12
Our very popular annual Estate Planning Retreat is an ideal program for
experienced estate planners, featuring an interactive discussion group format.
In addition to the substantive content, you will enjoy great social events,
networking opportunities and a wonderful location – Telluride, Colorado –
providing the ideal getaway for you and your family!
This year’s topics include:*
Income Tax Traps for Trust and Estate Lawyers
Practice Management Issues for Trust and Estate Lawyers
Community Property Issues in Estate Planning
Marital Agreements
Buy-Sell Planning
Tort Claims in Probate Administration
Trustee Roundtable
Disclaimer Planning (Uniform Disclaimer of Property Interests Act)
*Topics are subject to change
Council Notes — March 2005
6
(Continued from page 4)
problem is, of course, that the clients again remain subject to the whims of the domestic system when one
limits the planning to domestic tools.
Misconception No. 4 – Establishing a waiting game is the only positive outcome that can arise from
asset protection planning.
Any sophisticated planning structure will allow a dispute to be decided in the trust’s home court. It is
not that the clients would necessarily derive some home field advantage via favoritism or inconsistent
interpretation of existing law. Just the opposite. The clients can be in the position of accessing consistently
applied law derived from clear-cut statutes setting forth rules that, once complied with, can be depended upon
to mean what they say without retroactive change.
Recall that the APT, even while a creditor threat exists, still is a discretionary trust for the benefit of
all of the designated beneficiaries. If the foreign corporate trustee were to make a distribution to a
beneficiary after a judgment has been entered against him or her, the judgment creditor easily could execute
against that distribution. On the other hand, a distribution for the benefit of that beneficiary cannot be seized
if it is made directly to some third party in return for goods or services received. In practice, bills may be
paid by the foreign corporate trustee for the duration of the crisis. As a result, the clients’ lifestyles need not
miss a beat, even while under attack. This outcome creates unlimited staying power and is far superior to a
mere waiting game.
Misconception No. 5 – Protected assets must be moved offshore from the inception of the plan.
The best result often is accomplished by removing both the clients’ assets that are to be protected and
the persons in control of those assets from the domestic legal system. A properly drafted APT allows the
foreign corporate trustee to remove the U.S. trustees upon the occurrence of specified events. As a result, the
foreign corporate trustee for the duration of the crisis often becomes the sole trustee. The foreign corporate
trustee then also could cause the dissolution and liquidation of the FLP along with the consequent distribution
of FLP assets to the APT. Then the assets (both those that had been transferred to the APT initially and those
distributed from the FLP) physically could be moved offshore (i.e., outside the geographic and political
boundaries of the U.S.). Often, assets are only offshore for the duration of the crisis. It should be
emphasized that this action is not taken by the clients, who long ago parted with ownership of the assets upon
the initial funding of the trust, but by the foreign trustee in furtherance of its fiduciary duty to preserve the
trust income and corpus for the benefit of the beneficiaries, not the creditors of the settlor.
Misconception No. 6 – During a crisis the protected assets should be located in the offshore jurisdiction
where the trust maintains its situs and which was chosen for its specific asset protection legislation.
During the pendancy of the Anderson case (Federal Trade Commission v. Affordable Media, LLC,
et al, 179 F.3d 1228 (9th Cir. 1999)) examined at length in numerous articles that deal with pertinent contempt
of court issues, assets were surprisingly invested in a Cook Islands bank account pending the resolution of
U.S. and Cook Islands court procedures. Although it is hard to imagine that any dispute litigated in the
chosen foreign jurisdiction would be so egregious that the party challenging the APT’s ownership and control
of property might win in that chosen jurisdiction and, therefore, receive a remedy from that chosen
jurisdiction’s courts, nevertheless a planner should at least academically recognize the possibility that this
could happen. Anticipating this result, a planner may wish to advise that such assets be positioned in yet a
third jurisdiction (or, even better still, divided between multiple jurisdictions all of which are other than the
chosen foreign jurisdiction). Diversity of jurisdictions in this context creates a springboard for multiple
potential planning opportunities.
(Continued on page 7)
Council Notes — March 2005
7
(Continued from page 6)
Misconception No. 7 – Asset protection planning entails
hiding or obscuring the trail to assets.
The properly drafted APT structure is not merely an
obstacle for opponents of the clients to hurdle. Reliance should
never be placed upon obscuring the trail to assets or upon the
hare staying one step ahead of the pursuing wolf pack. While
these may indeed be lesser impediments that could frustrate
some opponents, a proper plan assumes that each potential
opponent will be an emotional, deep-pocketed judgment creditor
who is willing to travel to the ends of the earth in order to
pursue the assets. Furthermore, a proper plan assumes that such
an opponent will eventually clear any interim hurdles and will
through the discovery process or otherwise obtain a roadmap to
protected assets. The planning ultimately must work because it
is legally sound.
Misconception No. 8 – There is nothing positive to be gained
by adopting a plan after a problem arises.
IRS FORM 8892:
The IRS has issued Form 8892 to
be used for application for
extension of time to file Form 709
(gift tax return) when the taxpayer
does not apply for an extension of
time to file Form 1040. Form 8892
should also be used when a four
month extension is obtained for
filing of Form 1040 but the
taxpayer wants an additional
extension of time to file the Form
709. The total extension available
is 6 months from the due date of
the Form 709. Prior to the issuance
of Form 8892 in January, 2005,
these extension requests were made
by letter.
As set forth above, the time to protect assets generally is
before the onset of some crippling litigation which may cause
the transfer of property to be considered fraudulent with respect to that potential judgment creditor. While
true, there still is much that can be gained on behalf of a client who already has an existing problem (i.e., who
already has something pending, threatened or expected). For instance, if the client’s exposures from the
existing problem can be quantified by an expert in such matters, the client purposely could leave out of the
asset protection structure an amount of assets sufficient to meet these existing exposures. The transferred
assets, on the other hand, would not only be protected from other problems that may develop regarding this
client, but they also would be protected from this existing problem ballooning into something that no
reasonable person could have imagined (let alone predicted) at the time that the transfers into the structure
were made.
Misconception No. 9 – Real estate located in the U.S. cannot be protected.
As mentioned above, there may come a time in a crisis when both the persons in direct control of
assets and the assets themselves should be removed from the jurisdiction of the court where a claim has been
or might be brought against a client. If, for instance, a U.S. judge can gain jurisdiction over either, the judge
may attempt to apply the law of a jurisdiction other than the chosen offshore jurisdiction in direct
contradiction to existing conflict of laws or choice of laws principles; and the end result instead may then be
decided pursuant to U.S. laws. How does one remove real estate from the U.S. for the duration of a crisis?
It’s not the dirt that a client wants to protect. Rather, it is the equity in the dirt that needs protection.
If well in advance of a crisis developing an unrelated lender is given a first lien deed of trust or a first
mortgage absorbing all of the equity out of the dirt, then the borrowed proceeds can be moved offshore for
the duration of the crisis; and the planner will have converted an immovable asset into a movable asset.
Misconception No. 10 – Sophisticated offshore asset protection planning is tax motivated.
The typical asset protection component of estate planning is tax neutral. No tax benefit is gained, and
no tax detriment is imposed. The typical APT is a grantor trust for U.S. federal income tax purposes. The
(Continued on page 8)
Council Notes — March 2005
8
(Continued from page 7)
arrangement is usually gift tax neutral (in that the transfers are incomplete for U.S. federal gift tax purposes
and the gift tax will not apply until and unless a later transfer ultimately is made to someone other than the
transferor) and estate tax neutral (in that assets in the APT are included in the client’s gross estate for U.S.
federal estate tax purposes and, as a result, normal estate and generation skipping transfer tax motivated
dispositive provisions may be included just as with domestic planning documents). If a U.S. client is advised
that one can beat the IRS by simply effectuating such planning outside the U.S., the client should grab his or
her wallet first and run (not walk) as fast and as far away from such an advisor as possible. As shown, the
asset protection planning component of estate planning can be accomplished while retaining (i) significant
control over, (ii) the use of, and (iii) the beneficial enjoyment from the protected assets. The protection
afforded is sufficient incentive in and of itself, and the retention of the controls and benefits described
generally are inconsistent with the attainment of tax benefits.
David L. Lockwood is Of Counsel to Schmidt & Horen, LLP and is practicing in their Denver office. He has
served as a law professor at the University of Denver in both the Graduate Tax Program and the College of
Law, and at the University of Oklahoma College of Law. He is a frequent speaker and an author of
numerous articles on asset protection issues.
UPCOMING JOINT SECTION
TOPICAL LUNCHEON CLE S
The Trust and Estate Section sponsors Joint Section Topical Luncheon CLEs which are held on
the second Wednesday of each month. Many of these CLE presentations are co-sponsored by the Tax
Section and other Sections of the CBA. The presentations are held at noon at the Warwick Hotel, at
1776 Grant Street in Denver. The cost for 1 hour of CLE credit and lunch is $25.00. Details will be emailed to Trust and Estate Section members. The topics of upcoming presentations are as follows:
April 13, 2005
Trust and Estate Planning Update
Presented by Ted Atlass
May 11, 2005
FLPs and Strangi
Presented by Carol Warnick
June 8, 2005
Annual Legislative Update
Topic and speaker to be announced
You can participate in the luncheon seminars by phone from your office and also get CLE credit. The
cost for the call-in is $20.00. To register for the call-in program contact the CBA by calling
(303) 860-1115, ext. 727, or by e-mailing lunches@cobar.org. Once you have registered, the Bar
Association staff will e-mail you the materials as well as the call-in number and further instructions.
Council Notes — March 2005
9
(Continued from page 1)
When referring to the marital status of the clients in a Will or Trust, many practitioners simply state
the clients in a non-traditional relationship are not married. True, “single” is legally correct since persons in a
same-sex relationship are currently not allowed to marry under Colorado or federal law. However, “single”
fails to recognize what, for many clients, is a committed relationship, one that would be a marriage if the law
would allow. For clients in same-sex relationships, the practitioner could recognize the relationship with
language such as:
“I am not legally married. I have a committed partner, Jane Doe. Jane Doe and I are
unable to marry under the law of the state of Colorado. Any reference in my will to my
“committed partner” or to my “partner” is to Jane Doe. I intend Jane Doe to benefit from my
estate.”
This language not only gives recognition to the clients’ relationship, but also indicates their intent
with respect to their wishes regarding each other. Caution should be used, however, when dealing with
opposite-sex couples. One must avoid the possible inference that the parties are in a common law marriage.
It should be clearly stated that the parties are not married and do not intend to be considered married for any
purpose.
Joint Parenting of Children
Another drafting issue arises when those in a non-traditional relationship are parenting children
together. Colorado law does not allow co-adoption by a non-traditional couple, whether same or opposite
sex. It is possible to have both parents in a same-sex relationship named on the birth certificate of a child
using the paternity statutes.1 If both parents have their names on the child’s birth certificate, the reference to
children will mirror that used for parents who are legally married to each other.
If there has not been a “birth certificate” proceeding to have the adopted or biological parent and the
psychological parent both declared the legal parents of a child, the psychological parent does have some legal
rights regarding the child.2 However, because the child is not an heir of the psychological parent under the
intestacy laws of Colorado, the psychological parent must document his or her intent in estate planning
documents. The following is an example of language that can be used when there is a psychological parent:
“My partner, Jane Doe, has a biological child, Jimmy Doe, born November 29, 1996.
Although I am not biologically related to Jimmy Doe, Jane Doe and I are raising such child
together as a family. Any reference in my will to “my child” or “my children” is to such child
as well as to any child subsequently born to me, legally adopted by me or declared by a court
to be my legal child.”
Additionally, you need to be mindful that the child is also not a legal heir of the psychological
grandparents. If the psychological grandparents want their grandchild to inherit under a Will or a Trust the
psychological grandparents must make specific provisions for that grandchild in their estate planning
documents.
Nomination of Personal Representative
There is no statutory priority for a non-married partner to serve as personal representative.3 Clients
who believe they have no probate assets or that their estate is not large enough to warrant making a Will
should be advised that, if they want their partner to serve as their personal representative to oversee the
(Continued on page 10)
Council Notes — March 2005
10
(Continued from page 9)
administration of the estate, they must have a Will that specifically nominates the partner as personal
representative. Even if there are no probate assets to dispose of, creating a Will to nominate a partner as
personal representative is crucial to making sure a surviving partner can direct the disposition of the deceased
partner’s last remains. See Disposition of Last Remains, below.
In Terrorem Clause
There is difference of opinion as to whether an In Terrorem Clause should be used in a Will. Many
clients in non-traditional relationships have family members who support and encourage their committed
relationship. However, there may be clients whose family of origin does not accept the client’s relationship.
Those clients may ask that an In Terrorem clause be included in their Will. If such a clause is used, it is
important that you explain to your client that, by law, such a clause is unenforceable if probable cause exists
for initiating a proceeding against the Will.4
If a client chooses to disinherit a person who would take under the laws of intestacy, the client could
write a letter explaining the reasons behind their wishes and place a copy of that letter with the Will. Such a
writing could offer an explanation to a court asked to examine the issue and avoids a possible testamentary
libel case being brought against the decedent’s estate (if the reason stated for the disinheritance is libelous in
nature or no longer true).
Common Law Marriage
For those opposite-sex couples who choose not to marry, they must be made aware of the issue of
common law marriage. In Colorado, a common law marriage is established by the mutual consent or
agreement of the parties to be husband and wife, followed by a mutual and open assumption of a marital
relationship.5 There is a common misperception that a couple must be residing together for a certain number
of years before they can be considered common law married. This is not the case and non-married oppositesex couples need to be advised of this fact. They should be advised not to refer to their partner as a spouse.
Some practitioners advise clients who choose not to marry to register their relationships with the Denver or
Boulder Domestic Partnership Registry.6 Registration of a domestic partnership may be evidence that the
parties are domestic partners, and thus, not spouses.
Termination of Relationship
Colorado law provides automatic protection upon divorce for those in a legal marriage upon the
dissolution of their marriage.7 Unfortunately, that same protection is not provided to those in non-traditional
relationships. Practitioners advising those in non-traditional relationships must explain that, upon dissolution
of the relationship, they each must affirmatively act to revoke or change their estate planning documents
(Will and Advance Directives) and beneficiary designations if they no longer want their ex-partner to have
agency power or receive an asset.
Unfortunately, the following scenario is not uncommon. After a non-traditional relationship has
ended, the parties forget to change their estate planning documents. One ex-partner dies. The deceased expartner’s Will nominates the surviving ex-partner as personal representative of the estate, and names the expartner as sole beneficiary of the estate. Education of your clients as to these issues is imperative to avoid
these problems.
(Continued on page 11)
Council Notes — March 2005
11
(Continued from page 10)
Collateral Documents
There are collateral documents that should be discussed with partners in a non-traditional relationship.
Medical Power of Attorney
This document is critical if your client does not want their partner and their blood family to have to
decide among themselves which one of them should make medical decisions. The medical proxy decisionmaker statute8 allows a partner (as a “close friend”) to be an interested party; however, it does not guarantee
that the partner will be the agreed-upon proxy. Also, not all hospital facilities may allow the partner
visitation privileges without this document. The client should execute an authorization containing language
sufficient to satisfy the Health Insurance Portability and Accountability Act of 1996,9 to allow the agent
access to protected medical information.
Disposition of Last Remains.
Colorado’s Disposition of Last Remains Act10 allows a declarant to designate the person who may
direct the disposition of the declarant’s last remains, and who may direct the ceremonial arrangements. This
recent addition to the law can be very important to persons in a non-traditional relationship. A partner in a
non-traditional relationship has no statutory authority to act regarding the disposition of a deceased partner’s
body unless that partner is designated in a disposition of last remains form or has been nominated as personal
representative in the deceased partner’s Will. Therefore, it is imperative that every couple in a non-traditional
relationship either nominate their partner as personal representative of their estate and/or execute a
declaration of last remains naming their partner as their agent with respect to the remains.
******SAVE THE DATE******
Don’t miss these upcoming
CBA-CLE programs!
Estate Planning and Current Issues
in Family LLCs and Limited Partnerships
March 11, 2005, Denver
Hot Topics in Guardianship and
Conservatorship
April 7, 2005, Denver
Estate Planning Retreat
June 9-12, Telluride, CO
For more information, please call CBA-CLE at
303-860-0608 (toll free 888-860-2531)
or visit our website at www.cobar.org/cle
Financial Power of Attorney
This may be the most
important
estate
planning
document a person in a nontraditional relationship can have.
That is because there are no
statutory default rules in place
that allow a partner and the
family
members
of
an
incapacitated partner to agree
who can act with respect to the
incapacitated partner’s assets.
The
authors
believe
this
document is imperative for all
clients in a non-traditional
relationship. The document is
also important to use to nominate
the partner as conservator in the
event a conservatorship is needed
in the future. The client should
execute
an
authorization
containing language sufficient to
satisfy the Health Insurance
Portability and Accountability
(Continued on page 12)
Council Notes — March 2005
12
(Continued from page 11)
Act of 1996,11 to allow the agent access to protected medical information in the event a conservatorship is
needed.
Domestic Partner or Living Together Agreement
The clients should be advised about the benefits of entering into a domestic partner or living
together agreement to define their rights and obligations regarding property and expenses during the
relationship and also in the event the relationship ends. Divorce law does not apply to these couples and
there are no dissolution statutes or rules to guide them to resolution. The practitioner may want to follow the
applicable provisions of the Colorado Marital Agreement Act12 in deciding what issues to include in the
agreement. The agreement can also enable the parties to maintain privacy and should also help those in a
non-traditional relationship resolve any disputes without the need for litigation. It may be helpful to include a
provision to require alternative dispute resolution. The clients may also choose to include a provision that the
arbitrator or mediator shall apply the Colorado dissolution statutes to resolve any property, parenting time or
child support issues the parties are not able to resolve themselves. Note: some practitioners insist that each
partner have separate legal counsel to further protect the enforceability of the agreement.
Note From the Authors
In the next two issues of Council Notes, we will discuss additional topics pertaining to estate planning
for non-traditional couples, including: Real Property and Ownership Issues; and Issues Pertaining to
Children.
Elizabeth (“Beth”) Bryant, a former commercial banker with a degree in finance, practices in Denver
in the areas of estate planning, probate, business law and real estate. She received her law degree from the
University of Denver College of Law in 1990. Ms. Bryant is a frequent presenter on the topic of estate
planning for non-traditional families. She is also a member of several local bar associations, estate planning
councils and other organizations, including serving on the Board of Trustees of the Women’s Foundation of
Colorado.
Erica Johnson is an Associate in the law firm of Ambler & Keenan, LLC. She is a Colorado native
and received her law degree from the University of Denver College of Law. Ms. Johnson’s practice
emphasizes estate planning and probate. She is a member of several local bar associations, estate planning
councils and other organizations, including serving on the Board of Directors of the Women’s Estate
Planning Council.
1
C.R.S. § 19-4-101, et seq.
2
In Re Custody of C.C.R.S., 872 P.2d 1337 (Colo. App. 1993).
3
C.R.S. § 15-12-203.
CBA Member Directory:
4
C.R.S. § 15-11-517.
5
People v. Lucero, 747 P. 2d 660 (Colo. 1988).
6
Den. Rev. Mun. Code 28-200.
7
C.R.S. § 15-11-804.
8
C.R.S. § 15-18.5-101 et seq.
9
42 U.S.C. § 1320d-1320d-8; 45 CFR Parts 160-164.
The CBA maintains an on-line Member
Directory.
The Directory contains
information about CBA Members,
including contact information and areas
of practice. Go to the CBA webpage at
www.cobar.org and click on “Find a
Lawyer” to view your listing and
making any appropriate updates.
10
C.R.S. § 15-19-101 et seq.
11
See supra, note 9.
12
C.R.S. § 14-2-301 et seq.
Council Notes — March 2005
PUBLICATIONS
NOW
AVAILABLE AT
CBA-CLE:
Colorado Handbook of
Elder Law,
2004 Supplement
Susan Fox Buchanan, Esq. and D.
Wayne Stewart, Esq., Managing
Editors
$159 CBA members
$185 Non-members
(includes 2004 supplement)
2004 supplement only:
$49 CBA members
$65 Non-members
Guardianship &
Conservatorship: A
Handbook
(ABA)
Scott K. Summers
$59 CBA members
$75 Non-members
HIPAA: A Practical Guide to
the Privacy and Security of
Health Data
(ABA)
June M. Sullivan
$65 CBA members
$79 Non-members
Third Party and Self-Created
Trusts
(ABA)
Clifton B. Kruse, Jr.
$99 CBA members
$119 Non-members
13
TRUST & ESTATE SECTION
Jennifer M. Spitz
Council Notes Editor
COUNCIL MEMBERS
Section Chair ..................................................................Kevin Millard
Past Section Chair ..................................................... Mark D. Masters
Vice Chair .............................................................Barbara A. Dalvano
Secretary / Treasurer ....................................................... Michael Stiff
Council Member 2nd Year .......................................M. Anthony Vaida
Council Member 2nd Year ............................................. Spencer Crona
Council Member 2nd Year .......................................Walter M. Kelly II
Council Member 1st Year ..........................................Gordon Williams
Council Member 1st Year .......................................... Shelly D. Merritt
Council Member 1st Year ...........................................Peter W. Bullard
SECTION COMMITTEE CHAIRS
Board of Governors Rep ........................................ Robert L. Steenrod
CLE Publications....................................................... Mark D. Masters
Colorado Lawyer Editors ................. David Kirch & E. Melissa Sugar
Colorado Estate Planning Handbook ..........................David K. Johns,
..........................................................Constance Wood & Julia McVey
Community & Civic Affairs...................................... E. Melissa Sugar
Continuing Legal Education..................................Barbara A. Dalvano
Elder Law Liaison ..................................................... E. Melissa Sugar
Green Book ..................................................................David K. Johns
Internet Editor ............................................................ Dennis Whitmer
Joint Section Meetings ............................................Walter M. Kelly II
Legislative Liaisons............... Jennifer M. Spitz & Robert L. Steenrod
Local Bar Associations Liaison...............................M. Anthony Vaida
Media Liaison............................................................ Mark D. Masters
Orange Book Forms ...................Dennis Whitmer & Connie T. Eyster
Real Estate Liaison......................................................... Bruce Deacon
Rules & Forms ............................................................ Michael Holder
Statutory Revisions ........................ Merry Balson & Constance Wood
Tax Liaison................................................................. Rachel R. James
Technology Committee ...................................... Eugene P. Zuspann II
The Trust & Estate Council and committees normally meet on the
third Thursday of each month at the offices of the CBA. All Trust &
Estate Section members are invited and encouraged to attend any of
the meetings. Contact committee chairs for further information.
For information about current activities visit the CBA website at:
www.cobar.org and click on the Trust & Estate Section
SUPER THURSDAY SCHEDULE
ORANGE BOOK COMMITTEE
9:00 a.m. – 10:30 a.m.
Small Classroom, 3rd Fl
ELDER LAW SECTION
9:00 a.m. – 11:00 a.m.
Executive Conference Rm, 9th Fl
UNIFORM TRUST CODE
10:00 a.m. – 11:30 a.m.
Terrace Conference Rm, 9th Fl
UNIFORM DISCLAIMER OF
PROPERTY INTEREST
10:45 a.m. – 1:00 p.m.
Capitol Conference Rm, 9th Fl
COMMUNITY AND CIVIC
AFFAIRS
11:00 a.m. – 12:00 p.m.
Executive Conference Rm, 9th Fl
RULE AGAINST
PERPETUITIES
11:00 a.m. – 12:30 p.m.
Small Classroom, 3rd Fl
UNIFORM ESTATE TAX
APPORTIONMENT ACT
11:00 a.m. – 12:30 p.m.
Small Classroom, 3rd Fl
RULES AND FORMS
12:00 p.m. – 1:30 p.m.
Executive Conference Rm, 9th Fl
CLE
12:30 p.m. – 1:30 p.m.
Terrace Conference Rm, 9th Fl
STATUTORY REVISIONS
1:30 p.m. – 3:15 p.m.
Executive Conference Rm, 9th Fl
TRUST AND ESTATE
SECTION COUNCIL
3:15 p.m. – 5:00 p.m.
Executive Conference Rm, 9th Fl
Check the Trust and Estate
Section’s page on the CBA website
for up-to-date schedules:
www.cobar.org
THE COLORADO BAR ASSOCIATION
1900 GRANT ST STE 950
DENVER CO 80203-4303
Non-Profit Org.
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PAID
Permit No. 66
Denver, Colo.
COUNCIL NOTES