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Wills & Wellness Estate Planning

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Can You Inherit Your Parents’ Debt?

There’s a lot to sort through after the death of a parent – photos, heirlooms, documents. But what about outstanding debt? In most situations when a person dies the burden of debts falls on the estate (not the heirs personally), but the debt can eat into an inheritance and heirs are known to make missteps in distributing assets without settling debt first. However, settling certain types of debt could become your personal responsibility. Which kinds of debt? Let’s run through them. TAX DEBT Taxes still apply beyond the grave. The estate must pay any property or income taxes, which you need to sort out before divvying up the inheritance. If you don’t it can come back to haunt you. For example, if an heir tries to sell their parent’s home before a tax debt is paid, the IRS can place a lien on the property to settle the debt. CREDIT CARD DEBT If you’re a cosigner on a parent’s card, all associated credit card charges will fall to you. Even if you weren’t a cosigner, debt collectors might still hassle you to collect the outstanding money from the estate (but see below about bill collectors). If the estate has the money those debts must be paid by the estate; if the estate doesn’t have the money those debts will most likely die with the debtor. Be wary of bill collectors, who are known to use aggressive tactics so do the following to minimize the problems:

After a death, alert all the relevant credit card companies that the cardholder is deceased; send them a certified copy of the death certificate (or a faxed/scanned copy if they allow it since death certificate costs can add up).

In most states, this should stop any interest from accruing while the executor settles the estate.

If family members receive harassing phone calls from bill collectors during this process, it’s good to know your rights. Some collectors will say anything to get paid, and some even claim that a spouse or sibling is a cosigner on an account when they’re not. Always ask for relevant paperwork to back up their claims and direct them to speak with the Executor, who’s currently settling the estate.

If things get heated, always remember: If you’re not a cosigner for the card, this isn’t your debt and you don’t have to take any abuse.

Don’t Get Rattled: Credit card companies hand these debts off to other companies to collect and their bark is often much worse than their bite. It doesn’t make it less annoying but at no point should you use your own money to pay off debts that aren’t yours no matter what they tell you. MEDICAL DEBT Was your parent covered by Medicaid? Then the state where the death occurred can attempt to recover payments by placing a lien on your parent’s house or other assets, but there’s a lengthy list of things it cannot do while attempting to collect that debt (a.k.a. “estate recovery”):

It can’t ask you to use your own funds to foot the Medicaid bill.

It can’t go after a surviving spouse.

It can’t collect if you or another sibling lived in your parent’s home at least two years prior to his/her death and personally provided care that postponed admission into a nursing home.

If your parent wasn’t on Medicaid and left hospital or doctor bills behind, the estate is responsible for those like any other debt. However, this is when you have to watch out for “filial responsibility” statutes, which according to MarketWatch “can be traced back to colonial times and (in theory) impose a duty on adult children to support their impoverished parents.” It basically forces adult children to pay for a parent’s lingering medical debt when the estate simply can’t. More than half the states in this country have these laws, but rarely enforce them. However, when it comes to collecting debts anything is possible. MORTGAGE DEBT This can be a tricky one. If your parent still has a mortgage at the time of death, most of the time the estate won’t have to pay it in full immediately – but the estate needs to continue making payments until the property is transferred to another person or sold. If you’re saddled with a mortgage that’s worth more than the actual property (“underwater”), you can ask the bank for a short sale. Should they say no, you can ask to foreclose instead. But be warned: Banks can pursue the estate for the difference between the sales price and the money still on the loan in the event of foreclosure. You only have to worry about a foreclosure affecting your bank account and credit score if your name is on the mortgage. Again, if you didn’t sign or cosign for the loan then it’s not your problem. If your parent had a reverse mortgage, payment is due on those normally within six months, and it’s best to settle them ASAP. Should your parent’s mortgage become too much of a headache, you can always disclaim or refuse your inheritance. This passes the house off the person who would’ve gotten it if you were no longer alive. ONE MORE THING ABOUT BILL …
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The Hidden Importance of Beneficiary Designations

You may think their estate plan is complete just because you’ve signed a will or trust. Not true!

In every single case, if your beneficiary designations are not reviewed when you sign a will or trust, your estate plan likely will not work out as you think.

Here’s what I mean: You probably have retirement accounts or life insurance policies or both. Whether you have an employer sponsored retirement account, your own IRA, a life insurance policy through work, or an individual stand-alone life insurance policy – all of these types of assets have one thing in common: BENEFICIARY DESIGNATIONS. When you opened these accounts, you named beneficiaries as part of the process. But time has passed since then. Maybe you were single when you opened the account and now you’re married, or maybe you didn’t have children when you opened the account and now you have children. Maybe you named your now-ex-spouse as a beneficiary but you’ve since divorced, or you named a minor child as the beneficiary, or you named a sibling as the beneficiary with the verbal promise they’ll use the money to support your children. Whatever the case, your beneficiary designations are out-of-date by the time you sign a will or trust.

Why does this matter? Beneficiary designations trump a will or trust. Any asset with a named beneficiary pays out to the named beneficiary regardless of what your will or trust says.

We’ve seen a life insurance policy paid out to the ex-girlfriend of someone who passed away and who left a surviving spouse and children. Sadly, the deceased person’s surviving wife and children had no right whatsoever to the life insurance policies even though his estate plan said “I leave everything to my surviving spouse and children” – because the beneficiary designation to the ex-girlfriend trumped his estate plan. We’ve also seen a life insurance policy with a minor child named as beneficiary, throwing the surviving family members into the probate court system where a judge is deciding who is in charge of the life insurance proceeds until the child turns 18. Everything filed in the probate court is public, exposing your and your child’s private information to solicitors, and then you have a young adult who just turned 18 in charge of a very large sum with no more mentorship or oversight on how to use the money responsibly. The good news is that you can update beneficiary designations at any time. This is the hidden danger of do-it-yourself estate plans – a computer program is not going to review your beneficiary designations or even tell you it’s important. If your attorney is not asking you about beneficiary designations as part of the estate planning process, you might as well do a do-it-yourself estate plan because in either case, your estate plan will very likely not play out as intended since beneficiary designations trump a will. The bottom line: A beneficiary designation is an incredibly powerful tool, so it is imperative that you pay very close attention to them and make sure to review them when you are signing a will or trust. So, how should you name your beneficiaries? Here’s your typical “attorney answer” – it depends on your specific circumstances! At Wills & Wellness, we take a holistic and comprehensive approach to your estate planning and we want to ensure your beneficiary designations achieve what you want them to in light of your family, your assets, and your goals. The last thing we want is for the estate plan you worked hard to put in place to be trumped by something you weren’t even aware of. Your Wills & Wellness Estate Planning Attorney will always review your beneficiary designations as part of your planning to ensure your entire estate plan is harmonious and will achieve your ultimate wishes at the end of the day.

The following article The Hidden Importance of Beneficiary Designations See more on: Wills & Wellnes, Denver, CO
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Who Plans Their Own Funeral?

Funeral Planning Workshop Wed, Oct 26 at 6:00pm

Free admission. Light refreshments and babysitting will be provided.


Few of us are prepared for the death of someone we love. Those left behind struggle with many difficult questions: What type of funeral service would my loved one want? What arrangements can our family afford? The purpose of a Pre-Arranged Funeral Plan is to help with these important decisions.

But I don’t need a funeral. When you’re dead, you’re dead.

A funeral or memorial services has very little to do with the person who died. It’s for the people they leave behind. Loved ones benefit by meeting the deep human need to mourn surrounded by their family and friends.

But my wishes are in my Will.

On the day of the death, loved ones go to the funeral home, not the safe deposit box. By having everything in place at the mortuary, loved ones are spared the burden of making the plans.

But my kids know what I want.

On the day of a death, people are not in their right minds. Even if they know what you want, they might not be able to think at that time.

I have life insurance to pay for my funeral.

Most people maintain life insurance to cover the risk of their death at a young age. As they get older, term insurance becomes prohibitively expensive and people discontinue it. Then their loved ones are left to pay for it.

Medical care is so good, death is optional.

It’s very hard for us to recognize that we’re all mortal. We never know when our death will come, just that it will.

Who Plans Their Own Funeral? was originally published on
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Family History and DNA Testing

Introduction to Genealogy Workshop Tues, Aug 23 at 6:00pm

Free admission. Light refreshments and babysitting will be provided. We will cover topics such as DNA testing, genealogy mapping, family history resources, and more!


Have you seen the popular TV shows Who Do You Think You Are, Genealogy Roadshow or Long Lost Family, where individuals connect with their ancestral roots or biological families? It’s no surprise that the hobby of genealogy has dramatically increased in popularity over the last decade. Did you know that beyond an interesting hobby, knowing about one’s family history has been proven to be a powerful tool to help children cope in today’s world? In an Emory University study published in the Journal of Family Life, it was documented, “Children show higher levels of emotional well-being if they know stories about relatives who came before them…[because] family stories provide a sense of identity through time, and help children understand who they are in the world.”

“Children show higher levels of emotional well-being if they know stories about relatives who came before them…[because] family stories provide a sense of identity through time, and help children understand who they are in the world.”

Many people have the desire to connect with their roots and to leave a family legacy for the future generations, but they aren’t sure where to start. Maybe they’ve been told family stories, but the details are a bit fuzzy and they would benefit from some fact-checking. Or maybe their parents and grandparent were tight-lipped about the past, so they really know very little and would like to fill in the gaps. These individuals want to take the scattered bits and pieces of their family’s history and put them into a cohesive form that can be shared and preserved for the future. In the not-to-distant past, family history research required trips to courthouses or libraries near and far to browse through dusty, forgotten records, or crank reels of microfilm in hopes of finding a shred of evidence about the family. Now historical records are being digitized at a rapid rate with online availability at websites like or And to top things off, it’s now easy to share stories and historic photos via social media or our smartphone apps. Modern technology and science are also making family connections possible with DNA testing in the fast-growing field of genetic genealogy. Often decades-old brick walls that cannot be solved with traditional research alone are being toppled by the submission of a saliva sample in a test tube. The possibility of connecting with genetic cousins or learning more about one’s ethnic roots has attracted nearly 4 million people to DNA test in just the last 5 years. Have you thought about what your DNA might tell you? Getting started with family history research can be fun and addicting! There are many tools and resources online that the search can literally begin in your armchair in your pajamas. Having a basic foundation in the knowledge and methods to get started will help maximize your success in discovering new information about your family. Do you have a famous (or infamous) character somewhere in your family tree? Do you know the stories of your heritage, culture and traditions? Would you like to put names to the faces in that old album of unidentified photos? Do you want to connect with cousins with whom you share the DNA of your ancestors? It’s all about discovering, sharing and celebrating the lives of those who came before us, who made us uniquely who we are today. Wills & Wellness Estate Planning will be hosting a special Introduction to Genealogy program by professional genealogist and national speaker Deena Coutant. Deena will inspire you to get started with your own personal journey of discovery and will guide you down the path of genealogical success. Come learn how to incorporate your family history, DNA, photos and stories into something special to be preserved for future generations. DNA test kits will be available for purchase at the end of the class. Free admission. Light refreshments and babysitting will be provided. Please RSVP here -

The following blog post Family History and DNA Testing is courtesy of
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7 Must-Do’s Before Your Summer Vacation

The summer season is here! And that means travel and vacations are high on everyone's list. One thing that might not make it to a typical traveler's to-do list is estate planning—but it couldn't be more important as you prepare to enjoy the sandy beach or the Rocky Mountains. Americans spend more time planning their vacation each year than planning their estate. Knowing what would happen to your family if something happened to you is critical for travel with peace of mind. Before heading off on your summer vacation, check a few estate planning items off the list first: Establish guardianship for minor children. If you have minor children, there is never a good excuse to neglect this all-important step: choosing a guardian for your children. Give your children's caretaker the legal short-term guardianship document needed to ensure they can make decisions for your children in case of an emergency. Also lay out the plan for long-term guardianship if you aren't able to raise your children. Review or update your incapacity documents. Clarity in a legal document about what exactly happens in a medical emergency—who makes medical decisions for you, who your care providers can speak with, and what you want in an end-of-life scenario—takes this heavy burden off family members. Supplement these documents with an emergency wallet card to ensure your plan's wheels are rolling as quickly as possible. Organize your legacy drawer. Be sure you have an organized file of all your account statements and your full estate plan before you go. Also include a full list of usernames and passwords to your online accounts. And be sure to tell your family where they can locate the file if and when it becomes necessary. Complete an estate plan if you don't have one. If you've been putting it off, now is the time to complete your estate plan! Ensure your loved ones know exactly what you'd want them to do and that your insights, values, stories, and experiences aren't lost. Plus, without an estate plan, any children 18 and over will have full control over their share at 18 years old—that would be like winning the lottery but not in a good way! Update an existing estate plan. Has something changed in your life since you last updated your estate plan—a birth, death, marriage, divorce, different job? Each of these live events triggers the need to update your estate plan before you go out of town. Review beneficiaries. Beneficiaries of your retirement accounts, life insurance, and other assets should be reviewed frequently to ensure the proper beneficiaries are named. If you have minor children, it is never advised to name your children outright as beneficiaries; instead you should set up a trust and name the trust as beneficiary so your assets can pass without court oversight. Review or update insurance. Does your life insurance coverage still meet your family's needs? If not, it is time to update your insurance benefits before you hit the road.

7 Must-Do’s Before Your Summer Vacation is available on
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