Wade/Parks COLORADO LAW OF WILLS, TRUSTS, AND FIDUCIARY ADMINISTRATION FIFTH EDITION JAMES R. WADE Based on Colorado Probate Practice Manual by the late Howard E. Parks Supplemented April 2006 August 2009 October 2011 CONTINUING LEGAL EDUCATION IN COLORADO, INC. COLORADO BAR ASSOCIATION DENVER BAR ASSOCIATION 2011
COLORADO LAW OF WILLS, TRUSTS, AND FIDUCIARY ADMINISTRATION FIFTH EDITION ISBN-13: 978-1-930993-39-6 Published by: CONTINUING LEGAL EDUCATION IN COLORADO, INC. 1900 Grant Street, Suite 300 Denver, Colorado 80203 Phone: (303) 860-0608 Toll-free: (888) 860-2531 Fax: (303) 860-0624 E-mail: clebooks@cobar.org Website: www.cobar.org/cle Dawn M. McKnight, Esq. Assistant Executive Director/ Publications Director Lisa C. Travis Fischer, J.D. Publications Production Manager Marsi Buckmelter, M.S. Editor John and Lynn Cleveland Subject Index/Table of Authorities Lindex COLORADO BAR ASSOCIATION CLE CLE in Colorado, Inc. is the nonprofit educational arm of the Colorado Bar Association and the Denver Bar Association Continuing Legal Education in Colorado, Inc. (CBA-CLE) publications are intended to provide current and accurate information about the subject matter covered and are designed to help attorneys maintain their professional competence. Nothing contained in this book is legal advice or other professional advice. Readers are responsible for obtaining advice from their own lawyers or other professional. Publications are distributed with the understanding that CBA-CLE does not render any legal, accounting, or other professional service. The contents of this book do not necessarily reflect the views of the Internal Revenue Service or any other regulating governmental entity. The material in this book represents the opinions and views of the authors, and should not be construed as the views of any of the authors law firms or of Continuing Legal Education in Colorado, Inc. The proper interpretation or application of the material in the book is a matter for the considered judgment of the individual legal practitioner, and CBA-CLE disclaims all liability therefor. As with any legal textbook or other secondary authority, attorneys dealing with specific legal matters should also fully research current, primary authorities. Copyright 1998, 2004, 2006, 2009, 2011 by Continuing Legal Education in Colorado, Inc. All Rights Reserved.
PUBLISHER S NOTE We are pleased to present the 2011 Supplement to James R. Wade s phenomenal treatise, Wade/Parks Colorado Law of Wills, Trusts, and Fiduciary Administration. Mr. Wade has tirelessly contributed countless hours to this project, for which we at Colorado Bar Association CLE are grateful and appreciative. Mr. Wade s dedication to this book has made it a tremendous reference tool. We would like to thank Mr. Wade for his diligent devotion to this project, and we would also like to extend our gratitude to Barbara Cohen, who is unfailingly helpful and cheerful. They are, together, delightful and always willing to offer their time and energy to make Wade/Parks a valuable tool for Colorado practitioners. We are grateful to Steven M. Weiser, a tax attorney with the law firm of Foster Graham Milstein & Calisher, LLP, for his willingness to review and update the two tax chapters Chapter 21, Post-Mortem Estate Planning, and Chapter 26, Income Taxation of Trusts and Trust Beneficiaries in our hour of need. We strive to make this publication as up-to-date and accurate as possible. If you have any questions or comments to assist us in this task, please contact Lisa Travis Fischer, ltravisfischer@cobar.org or 303-824-5381. Thank you. Marsi Buckmelter, M.S. Editor Dawn McKnight Assistant Executive Director/ Publications Director ACKNOWLEDGMENT Production of Wade/Parks Colorado Law of Wills, Trusts, and Fiduciary Administraction, Fifth Edition, required the editors to Shepardize the citations used in the book. The research was made possible by a generous contribution from the Colorado Bar Association CLE s technology partner, LEXIS-NEXIS. HOW TO CITE THIS BOOK As the first full citation, you may cite this book as: James R. Wade, Wade/Parks Colorado Law of Wills, Trusts, and Fiduciary Administration, Fifth Ed. (CLE in Colo., Inc. Supp. 2011) (hereinafter Wade/Parks). After the first full citation, you may cite this book as: Wade/Parks, supra n., at. (10/11) iii
COLORADO BAR ASSOCIATION CLE (CBA-CLE) is the nonprofit educational arm of the Colorado and Denver bar associations. We strive to produce high-quality CLE programs and legal publications at competitive prices, with substantial member discounts. However, we are also financially independent from the bar associations and self-supporting. We receive no membership dues or other unearned revenue from the CBA or DBA. Nearly all of our income derives from program registration fees and from sales of books, audio and video homestudy courses, and course manuals. Every year, hundreds of Colorado lawyers and judges volunteer their time and expertise to help us produce these educational resources for our members. Without this generous contribution of talent, CBA-CLE could not fulfill its mission. CBA-CLE Board of Directors July 2011 to June 2012 Denver Bar Association Appointments Colorado Bar Association Appointments Richard I. Zuber Barbara Blumenthal Robert A. Holmes Baird B. Brown Michael T. Mihm E. David Griffith J. Marcus Painter Honorable Terry Ruckriegle Kristin Rozansky Deanna L. Westfall Gregory James Smith Eugene Zuspann, II Charles C. Turner CBA-CLE Staff B. Gary Abrams................................................. Executive Director Evan Brown................................. Manager of Media and Web Development Ellen Buckley, Esq..................................................... Legal Editor Lisa M. Cordova............................................... Program Coordinator Mary Dilworth.................................................. Marketing Manager Lisa C. Travis Fischer, J.D................................. Acquisitions Editor/Manager Terri L. Fonseca.................................................. Customer Service Priscilla S. Fulmer, Esq............................................. Program Attorney Susan Hoyt........................................................... Legal Editor Darlene M. Johnson................................................ Managing Editor Lori L. Krupske................................................... Finance Manager Melissa J. Lucas............................................... Publications Assistant Deb Marnocha................................................... Desktop Publisher Dawn M. McKnight, Esq................. Assistant Executive Director/Publications Director Jo McWilliams............................................ Order Fulfillment/Shipping Ryan Morris...................................... Program Coordinator/Data Specialist Kathryn Noble, Esq..................................................... Legal Editor Heidi A. Ray, Esq.................................................. Program Attorney Julie Lynn Revers............................................ Program Administrator Adrian Romero-Sosa.............................................. Technical Producer Monica Santillanes............................................... Marketing Assistant Kenneth Sudduth.................................................. Customer Service Zachary A. Willis, Esq.................................................. Legal Editor iv (10/11)
AUTHOR S NOTE TO 2011 SUPPLEMENT This supplement picks up Colorado cases reported originally in The Colorado Lawyer through calendar year 2009. It contains a new 1.13 on federal court jurisdiction in probate litigation and discusses the history and rulings of the federal courts, including the United States Supreme Court in Estate of Marshall (the Anna Nicole Smith case) with respect to the traditional probate exception to federal court diversity of citizenship jurisdiction. It also discusses federal jurisdiction based upon the so-called Rooker-Feldman Doctrine. The bulk of the other changes to the text are comments on recently enacted legislation, including: The estate administration aspects of the new designated beneficiary statute; The new Colorado Medical Treatment Decision Act and its relation to other advance directive statutes; The new provision for a valid notarized will; Changes to the intestacy statute, including changes in provisions for remote relatives and, more importantly, provision for genetic children (children of the new biology); Cost-of-living increases in the allowances and the minimum elective share amount; Statutorily authorized beneficiary deeds; The newly enacted provisions of the Uniform Probate Code, which allows reformation of wills and trusts (even if unambiguous) to carry out transferor intent; and finally, Comments on the significant agency issues resolved by the newly enacted Revised Uniform Durable Power of Attorney Act. Once again I am indebted to my colleagues at Wade Ash Woods Hill & Farley, P.C. for their support of this publication, and especially to my assistant, Barbara Cohen, for gathering the materials. A special word of thanks is due to my editors, Marsi Buckmelter and Susan Hoyt. Thanks again to Lisa Travis Fischer (and her colleagues at CLE in Colorado) for her organizational skills and support in updating the materials. Finally, my thanks go to Steven Weiser for his careful update of the tax chapters on post-mortem estate planning and income taxation of trusts and trust beneficiaries. James R. Wade Denver, Colorado October 2011 (10/11) v
James R. Wade Wade Ash Woods Hill & Farley, P.C. 360 S. Monroe St., Ste. 400 Denver, CO 80209 (303) 322-8943 www.wadeash.com jwade@wadeash.com ABOUT THE AUTHOR JAMES R. WADE, a Denver native, is a graduate of Princeton University and the Harvard Law School. He is a member of Wade Ash Woods Hill & Farley, P.C., a firm that limits its practice to estate planning, estate administration, elder law, and probate litigation. In addition to the local estate planning councils, he is a member of the American College of Trust and Estate Counsel, where he served on the Board of Regents. He is a Fellow of the International Academy of Estate and Trust Law. He served as liaison from the ABA Section on Real Property, Probate, and Trust Law to the National College of Probate Judges and was a member of the American Bar Association Commission on Legal Problems of the Elderly. A member of the American Law Institute, he served as an Advisor to the Reporter for the Restatement of Trusts third revision project, and is a member of the Editorial Board for Uniform Trust and Estate Acts. He is the author of Colorado Probate System, as well as a number of articles published in The Colorado Lawyer, Probate and Property, The Real Property, Probate, and Trust Law Journal, and Trusts and Estates Magazine. He has taught at the University of Denver College of Law, the University of Colorado Law School, and has been a visiting professor at McGeorge Law School in Sacramento, California, and at the University of Miami Graduate Program in Estate Planning. He served as Judge of the Denver Probate Court from 1977 to 1982. He is a recipient of the Treat Award for Excellence in Probate, National College of Probate Judges; and of the Richard Doyle Award of Excellence, Colorado Bar Association Continuing Legal Education. (10/11) vii