Chapter 34 - § 34.2 • GENERAL

• Jurisdiction: Colorado

§ 34.2 • GENERAL

The preliminary study of the problems to be encountered in connection with final settlement should start very shortly after the issuance of letters, and, beginning with the first meeting with the family, the representative's lawyer should start to accumulate a list of the matters that ultimately will need attention before closing is in order. Each time the will is read or a conference is held with members of the family, questions will occur for which no immediate solution is required but ultimate resolution is indicated. If, as these questions arise, a note is made, which later is expanded to a fuller memorandum that is placed in a file of similar memoranda, the list of anticipated problems will be ready when the estate's lawyer is ready to consider them. Most of the tasks to be undertaken in the administration and distribution of the estate are identified in Wade, Colorado Probate System,¹ general checklists, and special probate checklists. A considerable number of the subjects in this area are not fully appreciated by the general practitioner who has administered only a few estates — most of them of moderate size — since many of the matters that will be discussed in this chapter become important only in estates of more than modest proportions. An example of how the "closing" file might be built up is as follows: when the decision is made to claim an expense of administration as a deduction on an income tax return, and there is a marital deduction devise for the spouse, whether outright or in trust, and there will be any need under the terms of the will to allocate the income of the estate during administration among the beneficiaries, there should be made a memorandum or tickler to investigate and resolve the problem that inevitably arises when a payment is made from principal for trust accounting purposes but is taken as a federal income tax deduction and not as an estate tax deduction. This action affects at least two people in different ways, and although it generally is beneficial to the estate as a whole, an adjustment should be considered in the interest of impartiality. Taking the deduction for income tax purposes makes the income tax burden less than it otherwise would be, and not taking it as an estate tax deduction makes the estate tax more than it otherwise would be, and, in the hypothetical case in view, the income tax windfall and the excessive estate tax affect different people. This problem is discussed more fully in §...