Probate in Colorado
Will my estate have to go through probate?
People sometimes ask that as though it were an obstacle course. In truth, probate -- the process of formally distributing a person's possessions after death -- has been enormously simplified by the Uniform Probate Code. Over 90 percent of estates in Colorado are not court supervised. Much less attorney time is involved. Usually families do most routine estate administration, such as paying bills and selling or distributing personal possessions.
When is probate required?
When a person dies, some of their assets will automatically pass by law to certain people. These are called "non -probate" assets. For instance, if a husband and wife have a joint account and the wife dies, the husband gets the money in the account automatically.
The other major category of non-probate assets are life insurance or retirement accounts, where someone specific is named as the beneficiary.
All other assets are called "probate assets." Probate assets do not pass automatically and must be disposed of under the probate system.
What are "probate assets?"
Household and personal items, bank accounts, stocks, automobiles, real estate -- generally anything that is solely in the decedent's name or doesn't have a title.
If an estate has "probate assets," what must be done to pass those assets on to heirs?
After all non-probate assets are determined, the remaining probate assets are generally administered in one of three ways:
- By Affidavit: If the amount of probate assets in an estate is less than $27,000, an heir can fill out an affidavit (available from Bradford Publishing or an attorney's office). The person holding the assets would then release the assets to the heir without further action. (With the help of an attorney, it may be possible to avoid court involvement by structuring your estate so that it contains less than $27,000 of probate assets.)
- Informally: The vast majority of estates in are administered informally. Informal administration means the estate is not court-supervised. An attorney can have a limited role in these proceedings and a client should discuss with their attorney the amount of help they will need.
Administration of an estate is commenced by filing a number of forms with the appropriate district court. The forms are available from Bradford Publishing or an attorney's office. While the forms are not very complicated, there are a number of traps for the unwary and it may be best to get an attorney's help.
Once the estate is up and running in informal administration, the personal representative (administrator) is free to pay the bills and taxes as they see fit, and then distribute the probate assets either according to the instructions in the will or under the laws of intestacy if the decedent died without a will.
The estate administration can take as little as six months, for a simple estate, and as long as several years. Most estates in Colorado are administered in seven to twelve months.
At the end, an estate may be closed informally by filing with the court a form that states the personal representative has paid all debts and taxes and delivered the property to those entitled to it. Consult with your attorney about other details on administering and closing the estate.
- Supervised: Most estates are not supervised. A supervised administration is needed when there is a dispute among the parties who have an interest in the estate. In this situation, the court has to settle the dispute and attorneys are likely to be involved the entire time.
Note that Colorado law requires a decedent's will be filed with the district court within ten days of death, even if there will be no estate administration.
Who's in charge of administering an estate?
This person is called a "personal representative" because they represent the person of the decedent. A will almost always names a personal representative. If a person doesn't have a will with these instructions, an heir or interested party can file a form asking the court to appoint them to be personal representative.
The personal representative:
- Locates and values all the assets,
- Gives notice to creditors, pays debts and taxes, and
- Distributes the balance of the estate to those entitled.
A Word About Fees
An attorney's help will usually be needed and the amount of help will depend on the complexity of the estate. Costs are reduced under Colorado law, but there are still some costs associated with handling an estate. To begin with, a court docket fee of $91 will be charged upon filing the petition or application for admission of the will to probate. A lawyer may be engaged to file court documents, prepare tax returns or transfer documents, and will normally bill these services at an hourly rate.
You can reduce some of the legal costs by doing some of the work; your attorney can help you with this.
A Word about Living Trusts
Some recent advertisements would have you believe that everyone needs a "living trust" and that it helps you "avoid probate."
First, under Colorado law, there's little need to avoid probate. Be wary of persons promoting a trust that may not meet your needs. Some consumers have been overcharged for trust documents that aren't appropriate for their circumstances and are inadequate for their estate planning needs.
If you think you've been a victim of fraud in the sale of a revocable (or "living") trust, call the Colorado Attorney General's Consumer Protection Unit, (303) 866-5189 and ask for the information on "Living Trust Scares."