What is an estate?
An estate consists of the total of all real and personal property a person owns at their death. People often refer to the probate estate or non-probate estate. Not all of a person’s property is automatically subject to the probate process upon their death. Many assets are non-probate assets, and transfer automatically to another person upon death as opposed to according to a will or trust. Examples of these non-probate assets include jointly titled property, property titled to a revocable trust, life insurance death benefits and payable on death accounts.
What is probate?
Probate is the court procedure by which a will is proved to be valid or invalid. Probate is also the court procedure by which the probate assets are collected, valued and distributed, and the process by which the decedent’s valid debts are paid (also known as “estate administration.”)
What if someone dies without a will?
If someone dies without a will, he or she has died “intestate.” There are laws that tell us what happens to a person’s estate if that person died without a will. Contrary to popular belief, if someone dies without a will, that person’s estate does not automatically go to the state. Rather, under current Colorado law, if a person dies intestate, that person’s estate will be disposed of as follows:
If a person dies intestate with a spouse, that surviving spouse will automatically receive a portion of the estate. How much the surviving spouse receives depends upon factors such as common children between the spouses, children who are not common between the spouses, and the ages of those children.
If a person dies intestate without a spouse, that person’s estate will be disposed of in the following priority:
- Decedent’s descendants (children, grandchildren, etc.)
- Living parents or the surviving parent
- Siblings, nieces and nephews, etc.
- Surviving grandparents
- Aunts, uncles, cousins, etc.
- Children who were born to the decedent but adopted away
- Birth parents who adopted the decedent away
- State of Colorado
What is a Personal Representative?
A Personal Representative is the person who is appointed by the court to administer an estate. A personal representative must be over the age of twenty-one (21). Most wills state who should be appointed as personal representative. If a person dies without a will, or their will does not state who should be the personal representative, the priority for who will be appointed is:
- The surviving spouse who is listed in the person’s will
- Other people who are listed in the person’s will
- The surviving spouse who is not listed in the person’s will, or
- 45 days after death, any creditor.
If you don’t have a spouse, and you have a specific person you want to be your personal representative, it is imperative that you nominate that person in your will, or your creditors and other heirs will have priority to be your personal representative.
Will the court process require the personal representative to appear in court?
The entire probate process may take place either formally or informally. Formal probate refers to actual court proceedings where a judge or magistrate makes a formal determination on each issue that needs to be decided. Here are some examples of when formal probate may be needed:
- When there are questions about the validity of the will
- When the heirs of the decedent are unknown or there are disputes about who the heirs are
- When a creditor makes a claim against the estate and the validity of that claim is being questioned
More often than not, however, probate can be conducted using an informal procedure. In an informal probate, once the personal representative has been appointed by the court, that person can act to collect assets, pay expenses, distribute property and close the estate all without the need for court permission before acting.
Will the entire process be slowed down by having to wait for court approval before the Personal Representative can act?
Probate proceedings also can be supervised or unsupervised. Supervised probate proceedings are those in which the court specifically orders that the personal representative perform certain acts. The court watches over the proceedings and the personal representative must gain court permission before taking certain actions. However, most probate estates in Colorado are conducted in an unsupervised manner. Unsupervised probate allows the personal representative to carry out his or her duties without having to report to the court in most instances.
I’ve heard that I should avoid probate at all costs. Is this true?
Every state has its own laws that establish the probate system. In many states, the probate process is cumbersome and expensive. In those states, people go to great lengths to avoid having to participate in the probate process. However, Colorado’s probate system is one of the country’s most efficient and cost effective. During the years, changes to the Colorado Probate Code have led to a dramatic decrease in the time and expense necessary to bring an estate through the entire probate process. Therefore, the need to avoid probate in Colorado simply is not that great in most instances.
What if the person’s estate is very small?
In the event that the net value of a probate estate is less than $50,000 and there is no real property owned by the decedent, then the person legally entitled to the assets of the estate may use the Small Estate Affidavit to obtain control and title to estate assets. By doing this, probate is avoided completely.
A Small Estate Affidavit can be used by a person who has the legal right to receive the decedent’s tangible or intangible personal property. There is no requirement for any court proceedings when using the Small Estate Affidavit. The person or institution, such as a bank, that relies upon the Small Estate Affidavit for transferring property to the claiming party will not be held liable later if it is discovered that the Small Estate Affidavit contained statements that were false.
Caution should be taken when using a Small Estate Affidavit. Creditors may have certain rights to the decedent’s property. If that property has been given to someone using the Small Estate Affidavit, the person who signed the affidavit may be personally liable to the creditor for the debt. In other words, if the person administering the estate with the Small Estate Affidavit does it incorrectly, that person is going to be held financially responsible.
Additionally, if the Small Estate Affidavit is used and additional assets are later discovered that bring the estate value to over $50,000, a probate proceeding will need to be started. Again, this can create a problem if assets have been distributed incorrectly or if creditors have been ignored. Due to the possibility of liability attaching to the person signing the Small Estate Affidavit, a qualified legal professional should be consulted prior to the Small Estate Affidavit being used.
Will my loved ones be able to get into my safe deposit box after I die?
Yes. Even before a personal representative has been appointed, the box is to be made available to a person who is reasonably believed to be an heir at law of the decedent, or the agent or attorney of such a person, but only for the purpose of determining whether the box contains the will of a decedent or burial instructions of the decedent. If a will is found, the institution owning the safe deposit box must send the will to the clerk of the court in the county where the person lived at the time of their death.
Documents for probate planning: