Probate is the legal process by which a court oversees the distribution of a decedent’s assets and property to their beneficiaries and heirs. The purpose of probate is to ensure the decedent’s assets and property are distributed according to their wishes or state law, depending on the validity and existence of a Last Will & Testament. The probate process also provides an avenue for creditors and beneficiaries to make claims against the estate.
How Does Probate Work in Colorado?
Before the probate process begins, each of the decedent’s assets should be identified as a probate or non-probate asset. A probate asset is a type of asset that must go through the probate process in order for the asset to be distributed to the rightful beneficiaries and heirs. Probate assets are typically owned solely by the decedent at the time of death, and do not have a clear mechanism for transferring ownership. Common examples of probate assets include real estate, including mineral interests, business interests, personal property and bank accounts. A common example of a probate asset is a real estate interest that was owned solely by the decedent at the time of their death. In that case, the ownership transfer of the real estate to the beneficiaries and heirs cannot happen without opening probate and receiving the necessary paperwork from the probate court to complete the real estate transfer. Non-probate assets are assets that are not subject to the probate process and pass directly to the designated beneficiary or joint owner upon death of the decedent. Examples of non-probate assets often include assets held in trust, life insurance policies and retirement accounts that have listed designated beneficiaries. In addition, assets that are held jointly with the right of survivorship are non-probate assets. The benefit of non-probate assets is the asset passes directly to the designated beneficiary, or a joint tenant survivor, at the death of the decedent without having to engage in the probate process. The transfer of non-probate assets does not involve the delays, legal challenges or expenses compared to a probate asset, saving the beneficiaries time and money in collecting a decedent’s assets. If there’s confusion regarding the classification of an estate asset, a licensed Colorado probate attorney can help in determining the correct estate asset classification.
What Type of Estate Doesn’t Require Probate in Colorado?
After identifying the decedent’s assets as probate or non-probate assets, it’s important to determine the value of the decedent’s probate assets. In the situation where the probate assets of a decedent do not contain real property interests and the value of the decedent’s personal property is less than $80,000 (as of 2023), it could be possible for the estate to qualify for a small estate probate. In a small estate probate, the decedent’s assets can be distributed by obtaining a small estate affidavit, which allows collection of an asset by the beneficiaries without having to engage in the probate process. A small estate probate eliminates much of the cost of the probate process, allowing beneficiaries to collect the decedent’s assets at a much lower time and money cost than engaging in the probate process.
Probate in Colorado: Testate vs. Intestate Estate Determination
In a situation where a decedent’s estate includes assets that require the probate process, an initial step is determining whether the decedent’s estate is testate or intestate. A testate estate is an estate in which the decedent left a valid Will at the time of their death. In a testate estate, the probate court will rely on the Will to distribute the assets of the decedent. The majority of Wills outline how the decedent would like their assets to be distributed after death, along with naming a Personal Representative who is responsible for carrying out the instructions of the Will and managing the distribution of the estate assets.
An intestate estate is an estate in which the decedent did not leave a valid Will at the time of their death. The assets of an intestate estate are distributed according to state laws, known as intestacy laws. The probate court appoints a person to be Personal Representative of the estate to manage the distribution of the assets according to the state’s intestacy laws.
The determination of whether an estate is testate or intestate involves locating the original Last Will & Testament of the decedent. It is extremely important to try and locate the original Will of the decedent, keeping in mind the possibility a Will may not exist for the decedent. Trying to locate the Will of a decedent can be a frustrating process since there is not a central search location for whether a decedent had executed a valid Will.
An initial search for the Will should begin in the decedent’s personal papers or safe deposit box. The decedent may have placed their Last Will & Testament with other important documents, such as deeds and insurance policies. If that is not the case, the decedent may have left their Will with their personal attorney. It is common for attorneys to store Wills for clients. It’s also possible the attorney’s office may have a copy of the decedent’s Will. In addition, a decedent may have left their Will with a bank or financial institution for safekeeping. When dealing with the decedent’s bank accounts, it may be worthwhile to ask the bank if they stored or had information regarding the location of the decedent’s Will.
In the situation where the decedent’s original Will is located, the estate will be considered testate for probate purposes. When the original will is located, the will must be lodged with the required probate court. Lodging a will with the probate court is a necessary step in allowing the court to determine if the Will is valid and should be followed in the administration of the decedent’s estate.
In the situation where the decedent’s original Will is not able to be located or the decedent did not execute a Will, the estate will be an intestate estate with the distribution of assets being controlled by state law.
How Does Probate Work in Colorado: Formal vs. Informal Probate Determination
After determining whether a decedent’s estate is classified as a testate or intestate estate, the next decision in the probate process involves deciding whether to initiate a formal or informal probate process. The majority of probate cases in Colorado use informal probate when settling an estate of a decedent. The informal probate process is a simplified process, minimizing the probate courts involvement and proceedings in the distribution of the decedent’s assets. The informal probate process is typically quicker, simpler, and less expensive than a formal probate proceeding. Using the informal probate process is encouraged in the following situations:
- There is a clear and valid Will
- Beneficiaries have limited concerns regarding the distribution the estate’s assets
- There is a clearly defined Personal Representative named in the Will
In comparison, formal probate is encouraged when there is a disagreement, or possible disagreement, regarding the distribution of the estate. Situations where formal probate may be useful include:
- Disputes and disagreements among the beneficiaries regarding the distribution of assets
- The estate is complex and requires the oversight of a court to ensure all assets are properly accounted for and distributed
- When there is a question regarding the validity of a Will, including handwritten Wills
Formal probate provides additional court oversight and administration in the distribution of the decedent’s estate compared to the informal probate process. With the increase in court overview associated with formal probate, formal probate often takes longer and is more expensive than informal probate.
The probate process can be a complex and overwhelming task. At the Law Office of Josh Krieg, we have extensive knowledge of probate laws and regulations in Colorado, Wyoming and North Dakota. We understand the importance of timely and efficient estate administration and are dedicated to helping our clients navigate the probate process. We will work closely with you to ensure that your loved one’s final wishes are honored and the assets are distributed according to all state laws and regulations. Contact our probate lawyer Fort Collins, CO today to schedule a consultation and let us help you with your probate needs.