Informal probate in Colorado is controlled by Article 12 (Probate of Wills and Administration) of the Colorado Probate Code, Colorado Revised Statutes Section 15, but being familiar with the definitions contained in Article 10 (General) and the provisions of Article 11 (Intestate Succession and Wills) and Article 15 (Nonprobate Transfers on Death) will be helpful. Colorado Revised Statutes can be found at www.michie.com/colorado/. You can also find helpful forms at the Colorado Court Judicial Website www.courts.state.co.us, using the self-help button. Depending on the situation, the size of the estate, ability to pay for legal assistance, whether time is a concern, whether family members will cooperate, familiarity with on-line forms and how much risk a person is willing to take, a informal probate can be accomplished without an attorney. However, for most people, the assistance and advice of an experienced probate attorney is highly recommended.
Must we always probate an estate?
We need to determine if a decedent's estate needs a probate in the first place. If the deceased only had personal property worth less than $50,000 and no real property, we may not need to probate the estate. We can use a Collection of Personal Property by Affidavit to transfer the assets to the heirs or beneficiaries. However, even if you meet these requirements, under certain situations a probate maybe recommended. Also, even if we decide not to probate a Will, a person Last Will and Testament should always be lodged with the District Court in the county where the deceased resided within ten (10) days of death.
Normally, joint bank accounts, joint-tenancy property, life insurance, annuities, retirement and 401(K) plans that name a living beneficiary are not part of the probate estate and are not "counted" towards the $50,000 limitation. However, if the beneficiary is a minor or under a legal disability, we may need to set up a conservatorship or a restricted account.
What if there was no Will?
Unfortunately, many people die without having a valid Will. If you die without a Will, you are said to have died, " intestate", that is, subject to the laws of dissent and distribution of the State of Colorado. Many people wrongly believe that their property automatically goes to the State of Colorado. That is rarely the case. A decedent's property only "escheats" to the State, if the decedent has no heirs whatsoever. If an intestate decedent is married with children, his property goes to his spouse and children; if married with no children but living parents, then most to spouse but some to the parents; and, if married but all children are children of the marriage and spouse has no other children, then all the spouse. If the intestate decedent is not married but has kids, everything to the kids; if no children, then the parents, then brother and sisters, then uncles and aunts, then cousins, etc. You can still have a informal probate without a Will but it can require more time.
How do we get started?
You would need to file an Application for Informal Probate of Will and Informal Appointment of Personal Representative, or an Application for Informal Appointment of Personal Representative, depending on whether there is a Will. In Colorado the person "in charge of the estate, is called the Personal Representative, in other states he/she is called the Executor or Administrator. The filing fee is $164.00. You will need to also file a copy of the death certificate and the original Will, if there is a Will. If there is no Will you need to file signed Renunciation and/or Nomination of Personal Representative by all other family members that have equal standing to seek appointment as Personal Representative. You should also file your Acceptance of Appointment, the proposed Order and proposed Letters at this time. If you reside outside of Colorado you need to file an Irrevocable Power of Attorney designating the Clerk of the Court to act as your agent of service of process.
What do I do if the Court appoints me as Personal Representative?
You are required to file and send a copy of the Information of Appointment to all interested parties within 30 days of appointment. This let them know that you have opened probate and have been appointed as Personal Representative. If the decedent died within a year of opening the probate you should publish a Notice to Creditors in a newspaper in the county where the decedent resided and send a written notice to any known creditor. Creditors have 4 months from date of the notices, or one year from date of death, whichever is earlier to submit a claim. You must also prepare an Inventory of the estate and send a copy to any interest persons who request it. Of course, you should contact the decedent's family and his/her employer; contact the Social Security Administration and the Veterans Administration, if he/she was a veteran; secure the Decedent's home and contents, change the mail, check on phone message and emails; and, make claim on any insurance, retirement plan and annuities.
How do I administer the Estate?
You as Personal Representative have a fiduciary responsibility to the creditors and beneficiaries of the estate so you need to document everything that you do and care for estate property has a reasonably prudent person would care for their own property. Failure to take proper care can subject you to liability. You should begin by marshalling the assets estate, making a budget, paying the bills you need to pay immediately, consider obtaining professional appraisals for the real estate and personal property, arranging for the distribution and/or disposition of the personal property, putting the house on the market or for lease, and transferring the bank accounts into an estate account. You will need to file for Employer Identification Number (EIN) on IRS form SS4 to obtain an estate account. You will also need to provide your bank with a certified copy of the Letters of Administration from the Court. If the Decedent had a business or managed income property much more will be required.
How do I make distributions to the heirs?
First you need to make sure you know who the heirs are and what each person is legally entitled to receive. If there is a dispute, you may have to request a Court hearing to make a determination. You must pay the creditors before you make distribution to beneficiaries. You are required to distribute specific requests, i.e. my TV to Aunt Betty or $100 to Cousin George before distributing general or residuary bequests. The personal property that was not specifically designated in the Will, can be divided up and given to heirs but a cash value should be placed on all items so that all heirs of the same class are treated equally. If there are still remaining personal items, you could sell or donate them but be sure to get a receipts. Stock can be divided and given "in kind", i.e. each heir gets 2 shares of GE stock; or, sold and the proceeds divided. Real estate can also be divided in kind but most of the time it is sold and proceeds divided. Always get receipts for any distribution.
How do I close the Estate?
Once you have gathered all the assets; paid the legitimate bills, including the taxes; and made distribution to the heirs, you are ready to close the estate. Even if you had a formal opening of an estate you can do an informal closing and vice versa. You may want to do a formal closing if there were problems with creditors, a dispute with heirs, or other situations that you want to limit your liability after closing. If you formally close the estate, the creditors and heirs typically only have 45 days to appeal. However, formal closing requires a court hearing and a great deal more paperwork and time. You can close an estate informally six months after appointment or one year from date of death of the Decedent whichever occurs first. An informal closing requires that you file a Statement of Personal Representative Closing the Estate. You should send a copy to all creditors and interested persons. If no claims are made after one year of appointment, you are discharged.