When a loved one passes away, their assets and property typically are not transferred to anyone without some sort of prior designation. This can be done via a valid will, trust, or other beneficiary designation. Regardless of whether a will, trust, or other arrangement exists, the process of appropriately handling a loved one’s estate can be complex. Brestel Bucar, Ltd has extensive experience in assisting families, executors, and trustees, in properly administering both probate and trust estates.
The probate process in Colorado is relatively straightforward, and our attorneys help every step of the way – including admitting the will to probate and having a personal representative appointed, receiving Letters Testamentary or of Administration, collecting assets, opening and closing accounts, paying or contesting claims and debts of the estate, locating beneficiaries, and eventually distributing the estate according to the will or Colorado intestacy laws.
Similarly, when the decedent’s assets are held in a trust, we assist the trustee in collecting any additional assets into the trust, managing the trust according to Colorado law and the terms of the trust, settling claims and tax obligations, and making any required distributions. Both trustees and personal representatives owe fiduciary duties to the estate, the beneficiary, and creditors. It is crucial to have competent legal advice to ensure these duties are met. Contact Brestel Bucar, Ltd to get started.
Probate Administration in Colorado
When you lose a loved one or family member, their debts must be settled and remaining assets distributed to the beneficiaries. The property to be distributed often includes real estate, stocks and bonds, bank accounts, jewelry, automobiles, furniture, and other property. The process by which the property of the deceased person (decedent) is processed, whether it is with a will (testate) or without a will (intestate), is called probate.
If you live in Colorado, it helps to learn more about probate in Colorado. The probate process ensures the decedent’s heirs, creditors, and other interested parties get their rightful share of the property (estate) left behind. Put simply, probate refers to a court-supervised process of settling a deceased person’s estate and distributing the remaining assets to beneficiaries.
The deceased person’s last will and testament provides guidelines for the distribution of the assets in question. In cases where there is no will or the will is deemed invalid, the deceased person’s estate will be distributed during the probate process according to Colorado intestacy laws.
Types of Probate
Most estates in Colorado have to go through probate unless all assets of the decedent have a payable-on-death beneficiary listed or have been put in a trust. Although the probate process has the same goal, each type of probate works a little bit differently. Colorado law now provides for three types of probate proceedings.
A small estate is defined as a collection of property worth less than $70,000 (as of 2020) and with no real property included (i.e., no houses, land, etc. that would need to legally pass to an heir by a transfer of deed). When this is the case, a Small Estate Affidavit may be used to collect the decedent’s assets with little to no court involvement.
An informal probate typically requires less time and expense than a formal probate proceeding. It involves filing certain probate forms with the court in the county where the decedent lived at the time of his or her death.
Informal probates are typically used when there’s no expectation of a will contest, or other complications. In cases where there is no will, estate administration follows a clear succession path. Colorado probate law provides details on how a decedent’s estate will be inherited if they die without a will. The personal representative handles all the tasks involved in dispersing the estate.
An informal probate procedure typically requires less time and money than a formal probate procedure.
Formal probate requires the most involvement with and attention from the probate court. A formal probate administration may be required if the decedent has a complex estate or if there’s a likelihood of someone contesting the will or the identities of the heirs.
Both informal and formal probates take a minimum of six months to complete. The heirs, beneficiaries, potential heirs, creditors, and other interested parties have certain rights in these proceedings, so it’s important the personal representative have competent legal advice and guidance.
Is probate in Colorado complicated? Typically, probate administration in Colorado is simple and straightforward. However, the procedures, documents, deadlines, and family dynamics can make it more complicated at a time of stress and grief.
The process begins when a petition or application is filed in court in the county where the deceased person resided.
The court appoints a personal representative to handle the affairs of the estate. The personal representative bears the responsibility of handling the various tasks under the court’s supervision.
The personal representative files notification either by publishing in a newspaper or mailing notices to creditors.
The personal representative must create a record of all assets and their respective values. They may have to liquidate some or all of the assets.
The personal representative files the final tax return and pays any taxes owed by the decedent or the estate.
The personal representative pays the creditors before distributing the remaining assets according to the will or by state law.
How to Avoid Probate in Colorado
People often want to avoid probate because it can be a lengthy and expensive process. The best way to do so may be to put your assets into a trust as part of your estate planning before you die.
Trusts are separate entities from their owners. As a result, beneficiaries of a trust can receive the assets after the death of the loved one with no need to go to court for approval. The testator can also determine exactly how they would like their beneficiaries to receive their inheritance; outright in one lump sum, paid out in stages, or left in adiscretionary trust fund. This decision does not need to be made with the courts oversight, and with this decision outlined in your trust, you and your beneficiaries can avoid probate court that much more.
How beneficiaries receive their inheritance can be of critical importance.Approximately 70% of families will lose their wealth by the second generation because beneficiaries may spend the money in a frenzy; buying new cars, taking exotic trips for once in a lifetime experiences, or by simply not budgeting and letting the inheritance fund drain unbeknownst to their friends, family, or even the beneficiary. This can all be avoided with the proper documentation outlining who and how beneficiaries will receive their inheritance.
Another way to avoid probate is to provide beneficiaries for certain assets, such as bank accounts, retirement accounts, and insurance policies, which are payable on death. Either way, it’s crucial to hire an attorney who has the knowledge and is experienced in the Colorado probate process to be sure everything is done correctly. Having to resolve mistakes months or even years later can be costly and time-consuming.
Even though you can avoid probate in Colorado and state law has simplified the probate process, navigating the system on your own may prove difficult. It is advisable to consult with an attorney.
For assistance with trusts, wills, and probate matters, contact our experienced attorneys at Brestel Bucar, Ltd. by dialing 303-731-4402 or by contacting us via email. Our team is dedicated to providing efficient legal assistance to help clients settle their estates with minimal expenses, time, and hassles.
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390 Interlocken Crescent Suite 350 Broomfield, CO 80021