What is Probate?
Probate is a legal term that encompasses the court process that happens when someone dies. Probate is used to appoint the Personal Representative, pay creditors, and distribute assets either according to the decedent’s Will or Colorado’s intestacy statute.
If you have been named as the Personal Representative, or Executor, in the decedent’s Will, or if the decedent did not leave a Will, it is important to first determine if a probate is required.
Is Probate Required for All Estates?
There are two main reasons an estate is required to go through probate. One, if the decedent owned any real property. Now, there are ways to avoid probate while owning real property in Colorado, but that will be discussed later. Second, if the decedent has $74,000 or more in total assets. This encompasses all financial accounts in the decedent’s individual name.
How Long is Probate?
In the state of Colorado, a probate must be open for at least six months. There are different obstacles that can prolong the probate process like if someone is contesting the Will.
How to Avoid Real Property Being Pulled into Probate
There are ways to avoid probate while owning real property in Colorado, but these must be done before the decedent died. One important thing to determine is how the decedent owned the real property.
- Someone can own property with one or more people as joint tenants. Joint tenancy includes the right of survivorship. This means that when one owner dies, that owner’s interest in the property automatically belongs to the surviving owners. For example, most married couples own their real property as joint tenants. When one spouse dies, the surviving spouse owns the property outright, without going to probate.
- Someone can own property with one or more people as tenants in common. Tenants in common does not include the right of survivorship. This means that an owner can transfer his or her interest to someone else. If the decedent owned property as tenants in common, his or her share in the property could get pulled into probate if the decedent has not properly assigned his or her interest to someone else.
- Someone can own property in severalty, which means solely. If the decedent owned the property in severalty, it is likely that the property will be pulled into probate. However, it is important to see if there was a beneficiary deed recorded on the property. If a beneficiary deed was recorded on the property, and the beneficiary is still alive, that property may not need to be pulled into probate.
There is a variety of ways that real property does not get pulled into probate but as you can see, it can become complicated quickly. That is why it is important to meet with an attorney to see if a probate is required or not.
How to Avoid Financial Assets Being Pulled into Probate
Beneficiary designations are key when it comes to estate planning. You can name a beneficiary on your account who will receive the assets upon your death. It is important to note that the beneficiaries you name on your accounts override your Estate Plan. However, if minors are named as beneficiaries, they cannot receive those assets. Rather, those assets would be held in trust at the court and the beneficiary would receive his or her share upon reaching the age of 18.
Overall, it is important that the people you have named as beneficiaries on your accounts know where the account is located.
What Happens in a Probate?
The probate process begins when the application to be appointed as Personal Representative, along with the death certificate, Will, and other documents are filed with the court. It typically takes a few weeks to receive your Letters of Administration or Letters Testamentary, which is proof that you are the Personal Representative of the estate. Once the Personal Representative is officially appointed, he or she will have to file notice to creditors of the estate through newspaper publication and direct notice, locate and value all of the decedent’s assets, pay the decedent’s final taxes, and make distributions to beneficiaries.
It is important to note that there are statutory requirements regarding notice to creditors, distributions, reimbursements, and estate expenses. It is important to meet with an attorney to understand the probate process to ensure you are lowering your risk of liability.
Do You Need to Hire an Attorney?
Colorado does not require you to hire an attorney to go through the probate process. However, there are a lot of statutory guidelines and court forms involved with probate, so it is important to meet with an attorney to understand the process in its entirety.
Schedule a Probate Advisory meeting to learn more about how one of our experienced attorneys can help you with the probate process!