Probate is the legal process through which an individual’s possessions and assets are distributed after death. The process is usually, but not always, overseen by the probate court and is carried out by the estate’s personal representative (also known as the executor or administrator).
Colorado has three levels of probate, including:
- Small Estates: If an estate (those with and without wills) is worth $64,000 or less and owns no real property, then the heirs may collect assets by signing a Small Estate affidavit, allowing them to avoid probate court all together.
- Informal Probate: Most estates worth more than $64,000 go through informal probate proceedings. This is the case when there is a clear, valid will, no contest over the will and a personal representative has been clearly identified. Forms are filed and approved by the court, but there is no court supervision over the distribution of the estate.
- Formal Probate: Formal probate is a court proceeding; a judge must approve actions taken by the personal representative like distributing assets or selling real estate. This is most common when there are disputes over the will.
All wills and intestate estates (an intestate estate is one for which there is no will) in the State of Colorado must be probated, which is why it’s valuable to have a working knowledge of probate law. Your understanding of probate law will help you as you make decisions regarding your estate planning, and a good place to start is by separating probate myth from fact.
Myth: My estate can avoid probate if I have a will.
Fact: Having a will might not be enough. In Colorado, if you own real estate titled only in your name and/or if the combined value of your assets is $64,000 or more, then your estate will be subject to probate even if you have a will. Only assets that do not already have a specific “transfer-upon-death” or “payable-on-death” designation – like life insurance or retirement accounts – will have to pass through probate.
Myth: The process of probating an estate takes years.
Fact: The truth is that most estates are finished with probate within a year and Colorado has laws which have made the process more streamlined in recent years.
There is a waiting period of six months – the creditor claim period – in Colorado that gives creditors time to file claims after a probate notice is posted (it’s up to the estate’s personal representative to notify creditors either through publication in a local newspaper or by mail). Once the waiting period is over, then it’s up to the personal representative to gather assets, pay debts and taxes and distribute assets to any designated beneficiaries.
Situations where probate cases drag on for years do occur, however they usually involve special circumstances, like family infighting, very large estates owing federal or state estate tax or estates that continue to earn income (you’ll often hear about cases like these involving celebrities).
Myth: The cost of probate will eat up my entire estate.
Fact: Of course, it depends on the size of the estate and each case is unique, but probate costs don’t have to break the bank. Common costs associated with probate may include court fees, appraisal costs, personal representative’s fees, attorneys’ fees, accounting fees and surety bonds.
Factors that can affect the cost of probate include:
- Disputes. For example, a relative decides to contest the will.
- A complex estate. For example, the estate owns property outside of Colorado.
- The size of the estate. A smaller estate will usually get through probate at a lower cost.
- Whether there is a will. Probate often becomes more expensive when there is no will as it leaves room for debate amongst relatives.
How a Colorado Springs estate planning and probate attorney can help
Robinson & Henry P.C.’s estate planning and probate attorneys are here to help you through the probate process. If you’re a personal representative who is preparing to embark on this process, give us a call at 303-688-0944 to learn more about how we can help.
Even for seemingly simple estates, it can be beneficial to have the experience of an attorney on your side to help file complicated paperwork and avoid common mistakes. If you’re facing a situation where there is, or may be, a dispute, click here to learn more about probate litigation.
Finally, effective estate planning today can lay the groundwork for a smooth probate process for your loved ones in the future.
Call us today to at 303-688-0944 schedule an assessment with an estate planning and probate attorney.