In Colorado, whether or not probate is required depends on the type and value of the property a deceased person (“decedent”) owns when they die. All of a decedent’s property is classified as either probate or nonprobate property. Generally, nonprobate property includes property owned in joint tenancy with others, life insurance proceeds, contracts with payable-on-death (POD) provisions, and property owned by a trust. Probate property on the other hand is property owned by the decedent individually or with others but not in joint tenancy. As the name implies, nonprobate property is not part of any probate. If a decedent owns only nonprobate property, then there is nothing to probate and you do not have to go through probate.
If a decedent owns any probate property, however, whether you have to go through probate depends on the type and value of the probate property. If any of the probate property is real property, then you have to go through probate. Real property is principally land and buildings. If none of the probate property is real property, then the value of the probate property determines if you have to go through probate. If the probate property is worth less than $64,000.00, then you do not have to go through probate. Instead, the probate property may be distributed using an affidavit. The $64,000.00 threshold is accurate for 2015 and changes annually based on the consumer price index.
If probate is required, don’t despair. Probate is simply a statutory process to finalize the decedent’s affairs because the decedent is not here to do it on their own. Finalizing a decedent’s affairs includes collecting the decedent’s probate property, using that property to settle the decedent’s debts, and distributing the rest to those who are entitled (“beneficiaries”). Because the decedent is not here, a court appoints someone, called the personal representative, to finalize the decedent’s affairs under the court’s supervision. The personal representative has a fiduciary obligation to the decedent’s creditors and beneficiaries to hold the decedent’s probate property for their benefit. Probate ensures creditors and beneficiaries do not end up with more or less property then they should.
To start a probate, an interested person files a petition with the district court for the county in which the decedent last resided. An interested person includes the decedent’s spouse, children, beneficiaries and creditors. The petition, among other things, nominates someone to be the personal representative. Colorado law prioritizes who may serve as the personal representative with the highest priority going to whomever the decedent nominated in their will. If there is a will, the original must be lodged with the court. If the decedent did not have a will, the next highest priority is the decedent’s spouse, followed by any beneficiary, the decedent’s heirs, and lastly the decedent’s creditors. After the petition is filed, the court will appoint someone as the personal representative and issue letters showing the court authorizes the personal representative to handle the decedent’s affairs.
Part of the petition is to elect between formal or informal probate. Formal probate has more court oversight of the personal representative compared to an informal probate. It is up to the person filing the petition to decide between formal or informal probate.
Once appointed, the personal representative informs the beneficiaries and the decedent’s creditors of the probate and appointment. The Decedent’s creditors then have four months to let the personal representative know if the decedent died with a debt. The personal representative then collects the decedent’s probate property and files a list of that property with estimated values with the court. By the end of the four months, the personal representative knows about all of the decedent’s probate property and all of the decedent’s debts. The personal representative then settles the debts using the decedent’s probate property. If the probate is formal, the personal representative may need prior court approval before settling any debts.
Once the debts are settled, the personal representative distributes the decedent’s remaining probate property to the beneficiaries. If the probate proceeding is formal, the personal representative may need prior court approval. The personal representative will distribute the probate property according to the will, but if there is no will, then pursuant to statute described below
- The decedent’s spouse inherits everything if (1) the decedent died without parent or child, or (2) all of the decedent’s children are the only children of the spouse.
- The decedent’s children inherit everything if the decedent died without a spouse.
- The decedent’s parents inherit everything if the decedent died without a spouse or child. The decedent’s siblings inherit everything if the decedent also died without a parent.
- The spouse inherits the first $335,000 worth of probate property plus 75% of the remainder if the decedent died without a child but was survived by a parent. The parent inherits the rest.
- The spouse inherits the first $251,000 worth of probate property plus 50% of the remainder if all of the decedent’s children are also children of the spouse, but the spouse has children that are not children of the decedent. The decedent’s children inherit the rest.
- The spouse inherits the first $167,000 worth of probate property plus 50% of the remainder if the any of the decedent’s children are not children of the spouse. The decedent’s children inherit the rest.
The amounts above are accurate for 2015 and change annually based on the consumer price index.
Once the remaining probate property is distributed, the probate case may be closed. The process for closing the probate depends on whether the probate is formal or informal. One year after closing the probate case, the personal representative is relieved of the obligation to handle and care for the probate property for the benefit of the creditors and beneficiaries.