What is Probate? Common Probate Terms and Misconceptions.
This is the first of a 10-part series that addresses the most common types of Probate in Colorado.
The list of topics that will be covered in this introductory series of postings can be viewed here.
Probate is the administration of a deceased person’s estate. The estate of a deceased person generally consists of all property owned at the time he or she died.
All estate administrations in Colorado are governed by Colorado law.
The administration of an estate begins with the appointment of a Personal Representative (formerly referred to as an Executor, Executrix, or Administrator). This person collects the deceased person’s assets, pays valid claims, and distributes the estate to the heirs or beneficiaries. The Representative should also close the estate—either formally or informally—at which point the administration ends.
A Personal Representative is a fiduciary and has a heightened duty to BOTH the heirs or beneficiaries of an estate (those who should receive a portion of the estate) AND creditors (those to whom the deceased owed money). It is a common misconception that the Personal Representative does not have any obligations to creditors. This is incorrect. A Personal Representative can be personally liable for his or her actions if the estate is not handled properly.
A Personal Representative can usually be appointed informally, which means that no court appearance is required, or formally, which means that a court appearance is required.
In limited circumstances, an administration is not required, and the Decedent’s estate can be collected and distributed via an Affidavit for Collection of Personal Property (sometimes called a Small Estates Affidavit in other states). Unlike some other states, an Affidavit for Collection of Personal Property can NEVER be used to transfer title/ownership of real estate in Colorado.
Sometimes real estate is held in joint tenancy with right of survivorship. In this situation, the deceased person’s ownership dissolves upon his or hear death, and the real estate is not part of the estate. Rather, the remaining co-tenant(s) own the real estate. It is a common misconception that no steps are needed to show that title has passed from the deceased person to the remaining joint tenants. This is not true, and the general steps needed to show that the deceased person longer has an interest in the real property will be covered in a subsequent blog posting.
A Beneficiary Deed keeps real property from being part of an estate. A Beneficiary Deed is a special type of deed that must be filed with the real property clerk while the grantor (the person giving an interest in real property to another person) is still alive in order to be valid. Upon the death of the grantor, the Beneficiary Deed takes effect, and the deeded real estate is automatically transferred to the person(s) listed in it. It is a common misconception that no steps are needed to show that title has passed from the deceased person to those listed in the Beneficiary Deed, and the general steps needed to perfect title in this situation will be covered in a subsequent blog posting.
When someone who dies leaves a will, the will MUST be filed with the clerk’s office in the county where the deceased person resided at the time of his or her death. It is a common misconception to believe that a will can be ignored if there is no need for an administration or someone disagrees with the way it distributes the estate.
A claim is the legal term for a request for payment of funds from the estate. The validity of a claim hinges upon a number of factors, which will be discussed in the eighth blog post of this series.
It is a common misconception that a Personal Representative who has a claim against the estate he or she is administering does not have to formally submit a claim. This is INCORRECT. A Personal Representative MUST file a claim against the estate in order to properly reimburse himself or herself for their claim. The Personal Representative can be held personally liable if the estate is not handled properly.
It is also a common misconception that the Personal Representative can just pay whomever he or she chooses. The law specifies the order and priority for the payment of claims and the distribution of the estate. If the Personal Representative makes an incorrect payment or distribution, he or she can be personally liable.
This posting is for the purpose of general information only. It addresses the general application of Colorado probate law. It is not legal advice. Each individual situation requires a careful review of the facts in order to properly apply the law to the facts.
If you have any questions about probate in Colorado or the duties of a Personal Representative, you should consult with an attorney. There are also clinics in most counties where you can briefly meet with a volunteer probate attorney.