Colorado Probate Toolkit: Learn how probate works in Colorado, and how simple probate-avoiding shortcuts can save you time and money.
Welcome to the fastest and easiest way to find out about Inheritance Law in Colorado.
Three things to keep in mind:
1. Many estates can avoid probate altogether, either because they're small enough to fall under a state's small estates limit, because the assets were held in a living trust, or because the assets will go to named beneficiaries because they are held as pay-on-death or joint tenancy accounts, or in retirement or life insurance.
2. You have to pay creditors and taxes before you can inherit assets.
3. Most estates do not need to file a Federal estate tax return. Unless an estate is worth more than $12,920,000, it will not need to file a Federal estate tax return.
Do you have questions about your inheritance or need help with probate in Colorado?
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Colorado residents do not need to worry about a state estate or inheritance tax. Colorado does not have these kinds of taxes, which some states levy on people who either owned property in the state where they lived (estate tax) or who inherit property from someone who lived there (inheritance tax). more...
Probate is the official way that an estate gets settled under the supervision of the court. A person, usually a surviving spouse or an adult child, is appointed by the court if there is no Will, or nominated by the deceased person's Will. Once appointed, this person, called an executor or Personal Representative, has the legal authority to gather and value the assets owned by the estate, to pay bills and taxes, and, ultimately, to distribute the assets to the heirs or beneficiaries. more...
In Colorado, there's an Affidavit procedure for estates that are less than $70,000. This limit only applies to assets that would otherwise pass through probate, so excludes all joint tenancy property and all assets that pass by beneficiary designation, like life insurance and payable on death accounts. There is a ten-day waiting period.
You can get the forms required here.
Colo. Rev. Stat. Ann. 15-12-1201
There's also a summary probate procedure for estates whose value is less than the value of personal property held by the decedent as trustee (so living trust assets don't count), exempt property allowance, family allowance, costs of administration, funeral expenses, and medical expenses for last illness.
Colo. Rev. Stat. Ann. 15-12-1203
Not everything a person owns is part of their "Estate" for probate purposes.
If you're wrapping up the estate of a Colorado resident who died with an estate that's worth less than a certain dollar amount, you won't have to go through a formal probate court proceeding.
It doesn't matter whether or not the deceased person left a will; what matters is the value of the assets left behind. If the estate's value is under the "small estates" limit in Colorado, you can take advantage of a simplified probate procedure, often called a "summary probate." Instead of having a court hearing in front of a judge, you may need only to file a simple form or two and wait for a certain amount of time before distributing the assets.
In some states, it can be even easier: Inheritors can use a simple affidavit to claim assets. (An affidavit is a statement you sign in front of a notary, swearing something is true.) If you live in one of those states, you just have to wait a required period of time, then sign a simple, sworn statement that no probate proceeding is happening in your state and that you are the person entitled to inherit a particular asset--a bank account, for example.
When you are trying to determine whether or not an estate's value is below the Colorado small estates limit, the first thing to do is make a list of the assets. A simple spreadsheet or list will do.
Not everything a person owns counts, though.
Include only the things that pass to heirs and beneficiaries by will or, if there's no will, by Colorado intestacy laws, which determine who inherits if there is no will.
Until a child is eighteen years old, they can't inherit property in their own name. Instead, an adult needs to manage that property until the child can manage it for themselves.
A child can inherit property in several ways:
If a child is the beneficiary of a trust, the Trustee will need to get a tax identification number for that child's trust, open up a bank or brokerage account in the name of the trust (using that new tax id number), and then distribute the assets to the child as directed by the trust.
For example, if a child is the beneficiary of a trust to age twenty-five, and the trust directs the Trustee to distribute the money for that child's, "health, education, maintenance, and support," (which would be a typical distribution standard), it will be the Trustee's job to distribute money to that child until the child turns 25. After that, the trust would terminate, and the child would be in charge of managing and distributing the money themselves.
If your spouse or parent dies without a Will, Colorado law determines who will inherit his or her property. These laws, called intestacy laws, are essentially state-written Willls that determine who gets the decedent's property. The word "intestate" describes a person who dies without a will. A person who dies with a Will is said to die "testate."
Generally, in intestate succession, property goes to close family members, starting with a surviving spouse and children, and then gradually widening out to parents, siblings, nieces and nephews, grandparents and their legal descendants, and more distant relatives after that. If absolutely no relatives can be found, then a decedent's property goes to the state.
If you are serving as the executor or trustee of a deceased person's estate or trust, you are going to have to get a taxpayer identification number for the estate or the trust. You cannot use the deceased person's Social Security number, or use your own. There is one exception to this rule: if you are the surviving spouse, and everything is left to you either outright or in a revocable living trust, you can continue to use your own Social Security number for these assets, but that's because, essentially, they are your assets.
This ID number, called an EIN ("employer identification number"), is like a Social Security number for the estate or trust. You'll need it to open a bank or brokerage account, and it's what the bank or other financial institution is going to use to report the interest earned on those accounts until they are distributed to the estate's or trust's beneficiaries.
The easiest way to apply for an EIN is on the IRS website, www.irs.gov. The process just takes a few minutes and, when you are done, the site gives you the EIN that you'll use for the estate or the trust. If you don't have access to a computer, you can fax in an application to this number: (859) 669-5760.
Wills and trusts get a lot of attention in the movies when it comes to inheritances, but in real life, life insurance often is the source of the biggest cash benefit to families and loved ones. And who gets that money usually has absolutely NOTHING to do with either a Will or a trust, instead, it is the policy's beneficiaries who will receive that death benefit.
When someone purchases a life insurance policy, they have to name primary and secondary beneficiaries. The primary beneficiary receives the death benefit if they survive the insured party; the secondary beneficiaries will receive that benefit only if the primary beneficiary does not survive the insured party.
In order to claim these benefits you'll need to know the following things:
Read on to find out how to do each of these four things.
For example, if a husband, Sam, names his wife, Lani, as the primary beneficiary of his $1 million policy, and then his three adult children, in equal shares, as the secondary beneficiaries of that policy,
In December of 2019, Congress passed a law called the SECURE Act, making big changes to retirement and estate planning. (“SECURE” stands for Setting Every Community Up for Retirement Enhancement.) One of the most significant changes is what happens if you inherit an IRA.
The old rules gave several choices to someone who inherited an IRA. One option was to withdraw only a small amount from the inherited account each year. The withdrawal amount was based on the beneficiary’s age, and it allowed the bulk of the inherited IRA to continue to grow tax free. (The beneficiary paid tax on only the small amount that they withdrew.)
But not anymore.
Now, the beneficiary must withdraw all of the money in an inherited IRA by the tenth anniversary of the plan holder’s death. And all of those withdrawals are subject to income tax at the beneficiary’s tax rate. The law does not require minimum distributions during that ten-year period, but it is no longer possible to stretch out withdrawals over the beneficiary’s life.
Property held in joint tenancy passes automatically to the surviving joint tenant (or tenants) when a joint tenant dies. It is probably the most common way that people own property together. No probate is necessary, just some paperwork. This is called "right of survivorship" and it makes the transfer of property upon death really easy.
Married couples can own most of their property this way: homes, cars, bank accounts, and brokerage accounts. Unrelated partners can own property as joint tenants, and sometimes parents will own property with their children this way, as well. more...
Capital gains taxes are taxes that you need to pay when you sell an asset that has gone up in value. You are taxed on the difference between what you bought the asset for (called "basis") and what you sold it for. Every piece of property has a tax basis. Generally, its the amount a person paid for the property. When you inherit an asset, you need to know what basis that asset has, so that, later, if you go ahead and sell it, you can calculate the capital gains taxes that will be due. (Currently, the federal long-term capital gains rate is 15% for most people; 20% + a 3.8% (23.8%) Medicaid surcharge for high earners.)
Generally, an asset is inherited with a basis equal to its date of death value. This is called a stepped-up basis, because an asset's basis is increased to reflect its value at the date of death. A step-up in basis is a big tax advantage because it reduces the capital gains taxes due upon the sale of an inherited asset. The higher the tax basis, the lower the capital gains upon the sale of that property. more...
Here's a quick summary of the new gift, estate, and inheritance changes that came along in 2022. Spoiler alert: very few people now have to pay these taxes.
1. The federal estate and gift tax exemption increased from $5,000,000 in 2017 to $10,000,000 in 2018, indexed to inflation. In 2023, that is $12.92 million. This higher federal exemption means that fewer people will be subject to the estate tax since only estates with assets that exceed that exemption are required to file a federal estate tax return. (Surviving spouses of decedents with estates less than this exemption may still decide to file an estate tax return to request portability, which is the ability to use their deceased spouse's unused exemption at their own death, but they are not required to do so.) Click here to find out more about when an estate tax return does, or doesn't, need to be filed.
2. Several states have increased their state estate tax exemptions, either because they were already indexed for inflation or because they changed their state laws, either way, this means that fewer residents of those states will be subject to estate tax. more...
You don’t always need to hire an inheritance and probate lawyer to help you wrap up someone’s estate -- but you should at least take some time to consider the ways a probate lawyer can help you.
Inheritance & probate law is a specialty, and a good probate lawyer can make a big difference in the results you get. If you decide to hire a lawyer, you’ll want to find someone who focuses only or almost exclusively on probate cases, rather than using a general practice lawyer or a lawyer who concentrates on some other legal subject.
If you've been reading at all, you know that the improvement in generative AI tools, like ChatGPT v.4, have made it possible now to get work done more quickly than ever, especially in knowledge fields like law.
This is great news for consumers because now they can use ChatGPT as a probate assistant when dealing with transferring the property of a loved one when someone dies in their state.
This article will show you how to effectively use AI tools like ChatGPT, Google Bard, and Claude.ai to help you through the probate process in your state.
Let's get started. more...
If you plan ahead, here's a collection of forms you can use while you're still alive, if you plan ahead, to avoid having your assets go through probate when you die.
If you are already in probate, you may find the forms for transferring property useful.