Avoiding Colorado Probate

Avoiding Probate

Probate is the court process of settling a deceased person's estate, whether it is with a will (testate) or without a will (intestate).

If you die testate, probate will be carried out according to the instructions left in your will. If you die intestate, Colorado Intestate Succession laws will dictate how your estate will be distributed.

Why Avoid Probate?

Whether you die testate or intestate, having your estate avoid probate is a good thing for many reasons. Some of the most common reasons why people wish to avoid probate are as follows:

  • To avoid spouse's and creditor's claims
  • To save the time it takes to probate an estate - if an estate is very complex or if disputes arise among beneficiaries, for example, these things may delay the probate process significantly.
  • To maintain privacy - all probate records are open to the public and can be accessed by anyone. Someone who is concerned about maintaining privacy may be sensitive to the fact that probate records are open to the public.
  • To avoid the cost of probate administration - aside from court fees, some of the cost of administration may include probate taxes, attorney's fees, accountant's fees, etc.
  • To avoid conflicts - some people simply want to avoid probate in order to head off any disputes between and among their loved ones over their estate.

These are a few of the many reasons why you may want to avoid probate. But, how can probate be avoided?

Essentially, in order for your estate to avoid probate, you must own all of your property in such a way that upon your death, you own no property in your own name i.e. you have no probate property.

Non-Probate vs. Probate Property

For the purpose of discussing probate avoidance, your property can be divided into two different categories:

  1. Non-probate Property
  2. Probate Property

Non-probate Property

Non-probate property is real or personal property that is not part of your estate. Because non-probate property is not considered part of your estate, it will:

The personal representative is accountable to the estate's beneficiaries, to whom he or she owes a fiduciary duty to properly supervise the administration of the estate and to safeguard the estate's assets for their benefit. The job of an executor is thus an important one. This is because it can preserve peace in the family and facilitate the transfer of wealth and property to the estate's heirs and beneficiaries.

  • Not be distributed according to your will
  • Not be distributed pursuant to intestate succession statute (if there is no will)
  • Not be subject to the administration of your estate
  • Not be subject to your spouse's claims (his or her elective share, for example)

Examples of non-probate property included:

  • Real and personal property held in joint tenancy with the right of survivorship
  • Real and personal property transferred into a living trust registered as being owned by the trustee
  • Money placed into a bank account as a Totten Trust
  • Assets payable to a named beneficiary, such as the proceeds of a life insurance policy, annuity, employment benefit contact, IRA, etc.
  • Annual gifts of money not exceeding the amount set by the IRS

These are just some examples of non-probate property. When you die, each of these types of non-probate property will bypass probate and go directly to a named beneficiary or surviving joint tenant by contract or operation of law.

Probate Property

Probate property is real and personal property that will require probate without proper planning. This includes:

  • Real estate;
  • Bank and investment accounts;
  • Boats, cars, RVs;
  • Coin collections, jewelry, personal valuables, etc.

Generally speaking, any real or personal property that you own in your own name at the time of your death will be considered probate property and will need to pass through probate. The bottom line, however, is that if you successfully remove all of your probate property from your estate, then probate may be avoided.

So, How Do You Remove Probate Property From Your Probatable Estate?

Along with enabling your estate to bypass probate, when you transfer title to your property to a revocable living trust, you will enjoy a number of other benefits, perhaps most important, the ability to plan for someone to manage your assets in the event you become incapacitated, the ability to structure distributions from your estate, and creditor protection for the trust beneficiaries.

Consult With an Experienced Estate Planning Attorney

An experienced estate planning attorney will be familiar with the difference between probate and non-probate assets, as well as, other ways to remove probate property from your estate. In addition, a good attorney will also be sensitive to the reasons why you may wish for your estate to avoid probate.

To learn more about avoiding probate in Colorado, contact an experienced Colorado estate planning attorney to arrange a no-cost, no-obligation consultation today.