Many people view probate with some sort of fear. The process seems difficult to understand and the common perception is that probate is something in which you can get bogged down for months, delaying the distribution of the estate. Probate does take some time, but in order to take some of the mystery out of it for you, we will explain all of the steps of the process and what they entail. Below are the six steps of the probate process and what they mean.
The first step to probate is the appointment of a personal representative. This is the person who is responsible for settling the estate. If you have not heard the term, chances are that you have heard of the other name for a personal representative which is the executor.
The law has an order of preference for who will be the personal administrator if there is not already one who has been chosen in a will. This is based on the closeness of the relationship to the deceased. If there is nobody who is willing to become the personal representative, the court will appoint one.
Once the personal representative has been appointed, they will take an inventory of all of the assets that are part of the estate. They will be required to prepare for the court a report of all of the estate’s assets. This includes real estate and bank accounts and everything else that the estate owns. Anything that the deceased owned when they passed away is included in the estate and must be in the report.
Any physical assets of the estate such as real estate must be sold. If there are any bank account, they are closed and all money is deposited into the estate’s account.
Assets must be liquidated if they cannot be divided among the beneficiaries or if money is needed to cover the debts of the estate. The creditors must be paid since probate is the last time that they will have access to the estate in order to receive payment for the debt of the deceased.
In this phase of probate, the creditors are paid. Make sure to wait to pay the creditors until after probate begins. Sometimes, you may receive some final bills of the deceased such as a credit card bill. What you may not know is that there may be some room to negotiate that payment as part of the probate process. Some creditors may settle for less than the full amount that they are owed. A probate attorney can help negotiate with creditors on behalf of the estate in order to possibly reduce their payment which can mean more money for the beneficiaries.
In order to perform an accounting of the estate, the personal representative must report on all of the transactions of the estate during a given time period. Anything that has come into or gone out of the estate is reported to the court. If all of the beneficiaries agree to it, this step can be waived. If the accounting is not waived, it must be done in order to divide and distribute the estate.
Once all of these steps have been taken, the assets of the estate may then be distributed to the beneficiaries. If there is a will in place, the property is distributed in accordance with the instructions that are in the will. If the deceased has passed away without a valid will in place, then the property is distributed according to the intestacy laws of Colorado. These laws will guide the court in determining who gets which parts of the estate and how much of it they receive.
After the estate’s property has all been distributed, the personal representative’s job is largely finished and the estate is ready to be closed. The personal representative files the paperwork with the court to close the estate, informing the court of all of the transactions made by the estate. This releases the personal representative from their duties with regard to the estate.
If you are wondering how long probate will take, in Colorado, it must take a minimum of six months. More complicated estates with complex issues can take longer than the minimum six months. Probate can drag on for up to two years based on the complexity of the estate and whether there is any litigation involved.
Mile High Estate Planning can help you if you have any questions about how probate works in Colorado. Call us today if you need assistance or if we can further explain probate to you.
Probate is the court-supervised process for distributing an individual’s assets after they pass away. There are six steps to the probate process. First, a personal representative must be appointed. Any beneficiary, heir, or creditor of the estate can apply to be a personal representative. There’s a statutory list of who will be assigned a personal representative duty first, but if that first individual does not step up to be a personal representative, another individual can step in to serve as a personal representative of the estate. Once a personal representative of the estate has been appointed, it is their duty than to perform an inventory of the assets inside of the estate, they have to report to the court a list of all of the assets, real estate, bank accounts, personal property that the individual who passed away owned at the time of their passing. Next, all of these state assets must be liquidated.
Real estate must be sold, bank accounts must all be to deposited into an estate account. Then any creditors or outstanding debts must either be paid or settled. A small probate tip, if you receive a credit card statement, don’t pay that right away after someone passes away because typically in the probate setting you can negotiate a settlement with the credit card companies to get a reduced debt. A licensed probate attorney can help you negotiate your debts on behalf of an individual who’s passed away. The next step in the process is to perform accounting. The court will need to know what has come into the estate, what has gone out of the estate, and then you can make distributions to the beneficiaries in accordance with the terms of the will or if there’s not a will, then in accordance with the default and laws. And finally, once all assets have been distributed, all creditors have been paid. You can then file paperwork to close the estate. Probate in Colorado is required to take six months and can run anywhere from six months to two years depending on the size of the state, the complexity, and how quickly the court is able to process the documents that we sent to them. If you have any questions about probating an estate in Colorado, please feel free to give my office a call anytime.