One area of expertise for an estate planning attorney is probate, which is the legal process involving the administration of a deceased person’s will or the estate of a deceased person without a will (known as dying intestate).  Probate is carried out within a Probate Court and varies by state.  In Colorado, probate is divided into three types:

• Small estates worth under $50,000 with no real property;
• Informal probate for uncontested estates; and
• Formal probate for estates that are contested and/or have invalid or questionable wills.

The specific tasks that are carried out in the probate process include:

• Declaring a will valid or invalid;
• Transferring title of property from the deceased to an heir or beneficiary;
• Giving an executor of an estate legal standing to handle the estate’s business;
• Paying off liabilities of the deceased’s estate;
• Distributing the assets of the estate.

Often the purpose of a comprehensive estate plan is to help avoid the costs and time of a complex probate process, but probate cannot be completely avoided with a will.  All wills must be probated in Colorado if you own real estate or have more than $50,000 of property without beneficiary designations, but the involvement of the probate court varies by the complexity and size of the estate.

There are ways to avoid having your family going through probate, which helps keep the administration process shorter and less expensive.  Some choose to use a revocable living trust instead of a will to dispose of their property upon death. Assets transferred to the revocable living trust before a person’s death are not subject to probate and can be distributed upon the their death without probate. However, the trust only controls assets which have been transferred to the trust during the deceased’s lifetime and, therefore, a person should still have a will to dispose of any assets which—either intentionally or inadvertently—are left out of the trust.

While probate can be costly and complex, an estate plan can significantly simplify and reduce the costs of this process.

The Hammond Law Group is a member of the American Academy of Estate Planning Attorneys.

In order to distribute your assets to your heirs after you pass on, your estate typically must go through a legal process known as probate. This can be a lengthy and expensive process, so many people look for ways to avoid – or at least streamline – the probate process.

A trust is one way to do this but you can also use payable on death (POD) accounts to bypass probate on certain assets such as bank and investment accounts.

Also called transfer on death (TOD) accounts or trust for accounts (ITF), these accounts allow you to include a beneficiary designation as part of the account documents. After your death, your beneficiary can simply go to the bank or the investment company with proof of your death (a death certificate) and can access the account.

Disadvantages of Payable on Death Accounts

Unlike a typical joint account, the beneficiary of your POD account cannot place any claims on the funds in the account while you are alive. However, the method is not without drawbacks:

• When you are naming a single beneficiary of your POD account, you are in effect disinheriting your other heirs which can create a rift in the family.
• If your beneficiary dies before you and you fail to update your account, then the account will be added to your estate at the time of your death and go through probate. If you have named two or more beneficiaries and the death of one beneficiary precedes yours, the bank/investment company will face a problem in dividing the account.
• If you later decide to make changes to your POD account, such as shifting it into your Revocable Living Trust, some institutions might want you to get the consent of the beneficiaries as well.
• Naming a beneficiary does not allow anyone to manage your account on your behalf if you become incapacitated, so your family may have to go through a conservatorship/guardianship process to manage your account and other assets.

Ultimately, you should consult an estate planning attorney to determine the best way to title your assets and provide for your heirs.

The Hammond Law Group is a member of the American Academy of Estate Planning Attorneys.

Has a loved one named you as the executor (or “personal representative”, in Colorado)of their Last Will and Testament? If so, you may wonder what your probate responsibilities will be. As the executor you will protect all assets, pay all debts, and pass inheritances to beneficiaries.

You must be honest, impartial and follow the letter of the law. You will have the guidance of your probate attorney throughout the process.  Before you even contact an attorney, however, you should find and list all estate assets, debts, accounts, properties, and guardians or beneficiaries listed in the Last Will and Testament.   Once you have a good picture of the entire estate, you can determine, with the help of an attorney, if the holdings are small enough for a shorter, simpler version of probate.

Once probate is open, you will have some estate maintenance duties. This includes paying regular bills, such as mortgages, upkeep of  estate property, and notifying all necessary agencies, account holders and bill collectors of the deceased’s passing.

You will also need to open a bank account in the name of the estate. This account will be used to pay all bills, attorney fees, court fees, and taxes. You must be very meticulous about your bookkeeping in order to maintain the integrity of the estate and to be fair to all beneficiaries.

Did you know you are also responsible for all taxes? You must file and pay income taxes for the deceased’s final year as well as for any years after that the estate earns money while probate is open. You will also be responsible for paying all state and federal estate taxes.

Once all bills, taxes and court costs have been paid and the court or your attorney give you the go-ahead, you may distribute estate holdings to the correct beneficiaries.  Be certain that all expenses have been paid, or any cost that comes up after the estate is settled must be paid by you.  In Colorado, the probate process takes an average of 9-24 months, so you need to be patient.

During the process you must be loyal to your loved one’s memory, able to settle any family bickering, and oversee all paperwork and activities to settle the estate promptly. Being the estate executor can be a big job, especially if documents are not in order or if it is a large estate. Always ask your attorney any time you have a question, and don’t forget your loved one truly trusted you to have named you to such a position.

The Hammond Law Group is a member of the American Academy of Estate Planning Attorneys.

You can be the owner of property in three ways:

• as an individual in your own name
• jointly with one or more other people
• through contract rights

How your property is titled can make a big difference in how you plan your estate. The title will determine whether or not the property is included in the probate process and how the asset is distributed to beneficiaries.

If property is titled in your name alone and without any other joint owners, then the property would likely go through probate. There are exceptions to this of course, as certain types of assets do not go through probate because they can be distributed without court supervision. A life insurance policy for example, or a retirement plan does not require probate to be distributed to your beneficiaries.

If you are a joint tenant on the other hand, but your part of the rent or interest is owned by you alone as an individual – without any joint owners – then the value of your interest in the property would be probated.

How will the probate be conducted?

After your death, the probate Judge will appoint an Executor or Personal Representative as named in your Will. If you have not named anyone, the Court will appoint a person for the purpose. This Personal Representative will be able to access your estate and your accounts.

The process of probate will be guided by whatever wishes you have expressed in your Will. If you have not drawn up a Will then the laws of intestacy would be followed in determining the distribution of the estate.

There are several ways to avoid the probate process altogether. A qualified estate planning attorney can help you decide which methods will work best for you.

The Hammond Law Group is a member of the American Academy of Estate Planning Attorneys.