What Colorado Residents Need to Know About Inheritance Law
Colorado offers several ways for consumers to make the inheritance process fast and efficient. For one there's an affidavit procedure the estates that are less than $70,000.
Keep reading to learn more about your options under inheritance law in Colorado.
And you and use Transfer on Death Deeds for real estate in Colorado as a low-cost probate avoidance option as part of your probate avoidance strategy.
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Welcome to the fastest and easiest way to find out about Inheritance Law in Colorado.
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This site will provide you with tips and tools and checklists that you can use in Colorado to transfer property at death as quickly and affordablbly as possible.
Six Things to Keep In Mind About Colorado Inheritance Law
Here are 6 things to keep in mind about probate and transferring property at death:
1. Much of your property never goes through probate or your will
You may not realize that, if your bank accounts or other accounts have a named beneficiary on file with the financial institution, that account will never pass through your will and will bypass the probate process.
Many estates can avoid probate altogether, because assets will go to named beneficiaries because they are held as pay-on-death or joint tenancy accounts, or in retirement accounts with a named beneficiary or life insurance, or the assets were held in a living trust, and whatever is left is small enough to fall under a state's small estates limit.
Property That Avoids Probate in Colorado
If you are a beneficiary or a joint owner "with right of survivorship" (WROS), you can typically claim the asset by dealing with the financial institution directly, and provide them with a death certificate and proof of your identity as a beneficiary.
- Retirement Accounts: How to inherit an IRAs and other retirement accounts in Colorado.
- Life Insurance: How to inherit life insurance.
- Joint Tenancy w/Right of Survivorship (JTWROS): How to inherit joint tenancy property.
- Pay on Death and Transfer-on-Death Financial Accounts (POD) & (TOD): How to inherit payable-on-death or transfer on accounts in Colorado.
- Transfer-on-Death Deeds (TODDs): TODDs are a low cost alternative to a living trust as a simple way to transfer real estate at death without probate, the same way you would a financial account. Learn if transfer-on-death deeds are avaialble in Colorado.
- Living Trusts: Property held by a living trust does not pass through probate, but only if property ownership was correctly transferred to the living trust once it was set up.
2. Probate is governed by state law and is handled by the county court where the deceased person resided or owned property
- How Probate Works in Colorado: Get an overview of how probate works, and whether your estate may be able to bypass the procedure entirely.
If you haven't done so already, make sure you enter the zip code or at least select the state and county of residence for the person who died, to learn about the probate law and probate court procedure for that state and county.
Helpful Links
PROBATE COURT
Frederick, CO Probate Court Finder: Get details about Weld County probate court.
(You are currently looking at information for Frederick, CO. Click here for information about Probate Court for Weld County.)
If the Deceased Owned Property In More Than One State
If the deceased person owned property in more than one state, "ancillary probate" proceedings may be required in those other states, depending on how the property was owned. These extra hurdles can be avoided by some simple planning ahead.
3. Simplified Colorado Probate Procedures May Be Available to Transfer Property Quickly
For property that did not have a beneficiary designation or was not in a living trust, there may be "simplified probate" procedures or "small estate affidavit" procedures in Colorado for transferring certain kinds of property at death, which can avoid the cost and time of a full-blown court-supervised probate proceeding.
SHORTCUTS:
Small Estate Procedures in Colorado: Many states allow simplified procedures for small estates and certain kinds of property which can be transferred by a simple affidavit procedure if the value of the estate falls under a certain limit.
Property Transfer Affidavits: Most states have quick procedures for transferring property valued less than a certain amount, if all the heirs agree.
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
Need Professional Help? Talk to a Probate Attorney
Want help handling your duties as an executor of a Colorado estate? Connect with a Colorado probate lawyer from the Nolo/Martindale network.
4. Even if there's no will, someone needs to start the probate process when someone dies
Regardless of the size of the estate, someone needs to start the probate process within a certain period after someone dies. If you were named the executor in the will, you are that person.
If there is no will, or no executor was named in the will, the court will appoint someone to be responsible for filing the necessary documents to complete the process of paying debts and taxes and funeral expenses from the estate and distributing property to beneficiaries.
If you are a beneficiary of a small estate, you may be able to claim your inheritance with a simple affidavit. (If there is no will, beneficiaries are determined by the "intestate succession" laws in the state where the person is a resident.)
Wills & Intestacy
- Wills: What are they? Do I need one? What if someone dies without one?
- Naming an executor.
- Appointing guardians and property managers for minor children
- Specifying how debts should be paid
- No Will? Who Inherits if a Spouse or Parent Dies Without a Will in Colorado
5. Death & Taxes: Most estates do not need to file an estate tax return, but there are other kinds of year-end taxes to be paid when someone dies
Unless an estate is worth more than $13,610,000, it will not need to file a Federal estate tax return.
- What taxes need to paid when someone dies?
- Colorado Estate Tax: Whether or not Colorado has an inheritance or estate tax
Colorado, like most states, does not impose an estate or inheritance tax. Only a few states do.
- Tax ID Number: How to get a federal tax identification number for an estate or trust
- Which Taxes Need Filing? What taxes need to be filed after someone has died
- Capital Gains: One way the rich get richer is the so-called "stepped-up basis" on inherited property. Learn how capital gains are calculated on inherited property.
6. Creditors and taxes must be paid before you can inherit assets
- The estate always must pay taxes before any other creditors can get paid.
- Debts that are secured by property, like mortages, are called secured debts, because if someone doesn't pay the loan, the lender can take the property. If you inherit a house, you also inherit the mortgage.
- Unsecured debts, like credit cards, don't work that way -- as a beneficiary you are not responsible for that debt,
- But the estate needs to pay all known creditors before distributing property to beneficiaries and heirs. Otherwise, a creditor can come calling to get paid back from estate assets, even after they've been distributed.
- Most states have some sort of protection from creditors in the form of a “family allowance” and/or a homestead exemption.