When a loved one dies, their estate must be sorted and distributed. This process can be long and complicated, especially if the deceased left a large estate. Their estate must go through a legal process called probate in order to be distributed to the deceased person’s heirs. Unfortunately, probate can be a long and expensive process, so it’s important to take steps to avoid it if possible. In some cases, probate may take several years to complete.
In Colorado, probate is generally required if the deceased person owned assets worth more than $50,000.There are steps you can take to avoid probate and make the process easier for your loved ones. Here’s what you need to know.
Table of Contents
•What Is Probate And How Long Does It Take
•What Assets Are Subject To Probate
•How To Avoid Probate
•Can Property Be Transferred Without Probate
•Small Estate Affidavit Colorado
•Colorado Small Estate Affidavit Instructions
•Does A Will Avoid Probate
•Can You Sell A House Without Going Through Probate
➥Why Should You Sell A Property To Colorado Cash Buyers
What Is Probate And How Long Does It Take?
Probate is the legal process of administering the estate of a deceased person. The primary purpose of probate is to settle any debts or taxes owed by the deceased, as well as to resolve any disputed claims against the estate.
However, in other cases, probate may be resolved relatively quickly. The amount of time it takes to probate an estate will depend on a number of factors, including the size and value of the estate, the complexity of the probate proceedings, and whether any disputes arise during probate.
What Assets Are Subject To Probate?
Not all assets are subject to probate. Generally, only assets that are titled in the deceased person’s name alone are subject to probate. These assets may include:
- Real estate property
- Bank accounts
- Investment accounts
- Life insurance policies
- Personal property
Some assets, such as retirement accounts and certain types of trusts, are not subject to probate. These assets typically pass directly to the named beneficiary without going through probate.
How To Avoid Probate?
There are several ways to avoid probate in Colorado.
- Create a living trust. This is a legal document that allows you to specify how your assets will be distributed after your death. You can name a trustee to manage the trust, and they will be responsible for distributing the assets according to your instructions. Another way to avoid probate is to designate beneficiaries on your accounts. This means that the account will go directly to the beneficiary upon your death, without going through probate. You can name beneficiaries on bank accounts, investment accounts, life insurance policies, and more.
- Hold your assets jointly with someone else. This means that when one owner dies, the surviving owner automatically becomes the sole owner of the property. The property does not have to go through probate in order to be transferred to the new owner. Be careful, though, because joint ownership comes with its own risks. For example, if you hold your house jointly with someone else and they get into financial difficulty, the creditors may be able to force the sale of your house in order to pay their debts.
- Give gifts during your lifetime. You can give away certain types of property during your lifetime. For instance, you can give each of your children up to $14,000 worth of property per year without incurring any gift taxes. If you give away more than $14,000 per year to any one person, you’ll need to file a gift tax return. However, there are some rules and limitations on gifting, so it’s important to speak with an attorney before doing this.
- Set up a pay-on-death account. Many financial accounts, such as life insurance policies and retirement accounts, allow you to name a beneficiary who will receive the account proceeds upon your death. The beneficiary can claim the funds without going through probate.
- Transfer property to a revocable living trust. This type of trust allows you to retain control of the property during your lifetime, but upon your death, the property will go to the beneficiaries named in the trust without going through probate.
Taking steps to avoid probate can save your loved ones time and money after your death. Talk to an attorney to learn more about how to best protect your assets and ensure that they are distributed according to your wishes.
Can Property Be Transferred Without Probate?
Yes, in some cases property can be transferred without probate. As mentioned above, certain types of assets, such as retirement accounts and pay-on-death accounts, will pass to the named beneficiary without going through probate. Additionally, Colorado has a process called “small estate affidavit” which allows certain smaller estates to be transferred without probate.
Small Estate Affidavit Colorado
A small estate affidavit is a legal document that is filed with the court in order to transfer the assets of a small estate without going through probate. The affidavit must meet certain requirements in order to be valid, including:
- The value of the estate is less than $50,000
- There is no real estate property in the estate
- There are no debts owed by the estate
- All heirs are in agreement on how to distribute the assets
- The affidavit of the small estate must be filed with the court and all interested parties must be given notice.
Colorado Small Estate Affidavit Instructions
In order to file a small estate affidavit in Colorado, you will need to:
Gather all relevant documentation, including the death certificate, inheritance agreement (if there is one), and any deeds or titles to property.
- Fill out the affidavit of small estate form. This form can be found on the Colorado courts website.
- File the affidavit with the court. You will need to pay a filing fee, which is currently $164.
- A notice must be given to all interested parties. This includes anyone who would have inherited from the decedent if there was no will or if the will was invalid.
- Once the affidavit is filed and notice has been given, the assets of the estate can be distributed according to the instructions in the affidavit.
Filing a small estate affidavit is a relatively simple process, but it’s important to make sure that you are eligible to do so and that all requirements are met. If you have any questions, you should speak with an attorney.
Does A Will Avoid Probate?
No, a will does not avoid probate. In fact, in order for a will to be valid, it must go through probate. Probate is the legal process of proving that a will is valid and of distributing the deceased person’s assets according to the will. However, there are ways to avoid probate by taking steps to transfer your assets outside of probate.
Can You Sell A House Without Going Through Probate?
You can only sell the house without going through probate if the house is owned jointly with someone else or if it is held in a revocable living trust.
If the house is not owned jointly and is not held in a trust, then it will generally have to go through probate before it can be sold.
Why Should You Sell A Property To Colorado Cash Buyers?
Colorado Cash Buyers is a leading cash buyer of properties in Colorado. We are a locally owned and operated company that specializes in buying houses as-is, without making a repair or renovations. If you’re interested in selling your property, contact us today! We would be happy to make you a fair offer on your home.