This process is one that few people think about until they have to figure out how to deal with the estate of a loved one. For many this first-time involvement with the probate system illustrates the mess that can be left behind without proper planning.
Probate is the established legal process used to make sure the decedent’s assets go to the right people (either according to the terms of a Will or Colorado intestacy laws). Here is a warning: If you do not have a will, state defaults decide everything for you. With that out of the way, we will cover the required steps in FAQ format.
Who is responsible for administration?
A will answers this immediate question in most cases by listing a named Personal Representative. For intestate estates (those where a loved one left no will) the court will appoint someone. This person oversees the process and does quite a bit of the leg work.
Administration is important, because it clears title to property, settles or eliminates debts and offers protection to the person tasked with these duties. The Personal Representative has a fiduciary duty from the outset. It is often beneficial to consult with an experienced attorney to get sound answers and find out when to seek legal counsel along the way.
How is the estate opened?
Opening the estate involves filing the right paperwork with the court. Then the probate court issues formal appointment papers to the Personal Representative. These can be necessary to locate all estate property.
Then it is time to go to work documenting what makes up the estate, this includes interests in property, cash under the mattress, gold coin collections and the more typical investment accounts and insurance policies. The size of the estate will determine the sophistication of your Excel document. You need to properly collect and account for estate assets rather quickly, because the court requests an inventory of the estate within 90 days of appointment.
Are there existing debts or claims to settle?
You will probably find many of the outstanding bills by checking the mail, but you might miss others with electronic notification if you do not have access to an email account. Publishing a notice in the newspaper is one way to provide all creditors notice. You can also provide notice of a death to creditors by mail.
Negotiations with creditors may reduce what is paid to settle accounts. This may be important with final hospital bills. Other bills like student loans and credit card debt usually do not survive a person.
What’s the last step?
After paying creditors, you are ready to deduct administration expenses and distribute the remaining assets. Filing a Final Accounting with the court (and providing it to interested parties) completes the process.
At the beginning, while you may still be processing emotions after the loss, this process can seem daunting. By taking the first step and bringing in professionals when you feel overwhelmed, you can ensure legacy gifts reach their intended destinations.