Frequently Asked Questions About Probate/Trusts/Wills/
Estate Planning

Probate is the process by which a decedent’s estate is settled and its assets are distributed. A probate case is required to be filed in the county where the deceased resided at the time of death. A personal representative (or executor) will be appointed by the court. The personal representative is responsible for managing the estate’s assets and moving the estate through the probate court proceedings. The personal representative must pay creditors, debts, and taxes related to the property.

Ancillary probate is a secondary probate process needed in order to transfer a deceased person’s assets, such as real estate or vehicles that are located outside the state where they lived. This is necessary in order to comply with each state’s laws governing property. Ancillary probate can be complicated and costly.

No. If estate property is transferable outside of probate, it is not necessary. Probate can be avoided with tools such as revocable living trusts, payable on death designations, right of survivorship, joint ownership designations, beneficiary deeds, or utilizing a small estate affidavit for estates under a certain value. Your estate planning attorney will know how to use these tools properly in order to avoid the risk of exposing property to creditors, divorce, mortgage issues and the like.

Yes. It is a common misconception that probate can be avoided with a will. However, a will is simply a precursor to the probate process. A will is a set of instructions designating who you wish to administer your estate and who you want to receive your possessions when you die.

Probate is the legal process supervised by the courts to ensure that those instructions are followed.

 In Colorado, probate typically takes 9-24 months. A simple, uncontested estate may finish quicker, maybe 6-12 months. Smaller estates ($50,000 or less) tend to take less time while complex estates with high assets or contested issues could take years. With a skilled practitioner by your side, the process will be easier to understand and less stressful.

In Colorado, probate costs can range from $10,000-$15,000 or more. These numbers can change due to a host of factors such as the size of the estate itself, court and attorney fees, or executor fees. A skilled attorney can assist in keeping costs down and shortening the time to close the probate case by simplifying the process.

In Colorado, a personal representative is the legal term for the court-appointed person managing a deceased person’s estate. This is true whether there is a will or not. A personal representative may be called an executor in some states, but Colorado no longer uses that term. By whichever name, a personal representative or executor’s job is to manage the deceased person’s estate, gather assets, pay debts and taxes, and properly distribute remaining property to heirs.

A personal representative has the following duties:

1. Duty of impartiality: they must treat all parties with interest in the estate equally;
2. Duty of undivided loyalty: they must favor the interests of the estate and interested parties over their own interest;
3. Duty to administer the estate with care and by Colorado law.

The personal representative is responsible for opening and maintaining bank accounts, maintaining accurate record keeping such as inventory and accountings, selling and transferring any assets, property and real estate; and settle claims with creditors during the probate process.

Someone you trust. A close relative or friend who you know is good with managing finances, deadlines, and paperwork. Your attorney can be your personal representative as well. To qualify as a personal representative, the individual must be 18 years or older, possess a clean criminal record, and be a US citizen.

 Yes, you can change who your personal representative is by filing a formal amendment to your will or creating a whole new will naming someone else.

 When disagreements arise, you need a skilled lawyer to assist you with the probate process. A contested probate is when two or more individuals or entities disagree over the settlement of a deceased individual’s estate. The court will hold a contest hearing after reviewing petitions and motions filed by all parties. You will need an experienced probate lawyer to advocate and defend your position.

 Both wills and trusts are legal documents that must be drafted in accordance with state laws. A trust is a legal arrangement where a person, the grantor, transfers assets to a trustee to hold and manage for the benefit of the beneficiaries. Like an executor or personal representative, the trustee can be your attorney, a friend, a family member, or other professional. As the grantor, you will set up the trust with the help of a lawyer and title assets into the name of the trust. The trust document will identify the assets, name the trustee and beneficiaries, and specify the terms of the trust, such as when and how the assets will be distributed and whether and under what conditions the trust will be dissolved.

There are many advantages to having a trust. It’s a misconception that you must have a large estate to need a trust. The most common reasons people establish trusts are to maintain privacy and to avoid the costs of probate, issues important to everyone. Additionally, families of people with special needs will want their lawyer to draft a special needs trust (SNT) to provide for a family member with special needs while allowing them to continue receiving assistance they are entitled to.

Trusts allow Parents with minor children or blended families to control how and when assets are distributed after death so they can provide for their children in their absence. A trust allows assets to be distributed to children as they reach a certain age or meet a specific condition, like getting accepted into college. Trusts protect blended families by defining the distribution of assets to the current spouse as well as children from previous marriages. For larger estates, trusts provide options for high net worth or complicated financial situations. Trusts provide a way to manage tax liabilities while complying with the law.

All trusts fall into one of two categories: revocable or irrevocable. 

Revocable Trust: a living trust established during the grantor’s lifetime, that can be changed, altered or revoked by the grantor while they are still alive. A revocable trust offers flexibility to move assets in and out of the trust and can be useful in conjunction with a will to pass high value property, like a house, quickly to the trust beneficiaries.

Irrevocable Trust: the terms of an irrevocable trust cannot be modified, amended or revoked by the grantor once it has been created, except under narrow circumstances. In exchange for keeping the trust assets for the sole benefit of the beneficiaries, the irrevocable trust offers benefits that a revocable trust does not, such as asset protection from creditors and potential reduction in taxes.

Here are the most common types of trusts you may encounter during estate planning. Keep in mind that a trust can be more than one type, especially if you have a complex estate and need your trust to accomplish multiple things.

Living Trust: A living trust, sometimes called an inter vivos trust, is created during the grantor’s lifetime. You can create a revocable living trust or an irrevocable living trust. If you want to be able to control your assets and ensure they get to the right people, you might consider a living trust.

Testamentary Trust: A testamentary trust is created after death according to the grantor’s last will and testament. The transfer of assets cannot happen until the validity of the will has been probated in court. Testamentary trusts are irrevocable by nature since the grantor is dead and cannot change it.

Bypass Trust: A bypass trusts, also known as an AB trust, is used to help wealthy couples minimize estate taxes. The bypass trust consists of two trusts created when one spouse dies. The “A trust” or marital trust holds assets for the surviving spouse, while the “B trust” is a credit shelter trust used to minimize estate tax.

Special Kinds of Trusts: Within these categories, there are several kinds of trusts: charitable trusts, insurance trusts, QTIP trusts, generation-skipping trusts, special needs trusts, life insurance trusts, spendthrift trusts, and more. Your attorney at the Jones Law Office will help you to set up the trust that is best for you based on your wishes and your estate’s needs.

An insolvent estate is when an estate’s total value is less than the value of their debts and liabilities. Typically, if the estate is insolvent, there are not enough funds to pay liabilities, so beneficiaries are unlikely to receive an inheritance. State and federal laws dictate a strict order in which debts must be paid providing secured creditors (such as mortgages or car loans) higher priority over unsecured creditors (such as credit card companies).

Family members and beneficiaries are generally not personally responsible for the deceased’s debts unless they are a joint account holder, co-signor or guarantor. The personal representative’s role is to identify all assets and debts, notify creditors and pay debts in the legal order of priority. Administering an insolvent estate in complex. A personal representative can become personally liable if they pay debts in the wrong order or improperly distribute assets. Hiring a skilled probate attorney is essential.