Why You Should Avoid Probate
dan • April 9, 2022
If you have heard anything about probate, it's probably that you should avoid it. But probate is different from state to state and has changed substantially over the years. So what you have heard about probate may be based on a different time and different place.
Colorado has made substantial changes over the years to try to take the probate process much more manageable and less like a typical court process than it used to be. Many probates are completed without the Personal Representative ever going to court. The court wants to see certain notifications get sent out to heirs and creditors, and wants confirmation that an inventory and accounting have been made available to those parties. But the court relies on the interested parties to let it know if there is any reason to conduct hearings. Unless a party requests such a hearing, the court assumes everything is going fine and lets the estate's Personal Representative administer the estate as he or she sees fit (within the confines of state law and the decedent's will if there is one, of course).
Despite this simplified process, there are still several scenarios in which we recommend to our clients that they consider creating a plan that would avoid probate.
1. Blended family
A blended family is a family that has some sort of step relationship in it (
i.e.
, a married couple with separate kids from prior relationships). Because blended families are so common, many people fail to appreciate the complex legal issues and tricky family dynamics that blended families can encounter in the estate administration process.
The problem we most often see is that the people making the plan do what most married couples do, which is to set their estates up so that the survivor between them will receive everything at the first death. The often-inadvertent consequence of this arrangement is that the children of the first person to pass away end up receiving nothing because the survivor's plan leaves everything to his or her kids.
When asked, most married couples with blended families want to create a plan that ensures that the survivor between them will be able to continue to live the lifestyle to which they have become accustomed, but also ensure that, at the second death, all the kids from both spouses will receive distributions from the estate. A trust is often needed to create this kind of multi-step distribution process. In addition to enabling control of distributions past one step, properly funded trusts also avoid probate.
The problem we most often see is that the people making the plan do what most married couples do, which is to set their estates up so that the survivor between them will receive everything at the first death. The often-inadvertent consequence of this arrangement is that the children of the first person to pass away end up receiving nothing because the survivor's plan leaves everything to his or her kids.
When asked, most married couples with blended families want to create a plan that ensures that the survivor between them will be able to continue to live the lifestyle to which they have become accustomed, but also ensure that, at the second death, all the kids from both spouses will receive distributions from the estate. A trust is often needed to create this kind of multi-step distribution process. In addition to enabling control of distributions past one step, properly funded trusts also avoid probate.
2. Property in multiple states
Sometimes people ask us whether their estate plan will control assets located in other countries. We have to let those people know that, not only do Colorado probate courts not control property outside the country, they do not control property outside the state. If you live in Colorado and have a vacation property in Arizona, for example, an "ancillary probate" will need to be opened in Arizona to deal with the property there.
An ancillary probate process does not necessarily require all the steps that typically comprise a full probate process, but even if it is abbreviated, it frequently still requires hiring another lawyer in that jurisdiction, paying another court filing fee, publishing another creditor notice, etc. And as mentioned above, the probate process is different in each state. If your other property is in a state with a slower, more court-intensive probate process, it will complicate things.
Again, our most frequently used solution to this problem is to set up a trust, and title all properties to it. That ensures that your trustee can step in and handle all properties through one trust administration process, as opposed to having to open multiple probate cases in different jurisdictions.
An ancillary probate process does not necessarily require all the steps that typically comprise a full probate process, but even if it is abbreviated, it frequently still requires hiring another lawyer in that jurisdiction, paying another court filing fee, publishing another creditor notice, etc. And as mentioned above, the probate process is different in each state. If your other property is in a state with a slower, more court-intensive probate process, it will complicate things.
Again, our most frequently used solution to this problem is to set up a trust, and title all properties to it. That ensures that your trustee can step in and handle all properties through one trust administration process, as opposed to having to open multiple probate cases in different jurisdictions.
3. An heir who would use a court process to torment your family
As explained above, although a probate really is a court case, with a judge, a case number, and a court file, most probate cases do not require anywhere near the amount of paperwork, court hearings, or other process typically required in civil litigation or criminal matters. Still, however, as also explained above, the court will get more involved in an interested party asks it to. If you have a difficult, abusive, or combative family member, it is very easy for them to use this process to gum up the works, or worse. All that person has to do is file an objection (the current fee for which is $12) and the process can suddenly become significantly more time-consuming and adversarial. We frequently see handwritten objections filed by people without the help (and expense) of lawyers. For people who enjoy "stirring the pot," there is little incentive for them not to do this.
Interested parties can also raise objections about transfers that happen outside the probate process too, but doing so is significantly more difficult. For one thing, they usually do not have access to anywhere near the amount of information they are entitled to receive through the probate process. And then to get a court process started, they typically have to file a lawsuit, which is a much bigger deal than filing an objection in an already-existing probate process. The filing fee alone is usually at least several hundred dollars, and the filing process is complicated enough that most people will find it too difficult to do without a lawyer who, in addition to charging them, will hopefully also talk some sense into them about how good of an idea this really is.
Interested parties can also raise objections about transfers that happen outside the probate process too, but doing so is significantly more difficult. For one thing, they usually do not have access to anywhere near the amount of information they are entitled to receive through the probate process. And then to get a court process started, they typically have to file a lawsuit, which is a much bigger deal than filing an objection in an already-existing probate process. The filing fee alone is usually at least several hundred dollars, and the filing process is complicated enough that most people will find it too difficult to do without a lawyer who, in addition to charging them, will hopefully also talk some sense into them about how good of an idea this really is.
4. Personal preference
We have many clients who do not have any of the scenarios listed above, but still want to create plans that would avoid probate. Many of those clients express a desire to maintain privacy or avoid government involvement in their affairs.
What Next?
If you think it might be time to think through your estate plan, you can:
- Give us a call at 720-821-7604 to schedule a "Discovery Session" at which we can determine whether our firm would be a good fit for your needs. Or fill out our contact form to have us call you.
- Visit our estate planning page to learn more about how proactively thinking through your estate plan can protect you and your family, minimize hassle, lower the chance of family discord, and minimize or eliminate taxes.
- Learn more by reading our blog or watching our videos .
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Dealing with the death of a loved one is never easy, and navigating the legal process that follows can add stress during an already difficult time. In Colorado, probate is the legal process by which a deceased person’s estate is administered, their debts are paid, and their assets are distributed to beneficiaries. Whether you’re an executor, beneficiary, or family member, understanding how probate works in Colorado can help you anticipate the steps involved and your potential responsibilities. This blog post will provide an overview of the probate process in Colorado, outline when probate is necessary, and offer guidance on how to navigate the system effectively.  What is Probate? Probate is the legal process that occurs after someone dies to ensure their assets are distributed according to their will or, if there is no will, according to state law. The probate process includes validating the will, inventorying the deceased’s assets, paying off debts and taxes, and distributing the remaining assets to the rightful heirs. While probate is often associated with lengthy court proceedings, not all estates require formal probate. Colorado offers several options depending on the size and complexity of the estate, which can help simplify the process in many cases. When is Probate Necessary in Colorado? Probate is not always required in Colorado. Whether an estate must go through probate depends on the types and value of the deceased’s assets. Generally, probate is necessary if: The deceased owned real estate solely in their name. The deceased’s assets, such as bank accounts or investments, were not held in joint tenancy or designated to transfer on death. The deceased had personal property valued at over $74,000 (as of 2023). If an estate falls below this threshold and does not include real estate, the beneficiaries can often use a Small Estate Affidavit to claim the assets without going through probate. Types of Probate in Colorado Colorado has three main types of probate procedures: small estate procedures, informal probate, and formal probate. The type of probate required depends on the estate’s value and whether there are disputes among heirs or creditors. Small Estate Procedure (Collection by Affidavit) The small estate procedure can be used if the value of the deceased’s assets is less than $74,000 and does not include real estate. This process involves filling out a Small Estate Affidavit, which allows the heirs to collect and distribute the assets without opening a probate case in court. It is the simplest and fastest way to handle a small estate. Informal Probate Informal probate is used when there is a valid will and no disputes among heirs or creditors. The process is overseen by a court-appointed Personal Representative (executor), but there is minimal court supervision. Most of the process, such as distributing assets and paying debts, is handled by the Personal Representative, with only basic filings required with the court. Informal probate is less time-consuming and costly than formal probate. Formal Probate Formal probate is required when there are disputes regarding the will’s validity, disagreements among heirs, or if the estate is complex and needs court intervention. The process is supervised by the court, and all major decisions, such as approving the distribution of assets, must be approved by a judge. Formal probate can take much longer and involve more legal fees than informal probate. Steps in the Colorado Probate Process While the specific steps in probate can vary depending on the type of probate and the complexity of the estate, the general process in Colorado typically includes the following: Filing the Probate Petition The process begins with filing a Petition for Probate with the appropriate Colorado probate court. The petition is usually filed by the executor named in the will or an interested party if no will exists. Appointment of the Personal Representative The court will appoint a Personal Representative (executor) to manage the estate. If there is a valid will, the person named as executor is typically appointed. If no will exists, the court will appoint someone, usually a family member, to serve as the Personal Representative. Notice to Heirs and Creditors The Personal Representative must notify all potential heirs and creditors of the probate proceeding. This step is essential for providing an opportunity for interested parties to come forward and make claims against the estate. Inventory and Appraisal of Assets The Personal Representative must create an inventory of all the deceased’s assets and have them appraised if necessary. This inventory will include real estate, personal property, financial accounts, investments, and any other assets owned by the deceased. Paying Debts and Taxes Before distributing assets, the Personal Representative must pay off the deceased’s debts and any taxes owed. If the estate does not have enough assets to cover all debts, Colorado law dictates the order in which creditors are paid. Distribution of Assets Once all debts and taxes have been paid, the Personal Representative can distribute the remaining assets to the beneficiaries according to the will or, if no will exists, according to Colorado’s intestacy laws. Closing the Estate After all assets have been distributed and all required filings have been made with the court, the Personal Representative can file a Petition for Final Settlement to close the estate. Once approved, the Personal Representative’s responsibilities are complete. Challenges and Disputes in Colorado Probate Unfortunately, probate can sometimes become contentious, especially in cases involving high-value estates or when family members disagree on how assets should be distributed. Some common challenges in Colorado probate include: Will Contests Heirs or beneficiaries may challenge the validity of a will, claiming it was signed under duress, there was undue influence, or the deceased lacked the capacity to create the will. Will contests can significantly delay the probate process and require formal probate to resolve. Executor Misconduct If an executor is not fulfilling their duties or is mishandling estate assets, beneficiaries can file a complaint with the court and request the executor’s removal. Disputes Among Beneficiaries Disputes can arise over specific bequests, how assets are divided, or even the valuation of estate property. Mediation or formal court intervention may be necessary to resolve these disputes. How a Colorado Probate Attorney Can Help Navigating the probate process can be overwhelming, particularly when dealing with the emotional aftermath of losing a loved one. An experienced probate attorney can help in several ways: Guiding You Through the Process An attorney can explain the probate process, help you understand your rights and responsibilities, and ensure all legal requirements are met. Managing Court Filings and Deadlines Probate involves numerous legal documents and deadlines. An attorney can handle these tasks, ensuring that everything is filed correctly and on time. Resolving Disputes If disputes arise, an attorney can provide representation in negotiations, mediation, or court hearings to protect your interests and work toward a fair resolution. Minimizing Costs and Delays With the guidance of a skilled attorney, you can often minimize the time and expense associated with probate, helping ensure the process goes as smoothly as possible. How The McKenzie Law Firm, LLC Can Help At The McKenzie Law Firm, LLC, we understand the complexities of the probate process and are committed to helping families navigate it with compassion and expertise. Whether you’re an executor needing assistance with your duties or a family member looking to understand your rights, our experienced probate attorneys can provide the support you need. If you have questions about probate in Colorado or need legal assistance, contact us today to schedule a consultation. We are here to guide you through the process and ensure your loved one’s wishes are honored.
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