Probate & Estate Administration FAQ
What is Probate?
Probate typically refers to the activities involving the Probate Court. The Probate Court handles all matters to do with estate administration, guardianships, conservatorships, proof of wills, and trust administration. In the context of administration of a person’s estate, the Probate Court appoints a personal representative for a Decedent’s estate, can oversee the actions of the personal representative to administer the estate, and in unusual cases can even make a determination as to who the Decedent’s heirs are and their shares of the estate’s assets.
Do I become a person’s Personal Representative the moment they pass away?
No. You may be nominated in a person’s will as their personal representative (also known as an executor or administrator of an estate), but you do not automatically become one. A court has to approve of your appointment as personal representative and officially appoint you for you to become one.
What is the difference between Probate and Non-Probate assets?
Probate assets are assets that are controlled by a person’s will after they die. In contrast, non-probate assets are not controlled by a person’s will. Common examples of non-probate assets would be when an annuity or life insurance policy has a beneficiary or when a house or bank account is owned in joint tenancy between two or more people. It is important to recognize this difference because it affects what property actually is controlled by the person’s will or trust after they pass away.
What is the difference between Joint Tenancy and Tenants in Common?
Joint tenancy with right of survivorship means that whoever outlives the other gets full title to that asset. Tenants in common means that when one of the owners dies, his or her share of the asset goes to his heirs. For example, if two individuals are tenants in common on a house and one of them dies, the deceased individual’s share in the property goes to his heirs and the living owner keeps his own share in the house.
What is Intestacy?
Intestacy is when a person does not have a will or trust to tell others how he or she wants his assets divided after he dies. When a person dies “intestate” in Colorado, we have laws that tell us how that person’s property will be divided. However, the intestacy laws default to a person’s blood relatives and do not fit everyone’s situation.
When will I get paid my inheritance?
Estate administration is a process. The Personal Representative is responsible for collecting all the property of the person who passed away, paying debts that the person had or expenses of the administration of his estate, making sure all necessary income and estate tax returns are filed and taxes paid, and generally only after that can beneficiaries be paid their inheritance. Sometimes it can take a year or more. Be patient as the personal representative does his job to complete the many tasks required of him under the law.
What is the difference between Formal and Informal Probate?
Formal probate generally requires more notice to the heirs and beneficiaries of an estate and more court oversight of the Personal Representative’s actions than informal probate does. Informal probate does not require that interested persons, such as family members and other beneficiaries of the Decedent’s estate, be given notice of the appointment of the personal representative until after appointment. Formal probate does require notice before appointment, and if a person objects to the appointment, a hearing will be held. An inventory and accounting are required to be filed with the court in formal probate but do not have to be given to the court in informal probate. If an estate needs even more oversight than formal probate requires, administration of an estate can be “supervised” by the court; however, “supervised” administration is rarely requested or needed.
What does it mean to be a Personal Representative?
A personal representative is generally responsible for collecting and inventorying the assets of the person who has passed away (the “Decedent”), arranging for disposition of the Decedent’s body, settling or challenging the Decedent’s debts, paying from the Decedent’s estate any income or estate taxes owed by the Decedent, distributing the Decedent’s personal property, such as jewelry or furniture, transferring or selling the Decedent’s real property, and then distributing the Decedent’s net estate to his heirs. The court also requires that the personal representative submit various forms and paperwork to satisfy the court that the Decedent’s estate was administered properly. This may include a formal inventory of the Decedent’s property or an accounting.
Is a Power of Attorney or a Living Will effective after a person has passed away?
No. Powers of attorney and living wills are only effective when a person is alive. When a person dies in Colorado, only their will, trust, or Colorado’s laws of intestacy control what happens to their assets.
What is a Medicaid lien?
When a person receives Medicaid benefits, Medicaid and the Colorado Department of Health Care Policy & Financing can try to recoup the funds that the state of Colorado paid on a person’s behalf during his or her lifetime from that person’s estate. If the individual who died was on Medicaid during life, often their largest asset is their home. Medicaid will often put a lien on that individual’s home after they pass away to try to recover the costs of the person’s Medicaid care.