How Much Does an Estate Have to Be Worth to Go to Probate in Colorado?

how much does an estate have to be worth to go to probate

Losing a loved one brings enough heartache without having to untangle legal processes just to settle their affairs.

In Colorado, estates valued over $80,000 generally must go through a court-supervised proceeding called probate to distribute assets to heirs.

While today most people want to avoid probate, historically, it served an important purpose. This court oversight protects against errors and fraud by ensuring everyone inherits according to the deceased’s wishes and the law. The good news is that Colorado has reasonable exemptions allowing small estates to transfer property more simply, without court orders.

Understanding where your loved one’s estate falls on the spectrum can help you know what to expect. In this post, we’ll explain Colorado’s probate process, key dollar thresholds that trigger probate, and how to avoid the process where possible.

What Exactly is Probate, and How Does it Work in Colorado?

Before looking at ways to avoid probate, it helps to understand what it is and how it works. Probate is the legal process for administering a deceased person’s estate and distributing their assets to heirs and beneficiaries. Its purpose is to pay off any debts and taxes owed by the estate and to ensure the remaining assets are distributed according to the person’s will or state law.

In Colorado, probate proceedings happen through the district courts in the county where the deceased person lived. An executor named in the will or appointed by the court inventories assets, pays debts and taxes, and eventually distributes whatever remains to the estate’s beneficiaries. The court supervises the process and has to approve the asset distribution plan.

Unlike some states, probate proceedings in Colorado are public records. That means anyone with a reason deemed appropriate by the court may request documents filed during probate, like detailed asset inventories. For some families, keeping these matters private is reason enough to explore probate avoidance strategies.

Alternatives to Probate in Colorado

Contrary to popular belief, not every estate has to go through the full, public probate process in Colorado. Several options exist for smaller estates to bypass probate and still properly distribute assets to heirs:

  • Affidavit for Collection of Personal Property – Estates worth less than $80,000 may file this affidavit to collect personal property like bank accounts or vehicles.
  • Trusts – Assets placed in a living trust don’t go through probate. Beneficiaries inherit according to trust terms.
  • Joint Ownership – Joint bank accounts, real estate, etc., pass directly to the surviving co-owner.

Which of these probate-avoidance strategies is right for you is something to discuss with a Colorado probate attorney.

Colorado’s Probate Thresholds and Requirements

Estates in Colorado with less than $80,000 in personal assets (cash, bank accounts, etc.) and no real estate are considered “small.” Small estates can use an affidavit procedure for heirs to collect assets without going through probate court.

Whether probate is required also comes down to property types and how they’re owned or titled.

Here are some key factors:

  • Only individually owned assets are subject to probate. Joint tenancy property passes directly to the co-owner until that co-owner passes away.
  • Life insurance, retirement accounts, pensions, etc., with properly designated beneficiaries, go directly to those beneficiaries.
  • Living trusts are designed to avoid probate, so assets owned by a trust aren’t part of the probate estate.
  • Real estate and business interests will likely have to go through probate if not jointly owned or held in a trust.

The bottom line is that the more assets are owned by living trusts or have beneficiaries, the lower the probate chances become. Work with an experienced estate planning attorney to arrange your assets to minimize the potential for probate.

How Property Ownership Impacts the Probate Requirement

Whether a particular property has to go through probate depends on how it was owned at the time of death. Here are some common examples:

  • Joint bank accounts – The surviving co-owner automatically inherits the deceased owner’s share. No probate is needed until the second person passes away. Note: beware of adding anyone other than your spouse to your bank account; their divorce or lawsuit could hand your money to someone else!
  • Solely owned house – With no co-owner or trust beneficiary, the home would likely go through probate to be transferred to heirs.
  • Life insurance – Policies with a named beneficiary pass directly to that person. No probate.
  • 401(k) and IRA accounts – These go directly to the designated beneficiary or beneficiaries if any exist.
  • Personal property – Items like jewelry, art, or collectibles must go through probate if not jointly owned or held in a trust.

The key is ensuring beneficiary designations and living trusts are set up to bypass probate whenever possible.

Tips for Avoiding Probate in Colorado

For those hoping to avoid probate, either through lifetime planning or inheritance strategies, here are some practical tips:

  • Add beneficiary designations – Know which of your retirement, bank, and investment accounts, as well as life insurance policies allow you to name beneficiaries. Fill out the beneficiary forms for each account and keep them updated.
  • Set up a living trust – Work with an experienced and qualified estate planning attorney to put a revocable living trust in place and transfer assets into it.
  • Take advantage of affidavits – Smaller estates can use Colorado’s streamlined affidavit procedures to collect assets.
  • Own real estate jointly – Having your spouse on the title as a joint tenant eliminates the need for probate until your spouse passes away. Consult your tax professional before adding anyone to the title as this could affect a once in a generation IRS step-up-in-basis tax exemption.
  • Gift assets ahead of time – Lifetime gifts reduce the size of the probate estate if done strategically.

While affidavits help some families, those with substantial assets should meet with an attorney to discuss using trusts and joint ownership arrangements to avoid probate.

Getting Professional Help with Probate and Estate Planning

With so much at stake, it pays to work with an experienced estate planning attorney when dealing with probate in Colorado.

At Hammond Law Group, we are 100% estate planning focused. For nearly two decades, we have guided Colorado families through asset distribution, inheritance claims, court proceedings, and more.

We offer compassionate legal guidance so you can honor your loved one’s wishes. Let us put our probate experience to work for you.

Contact Hammond Law Group today to schedule a consultation about your estate or probate matter. Take the first step toward gaining peace of mind.

Author Bio

Catherine Hammond is the CEO and founder of Hammond Law Group, a Colorado-based estate planning law firm she founded in 2005. With a strong focus on protecting families from the legal consequences of disability and death, she creates comprehensive estate plans that minimize taxes, costs, and government interference.

A native of Denver, Catherine completed her undergraduate studies at Coe College in Iowa, and her Juris Doctorate from the University of Denver College of Law in 1993, concentrating on estate planning, tax, and mediation. Catherine is a member of various professional organizations, including WealthCounsel, ElderCounsel, the National Academy of Elder Law Attorneys, the Colorado Springs Estate Planning Council, and the Purposeful Planning Institute. Beyond her legal expertise, Catherine provides transformational coaching to support clients and their families through life transitions.

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