Areas of Practice:

Elder Law
Estate Planning
Wills and Trusts
Estate Administration
Trust Administration
Guardianships
Conservatorships
Real Estate

What is Estate Planning?

In the State of Colorado, anyone who owns more than $50,000 or an interest in real estate must go through probate, regardless of whether they have a will or not.  Many people are unaware of this fact and believe if they have a will they will not have to open a probate estate with the Colorado courts.

 This general rule has many exceptions.  Property owned jointly, property disposed of by beneficiary designations, accounts with payable on death or transfer on death designations, property owned by a trust and real estate in which the grantor has executed and recorded a beneficiary deed are excepted from the general rule.  Property disposed of by these methods are not subject to probate.  Because not all property can be disposed of by these methods, a person should always have a will or trust document.

Estate planning is a planning technique whereby a person can guarantee that their assets get to the people they want them to go to in the best way possible.  For many people this means without going through probate.  But there are advantages and disadvantages regarding our probate system and it should not always be avoided.  That is why it is very important to seek the advice of a knowledgeable attorney who can help you with estate planning instead of using a form or writing up your own will or trust.

There are two main documents which people can use to dispose of their assets at their death.  One is a will and the other is a trust.  Of course there are many different kinds of trusts, some of which can be contained within a will, but for the purposes of this article I will focus on basic wills and trusts.


If a person has a will as their main dispositive document, they are required to open up an estate with our Colorado courts and to go through the system called probate.  Probate is merely a process whereby your assets are transferred to your heirs or beneficiaries with court approval.  Probate can be unsupervised or supervised, formal or informal depending on the complexity of your estate and whether or not heirs, beneficiaries and or creditors are contesting issues.  A probate estate can be opened within 10 days after a decedents death. 

 

A personal representative, the person in charge, is immediately appointed to gather the assets and pay bills.  Creditors have four months to come forward with claims. If things go smoothly, assets can be disbursed and the estate can be closed after six months from the date the estate is opened.  If matters are more complex a personal representative can ask for additional court supervision and take as long as they need to settle the estate.

If a person has a living trust as their main dispositive document, they are not required to open an estate or seek court approval.  A trustee will be the person in charge of the trust and their job will be similar to the personal representative in that they must gather the assets, pay bills and distribute the assets pursuant to the trust document. 

There is no four month limit on the time allowed for creditors to come forward, this is one disadvantage of a living trust in my opinion.  A trustee can manage the trust immediately, they do not have to wait 10 days after the decedent has died.  This is one advantage to having a living trust.  Both a will and a trust can be challenged on the grounds of incompetence, undue influence and or problems with the document.

Both wills and trusts have many other advantages and disadvantages.  My next two articles will discuss hypothetical cases where one person had a trust where a will would have worked better and a person who had a will where a trust would have worked better.

 


The Henry Law Office Building
3843 West 73rd Avenue
Westminster, Colorado 80030

Open 8:30-4:30 Monday through Friday
Ph: 303-657-0360
FAX: 303-429-2552