For many, fear of probate still ranks right up there with fear of snakes and spiders.
However, at least in Colorado, probate — administering an estate — is logical, expeditious and not financially burdensome. A personal representative is appointed to administer the estate. The personal representative then rounds up the decedent’s assets; pays the decedent’s bills; and distributes what is left, either under the terms of a will or pursuant to the laws of intestacy (the laws that govern distribution if there is no will).
In most cases, the appointment of a personal representative and the determination that a will is valid are dealt with through a simple application reviewed by an administrative officer of the probate court, with no need to bother the judge. Furthermore, for small estates where the value of the decedent’s assets, less liens and encumbrances, doesn’t exceed a certain amount and where no real estate is involved, Colorado law provides a way for an estate to be administered that doesn’t require any involvement by a court.
The small estate size limitation is $70,000 and changes annually based on a cost of living index. Here’s how this process works:
Someone who can properly claim to be a successor in interest to the decedent (that is, someone who stands to inherit), or who has been given authority by successors in interest to act on their behalf, fills out an affidavit, given the name Collection of Personal Property by Affidavit. This document states, under oath (and therefore penalty of perjury if the oath is false), that the net value of the estate does not exceed the current small estate limit; the decedent has been dead at least 10 days; and no court proceedings affecting the estate are pending.
The affidavit will list all those claiming to be a successor in interest to the decedent and their respective share of the estate.
The person signing the affidavit can then use it to take possession of the personal property assets of the decedent, including money in bank accounts, and can sell assets, transfer car titles and otherwise go about the business of administering the estate. In effect, this procedure allows someone to act like a personal representative without having to be appointed as such by a court.
Although the statute authorizing use of the small estate affidavit doesn’t speak to this, somewhere along the way, the decedent’s debts need to be paid. Otherwise, creditors could force the administration of the estate back into court.
The statute creating the small estate process protects those who deal with the person signing the affidavit. They are released from liability “to the same extent as if they dealt with a personal representative.” And, there is no duty on their part “to see to the application of the personal property” or “inquire into the truth of any statement in the affidavit.”
The Collection of Personal Property by Affidavit document is an official Colorado Judicial Branch form — JDF 999 — and the form comes with an official set of instructions, JDF 998. Both can be found at the Judicial Branch website, www.courts.state.co.us/Forms.
Notwithstanding the seeming simplicity of the small estate process, there are still ways a person signing the small estate affidavit, and using it to collect and distribute assets, can get in trouble. Therefore, hiring an attorney experienced in estate administration to assist in the process will be money well spent, and this cost can be paid out of the estate.
Jim Flynn is with the Colorado Springs firm of Flynn & Wright. You can contact him at firstname.lastname@example.org.