Estate Planning and Probate
It's important to note that assets such as life insurance, IRAs and most retirement plans are not controlled by a person’s will or revocable living trust.
A will is a document that operates after a person’s death to distribute the person’s assets and nominates persons to act as fiduciaries to the estate. A will directs how a person’s estate will be distributed upon the person’s death. The person making a will (also known as the testator) may provide for specific distributions that take into account the different needs of the individuals the testator wants to benefit. The testator can also protect these distributions if they are to be made to a minor or to inexperienced, incompetent or irresponsible beneficiaries through the use of a trust in the will. A will also allows the testator to nominate the person he or she wants to administer the person’s estate (known as the personal representative) or serve as trustee or guardian of minor children. Finally, a will gives a person the opportunity to grant the personal representative greater powers or discretion to administer the estate than that provided by state law.
Some people use a revocable living trust instead of a will to dispose of their property upon death. Assets transferred to the revocable living trust before the settlor’s death are not subject to probate and can be distributed upon the settlor’s death without the necessity of probate. However, the trust only controls assets which have been transferred to the trust during the settlor’s lifetime and, therefore, a person should still have a will to dispose of any assets which—either intentionally or inadvertently—are left out of the trust.
It is also important to note that assets such as life insurance, IRAs and most retirement plans are not controlled by a person’s will or revocable living trust. Rather, these assets are distributed according to the written beneficiary form which the owner completes. Finally, the manner in which an asset is titled can determine whether or not the asset will be subject to a person’s will or revocable living trust. For instance, assets titled in joint tenancy automatically pass to a surviving joint tenant regardless of what the person’s will may provide. Therefore it is critical that a person consider such issues when contemplating the disposition of his or her estate.
Probate in Colorado. Probate, in its broadest sense, is the process by which a person’s will is determined to be valid, the person’s final debts are paid and his or her assets distributed. When a person dies leaving a valid will, the person dies testate. In this case, the distribution of the person’s estate is governed by the terms of the will, subject to certain statutory rights of the surviving spouse.
If a person dies without a will, the person dies intestate. In such a case, the person’s estate is distributed according to the laws of intestacy in effect at the time of death. In other words, the state directs how the estate is distributed.
In Colorado, probate can be handled either formally (with active court supervision and intervention) or informally (without active court intervention). Most estates in Colorado are handled informally and the court is not actively involved in the probate process unless asked to do so by an interested party.
Estate Planning. Estate Planning refers to the process by which a person plans to dispose of his or her assets upon death. The centerpiece of most estate plans is a will and/or revocable living trust.
Disclaimer: The information contained on this website is NOT a substitute for legal advice and no representations are made as to the accuracy of this information. Individuals seeking individual advice about estate planning and probate are STRONGLY encouraged to obtain legal advice. Many of the terms used herein have a specific legal meaning which may be different from the common usage of these terms.
MORE INFORMATION:
Colorado Bar Association
Colorado Courts Home Page
