What is Probate Administration and Why is it Necessary?
In order for someone to give or sell something to someone else, they must have the legal authority to make the transfer. When a person is alive, they have the legal right to transfer something they own because they hold legal title to that property. But when a person dies owning something, who then has the legal authority to transfer the property to someone else? That’s the purpose of probate administration.
Probate is the process of appointing someone to stand in the shoes of someone who died (the “decedent”) for the purpose of transferring the decedent’s property to those entitled to receive it. The individual appointed by the court to administer the property is legally known as the personal representative, administrator, or executor. Upon appointment, the personal representative obtains the legal authority to act with respect to the decedent’s estate. An estate simply refers to the assets and liabilities of someone who has died.
To start a probate administration, the person seeking appointment as personal representative must petition the court to be appointed. Priority for who may seek appointment is established first by who is nominated in the decedent’s will. If none of the nominees in the will are willing or able to serve, the Colorado Probate Code dictates who has priority for appointment. The law first provides priority to the surviving spouse, if the spouse is entitled to receive property under the will. Priority is next provided to a person nominated in a designated beneficiary agreement, then to other named beneficiaries under the will. That same statute applies if the decedent died “intestate,” or without a will, and goes on to give priority for appointment to the decedent’s spouse, then to heirs entitled to receive property from the estate. If no estate is opened within 45 days of the decedent’s death, creditors of the deceased may apply to be named personal representative. When an estate needs to be administered but no suitable person is willing or available to do so, the court may appoint an administrator to carry out the administration.
Notice of the request for appointment must be provided to anyone entitled to receive property from the decedent, either through the will or in accordance with Colorado’s laws of intestacy when no will exists. Any interested party can object to the appointment of a personal representative petitioner by filing an objection with the court. If an objection is filed, a hearing will be held to determine whether the applicant should be appointed. If no objections are received, the court will approve the petition and issue an order and letters appointing the applicant. The order and letters are the legal documents that give the personal representative the authority to act for the estate with respect to the decedent’s property.
Once appointed, the personal representative’s general responsibilities are to collect the assets of the decedent, pay any necessary debts and taxes, and then distribute net estate assets to legal recipients. The decedent’s assets and liabilities must be detailed on an estate inventory, which reflects date-of-death values of the property. The personal representative is required to provide notice of the estate administration to creditors so creditors have the opportunity to file claims for payment against the estate. If creditors file valid claims within the required time period, the personal representative must pay the claims from estate assets before making distributions to beneficiaries.
Once all valid debts have been paid, including final taxes, the personal representative can distribute estate assets to rightful beneficiaries. Final distribution amounts are calculated and documented on the estate accounting, which tracks funds into and out of the estate. When distributions are made, personal representatives should obtain a signed receipt and release forms from beneficiaries, which indicates the beneficiary’s acceptance of the property and releases the personal representative from liability. Once all distributions have been made and the personal representative has fulfilled their legal duties, the personal representative can petition the court to close the estate.
This article examines the probate process and why it may be necessary in order to transfer property when someone dies. However, a probate administration is not necessary for everyone who dies. My article “When Isn’t Probate Necessary?” discusses situations where an estate administration may not be necessary to transfer the decedent’s property to rightful beneficiaries. That article is recommended reading before deciding whether to file for a probate estate administration.
Our law firm assists and advises personal representatives through all facets of the probate administration process. Colorado law imposes many duties on personal representatives, some of which are not intuitive. Our role is to guide personal representatives efficiently and effectively through probate administration, ensuring compliance with all legal requirements. We also assist beneficiaries and creditors with collecting the full amounts to which they are entitled from estates. Please contact me if you have questions or would like our assistance in any of these areas.