A Real Estate Guide to Probate and Estate Sales in Colorado
WHAT IS PROBATE?
Probate is a process to collect assets and distribute them to heirs. This process allows for a restricted amount of time for collectors to make claims against the estate. This process also settles the assets from future attacks.
Disclaimer: I am not an attorney of any kind. Facts can vary greatly. You should not consider anything herein to be legal advice. I make no warrants or claims regarding the accuracy of the information herein. This is simply my effort for straight talk on a mystifying subject to help those in need. Use your judgment to seek independent legal counsel or tax counsel for any questions related to this material. I can recommend a probate attorney or tax attorney. To be clear - Nick Crothers or Nick Crothers Real Estate do not provide legal or tax advice.
WHEN IS PROBATE REQUIRED?
Probate in Colorado is required when the value of personal property owned by a decedent is more than $70,000 - OR - the decedent owned ANY real property (of any value) in Severalty or as Tenants in Common. Probate is not applicable if the deed was held as Joint Tenants, and there is a surviving tenant.
QUICK RULES OF THUMB: IS THE PROPERTY IN THE DECEDENT'S NAME?
- Tenants in Common or Held in Severalty > Probate
- Joint Tenancy > No Probate (Interest goes to the surviving tenant)
- Beneficiary Deed > No Probate (Interest goes to the beneficiary)
- Deed in Name of Trust > No Probate (Trust continues to live on, e.g., Living Trust and the property continues to be held by the trust)
- Personal Property owned by the decedent is more than $70,000 > This property will go into Probate
WHERE IS PROBATE HANDLED?
Probate is handled at the County Court System. If this is a large county, there will be Probate Courts. If it is a small county court system, it may be handled in the general court system, in which case any county judge may oversee it.
DO YOU NEED AN ATTORNEY?
An Attorney is NOT necessary for all but one step - But it IS recommended. An Attorney specializing in probate will very likely get it all sorted out the first time. Please note: In Colorado, Attorneys can only charge a flat fee or an hourly fee. They cannot charge a fee based on a % of the estate.
WOULD YOU LIKE TO LEARN MORE?
If you would like to learn more from my understanding of this process, please call or text me at (720) 955-8337 - or fill out the form at the bottom of this page.
PROBATES, ESTATES, AND REAL ESTATE
Many times, a loss of life will render the utility of a Real Estate Property to be useless for the beneficiaries, personal representatives, and heirs of an estate. The remaining loved ones are in mourning, and the process of going through probating or executing the duties of a trust is less than enjoyable, to say the least. Still, there is a duty to be done to ensure the legacy of the lost loved one is honored by handling their assets with professionalism and performing the duty so that legacy can be honored by ensuring the estate is handled properly and the assets get to the beneficiaries correctly and timely.
There can also be tax advantages to liquidating these assets near the date of death of a loved one. These tax advantages come in the form of a Step-Up Cost Basis that occurs upon Death. The asset’s Cost Basis steps up to Market Value at the time of death, allowing the beneficiaries to sell it at market value and avoid taxable capital gains from the sale. There are no or limited taxable gains under the tax law since there are no gains - Market Value and the Sold Value are near the same. This works with Real Estate as well as Stocks and other investments. Again, contact a Tax Attorney for professional advice on the tax code.
Further, avoiding the stress of maintaining a vacant home through a change in seasons, paying utilities on a vacant home, paying HOA fees, or continuing property taxes can be further motivation to sell a home quickly after death.
Due to all these factors - and the reality that many times a home of an older individual sufficed for that individual in a current state for many years or decades, and as a result has fallen out of being on-trend for the market - a Personal Representative of the Probate - or Trustee of a Trust - may decide that selling the home as-is will result in quite a bit of compromise below the market value of the house. Every situation and estate is different. Many times there can be many decision makers and influencers involved. I have worked very hard to develop partnerships for various resources that can serve the full range of options. Here is a range of options for a Trustee or Personal Representative dealing with Real Estate as part of an estate:
