Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney in Colorado for guidance on your specific situation.
Detailed Answer
Navigating probate in Colorado often involves ongoing bills—mortgage, utilities, insurance—and final estate expenses like funeral costs and administration fees. A personal representative (PR) handles these obligations under the Colorado Probate Code. Here’s how the process typically works:
1. Appointment of Personal Representative & Letters Testamentary
First, the court appoints a PR and issues Letters Testamentary (or Letters of Administration). These documents authorize the PR to act on behalf of the estate, including accessing assets and paying debts.
2. Open an Estate Bank Account
After appointment, the PR should open a dedicated estate checking account. Deposit all cash, checks, and distributions into this account. This keeps estate funds separate from personal finances and simplifies accounting.
3. Priority Payment of Expenses and Bills
Under Colorado law, the PR must pay administration expenses before distributing assets to beneficiaries. Key statutory priorities include:
- Funeral and burial expenses (C.R.S. § 15-12-803): leg.colorado.gov/15-12-803
- Administration costs and attorney fees (C.R.S. § 15-12-805): leg.colorado.gov/15-12-805
- Creditor claims filed timely after notice (C.R.S. § 15-12-801): leg.colorado.gov/15-12-801
The PR should track due dates and payments for:
- Mortgage or rent
- Homeowner’s and auto insurance
- Utilities (gas, electricity, water)
- Property taxes
- Other recurring subscriptions or maintenance fees
4. Notice to Creditors and Claim Deadlines
The PR must publish a notice to creditors and mail notices to known creditors. Claims generally must be filed within four months after the first publication (C.R.S. § 15-12-801). Valid claims—secured or unsecured—must be reviewed and paid in the statutory order.
5. Interim Distributions & Court Approval for Asset Sales
If estate cash is low, the PR can request interim distributions or court approval to sell non-exempt assets. For example, the PR might sell stocks or real property under C.R.S. § 15-12-1001 (leg.colorado.gov/15-12-1001) to cover ongoing bills and administration costs.
6. Tax Filings and Final Accounting
The PR must file the decedent’s final federal and Colorado income tax returns and, if the estate exceeds federal or state thresholds, an estate tax return. After paying debts and expenses, the PR submits a final accounting to the court and requests distribution of remaining assets to beneficiaries.
Helpful Hints
- Open an estate bank account immediately after appointment to keep funds organized.
- Maintain a detailed ledger of expenses, bills paid, and receipts.
- Publish the creditor notice promptly to establish deadlines under C.R.S. § 15-12-801.
- Monitor ongoing bills closely—utilities shutoffs can damage property value.
- If estate liquidity is low, seek court approval to sell assets or request interim distributions.
- Consult an estate attorney for complex assets, tax issues, or contested creditor claims.