Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.
Detailed Answer
Why Life Insurance Proceeds May Enter Probate
Life insurance proceeds normally bypass probate when a valid beneficiary is named. Under Colorado law, if the insured did not designate a beneficiary or the named beneficiary predeceased the insured and no contingent beneficiary exists, the insurer treats the estate as the beneficiary. See C.R.S. § 10-3-1116.
Step 1: Confirm the Lack of a Valid Beneficiary
Request a beneficiary designation form or ledger from the insurance company. Ask for a beneficiary statement in writing. If no valid beneficiary appears, the insurer must pay proceeds to the decedent’s probate estate.
Step 2: Open a Probate Case
File a petition for probate in the district court of the county where the decedent resided. Under the Colorado Probate Code, a personal representative has authority to collect estate assets, including life insurance proceeds. See C.R.S. § 15-10-401.
Step 3: Notify the Insurer and Creditors
Once appointed, your personal representative must present a certified copy of the Letters Testamentary or Letters of Administration to the insurer. The insurer must then pay the policy proceeds into the estate account. The representative should also publish and mail creditor notices in compliance with C.R.S. § 15-12-801 et seq.
Step 4: Petition for Distribution
Prepare and file a petition for final distribution. Attach a proposed distribution schedule reflecting intestate heirs. The court will review your petition and issue an order directing how to pay the proceeds to the rightful heirs.
Intestate Distribution Rules
When proceeds flow into the estate, Colorado’s intestate statutes determine heirs. Key provisions include:
- C.R.S. § 15-11-101: Definitions of spouse, children, parents.
- C.R.S. § 15-11-201: Order of distribution (spouse, descendants, parents, siblings).
The court allocates proceeds according to this hierarchy if the decedent died without a valid will.
Helpful Hints
- Gather policy documents and correspondence before filing probate.
- Consult Colorado’s probate clerk for local filing requirements.
- Keep detailed records of all notices and communications.
- Use a probate attorney if estate assets exceed exemption limits or if heirs dispute distribution.
- Check for unpaid debts; life insurance proceeds may be subject to estate creditor claims.
Following these steps helps ensure life insurance proceeds without a designated beneficiary pass through Colorado probate and reach the proper heirs.