Disclaimer: This information is for educational purposes only and does not constitute legal advice.
Detailed Answer
Under Colorado law, an executor must verify that the estate holds sufficient funds before satisfying any creditor claim. This duty helps protect the executor from personal liability and ensures that payments follow the legal order of priority.
1. Collect and Inventory Assets. Begin by locating bank accounts, investment portfolios and other liquid assets. Record each asset’s value. Colorado Revised Statutes require an executor to take possession of and inventory estate property (C.R.S. 15-12-709).
2. Publish Notice to Creditors. After appointment, publish a notice in a local newspaper and send direct notices to known creditors. Creditors then have four months to file claims under C.R.S. 15-12-801.
3. Evaluate Available Funds. Review bank statements, cash on hand and net proceeds from asset sales. Subtract estate expenses and taxes. The net remaining balance represents the pool available for creditor claims.
4. Pay Claims According to Priority. Colorado law ranks payment order. Secured and funeral claims get priority over general unsecured debts. See C.R.S. 15-12-805 for the full priority scheme. If funds are insufficient, pay each class pro rata.
Failing to confirm adequate funds before payment can expose you to personal liability for wrongful distribution. Always reconcile each disbursement with your estate accounting records.
Helpful Hints
- Open a dedicated estate bank account to track receipts and disbursements.
- Keep detailed ledgers of all asset valuations and transactions.
- Send creditor notices via certified mail and retain proof.
- Work with a probate accountant or attorney for complex estates or disputes.
- Consult Colorado Revised Statutes Title 15, Article 12 regularly to meet deadlines and procedural rules.