Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation.
Detailed Answer
When a Colorado resident dies, the personal representative (formerly “executor”) must notify creditors and handle claims under the Colorado Probate Code (Title 15, Article 12). Failure to follow required steps can delay estate administration or expose the representative to personal liability. Below is a step-by-step overview:
1. Secure Appointment of Personal Representative
Before notifying creditors, obtain Letters Testamentary or Letters of Administration from the probate court. These letters authorize you to act on behalf of the estate.
2. Identify Known Creditors
Gather records of all potential creditors: credit cards, medical providers, utility companies and any entity to which the decedent owed money.
3. Publish Notice to Unknown Creditors
Colorado law requires publication of a Notice to Creditors once a week for six consecutive weeks in a newspaper of general circulation where the decedent resided at death. This public notice alerts unknown creditors to present claims:
4. Mail Notice to Known Creditors
Within two months after receiving Letters, mail a copy of the Notice to each known creditor by first-class mail at their last known address. Keep proof of mailing.
5. Allow Time for Claims to Be Presented
Creditors must file claims against the estate within:
- Four months after the first publication of the Notice; or
- Two months after actual receipt of mailed Notice (whichever is later).
Late claims may be barred unless the court grants an extension for good cause.
6. Review, Allow, or Disallow Claims
Examine each claim for validity. If you disallow a claim, send a written notice of disallowance to the creditor. A disallowed creditor has two months to sue the estate to enforce the claim.
7. Pay Allowed Claims
Pay all allowed claims in the order of priority set by statute (e.g., funeral expenses, administrative costs, secured debts, then unsecured debts). Use estate funds, and document all disbursements.
C.R.S. § 15-12-804 and C.R.S. § 15-12-806
8. Final Accounting and Distribution
After settling all claims, prepare a final accounting for the court. Once approved, distribute any remaining assets to beneficiaries under the will or Colorado’s intestacy rules.
Helpful Hints
- Maintain a detailed log of publication dates and mailing receipts.
- Keep originals and copies of all creditor claims and correspondence.
- Consult a probate attorney if complex claims or disputes arise.
- Verify newspaper circulation requirements with the local clerk’s office.
- Monitor deadlines closely to avoid barring valid claims.