First Steps If You’ve Lost a Loved One

There are many competing concerns after a loved one passes away. Your first priority should be care for the emotional needs of yourself and other family members. Take time for this concern and worry about the legal process in due course. Unless there is a known dispute between potential estate fiduciaries or beneficiaries or if there are minor children in need of guardianship, there are few potential emergent probate court issues related to a loved one’s passing. Legal proceedings related to a probate estate can wait until after you have addressed your emotional needs and final arrangements. Your most immediate concern is likely organizing the details in planning any religious or celebration of life ceremonies.

1. Organize a religious or celebration of life ceremony.

   1. If your loved one left a will and/or trust, they may have defined their personal wishes for a ceremony and disposition of their remains. Your loved one may have left instructions on funds set aside for final expenses or even a pre-paid funeral arrangements.

2. Provide for the immediate care and needs of minor children.

3. Provide for immediate care and needs of bereaved spouse or partner.

4. Analyze whether any legal process is needed.

 

Is court involvement needed?

Legal proceedings are only needed in certain situations. The court process to transfer title to assets and settle debts of a deceased person is called probate. Many assets can pass by beneficiary designation or joint titling without the need for the probate process. These items can include bank accounts, investment accounts, IRAs, 401k’s, jointly owned real estate titled with right of survivorship, and life insurance benefits. Probate is most often required to transfer ownership of solely-owned real estate. There are various other reasons to open a probate estate which will be analyzed by your attorney.

 

How are assets allocated to beneficiaries?

The question of who receives what assets after the owner passes away depends upon whether the decedent executed valid estate planning documents or not. If a deceased person executed a trust and placed all assets into the trust, then generally those assets pass to beneficiaries as described in the trust. The existence of a trust often means a probate case will not be needed. The assets can pass under a less formal, non-court process of trust administration. If a deceased person executed a valid will, then assets generally pass to beneficiaries as described in the will. If a deceased person did not execute a will or a will does not describe the disposition of some assets, the assets pass according to the law of intestacy. Intestacy laws are state laws which provide a backstop when there is no will describing who is the beneficiary of an asset. The intestacy laws act like default will provisions. They dictate the transfer of assets in a manner historically assumed to be what most people would do if they had prepared a will. A probate case can be opened whether a valid will exists or not. A probate case with a valid will is called a testate estate. A probate case without a will is described as an intestate estate. In both instances the process is mostly the same. The difference is that where a will exists it may provide differing rules for the process and distribution than the intestacy laws. Where no will exists, the intestacy laws must be followed in estate administration and distribution. In both scenarios, the fiduciary (personal representative or administrator) administering the estate is bound to follow the requirements for administration.

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Should we worry about the decedent's debts?

While beneficiaries are not liable personally for debts they do not share jointly with a decedent, the estate must pay the decedent's valid debts. Beneficiaries are often surprised to learn that notice must be given to creditors and valid claims must be paid before beneficiaries can receive anything. Much of the probate process is for the benefit of the decedent’s creditors. Except for a few exceptions, before assets can be distributed the decedent’s creditors must be provided notice and an opportunity to present their claim for payment from the estate. This includes paying any taxes remaining due for the year the decedent died and any back taxes still owed.

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It is important to consult with an attorney before initiating the probate process to avoid the waste of estate assets on invalid creditors. Failure to identify risks related to filing a probate case can subject an estate to unnecessary creditor claims, waste of estate assets, and even personal liability for the personal representative or administrator.

 

Ancillary Probate

An ancillary probate is required when a real estate assets exists in Colorado but a probate case is already open in another state. A probate case may be appropriately filed outside of Colorado when a decedent is a resident of another state, but ancillary probate filings in Colorado are needed to transfer real estate existing in Colorado. If no probate proceeding exists in another state, probate must be opened in Colorado. Ancillary probate appoints a Domiciliary Foreign Personal Representative (DFPR) to act in Colorado. The DFPR must be the same individual appointed as PR in the foreign state. If the foreign PR is no longer able to act or the foreign probate case is closed, the probate case in the foreign state may need to be reopened.