Detailed Answer
Disclaimer: This article is for informational purposes only and does not constitute legal advice. You should consult an attorney licensed in Colorado for guidance specific to your situation.
1. Gather and Inventory Estate Assets
Begin by identifying all assets owned by the decedent at death. This typically includes bank accounts, real estate, investments, personal property, and retirement accounts. Under Colorado law, the personal representative must file an Inventory and Appraisement within four months of appointment (C.R.S. §15-10-401).
2. Identify and Quantify Debts and Fees
Next, list all valid debts, including mortgages, credit cards, medical bills, and funeral expenses. The personal representative must publish notice to creditors and allow at least 120 days for claims (C.R.S. §15-12-805). Approved debts, as well as probate costs and attorney fees, must come out of the estate’s general assets.
3. Pay Debts, Costs, and Fees
After the claims period closes, pay debts in priority order. Colorado law requires payment in this sequence: administrative costs (court and personal representative fees), funeral expenses, medical expenses, and then general creditors (C.R.S. §15-12-805). Keep detailed records of each disbursement.
4. Calculate Remaining Estate Assets
Subtract the total approved liabilities (debts, costs, and fees) from the gross estate assets. The result is the net estate. For example, if the estate holds $500,000 in assets and debts/fees amount to $150,000, then the net estate equals $350,000.
5. Allocate Net Estate to Beneficiaries
Distribute the remaining assets according to the will’s terms or, if there is no will, under Colorado’s intestacy rules (C.R.S. §15-11-101). Ensure you document receipts from beneficiaries.
Helpful Hints
- Maintain organized records—keep copies of all invoices, statements, and receipts.
- Use a spreadsheet or estate-administration software to track assets and liabilities.
- Confirm deadlines for creditor claims and statutory filings with the court.
- Consult an accountant if the estate holds complex investments or closely held business interests.
- Review beneficiary designations on non-probate assets, like life insurance and retirement accounts.