FAQ: How to properly document and file receipts for payments to heirs or service providers in an estate (Colorado)

Short answer: In Colorado, a personal representative (executor/administrator) should create clear, dated, signed receipts and supporting documentation for every payment from the estate — whether to heirs, beneficiaries, or service providers — keep originals in the estate file, record each payment in an accounting ledger tied to the estate bank account, and file accountings or receipts with the court when required (for supervised administration or when the court or interested persons request an accounting). This ensures transparency, meets statutory duties, and reduces disputes.

Detailed Answer — What you must document and why (Colorado law)

As the estate’s personal representative you owe fiduciary duties to creditors and interested persons. Those duties include collecting assets, paying valid debts and expenses, and distributing the remainder to heirs or beneficiaries according to the will or Colorado intestacy rules. Maintaining clear records of every payment protects you from later claims and is required practice whether the estate is supervised by the court or handled informally.

Colorado probate law is found in Title 15 of the Colorado Revised Statutes. The statutes set out the duties of a personal representative and the procedures for supervision, inventories, and accountings. See Colorado Revised Statutes, Title 15 (Probate, Trusts, and Fiduciaries): Title 15 (CO Rev. Stat.). For practical court forms and filing requirements, review the Colorado Judicial Branch probate forms and instructions: Colorado probate forms.

Key record types you should create and keep

Receipt and release from heir or beneficiary — When you pay a distribution to an heir or beneficiary, get a signed receipt that identifies the estate, the amount and nature of payment (cash, check #, property description), date, and a statement that the recipient acknowledges receipt and, if appropriate, releases the personal representative from further claim on that distribution.
Vendor/service provider invoices and paid receipts — Keep the original invoice, the proof of payment (canceled check image, payment confirmation, credit-card receipt), and any signed acknowledgement from the vendor showing work was completed.
Estate bank account records — Maintain a dedicated estate bank account. Reconcile bank statements and attach each payment transaction to the supporting invoice/receipt and ledger entry.
Accounting ledger / transaction log — A running ledger that shows date, payee, purpose, check or transaction number, amount, and running balance. The ledger should link to the supporting documents.
Correspondence and approvals — Keep written approvals, court orders, or signed agreements authorizing distributions, especially for large or discretionary payments.

When and how to file receipts with the court

Whether you must file receipts with the court depends on whether the estate is in supervised or unsupervised (informal) administration and on any court orders or requests from interested persons.

Supervised administration: The court supervises the estate. File accountings and required reports with the court according to the judge’s schedule and local probate rules. Attach or make available supporting documentation (receipts, canceled checks, invoices) as the court requires.
Unsupervised administration: The personal representative is not under active court supervision. You still must keep full records and provide accountings to interested persons upon request, and the court may require a final accounting before closing. If beneficiaries ask for receipts, provide copies promptly.

For forms and instructions on accountings, inventories, and receipts used in Colorado courts, see: Colorado Judicial Branch — Probate Forms.

What a good receipt or voucher should include

Use a clear, consistent receipt template for all disbursements. Each receipt or voucher should include:

Estate name and case/court number (if any)
Date of payment
Payee name and contact information
Payor name (estate / personal representative)
Amount paid (numeric and written)
Purpose or description of payment (e.g., “final distribution — cash distribution per Will, Article III” or “roof repair — invoice #123”)
Method of payment (check #, ACH trace, cash)
Signature of recipient and printed name
If paying an heir/beneficiary: a statement confirming the payment is in settlement of that distribution and, if appropriate, a release/acknowledgement that they received the funds
Reference to attached supporting documents (invoice, court order, approval)

Suggested retention schedule

Keep original receipts, invoices, and bank records for the estate until the estate is closed and for several years afterward. Many fiduciaries keep records for at least seven years to protect against tax or creditor claims. If in doubt, consult a Colorado attorney or your accountant.

Hypothetical example (illustration)

Fact pattern: Mary is the personal representative for the estate of John Doe in Denver County. The estate pays $4,200 to a roofing contractor for repairs to a rental property and later makes a $20,000 distribution to Mary’s brother, an heir.

How Mary documents it:

Creates a folder for the roofing payment: contractor invoice, signed work completion certificate, copy of canceled check #1057, and a ledger entry showing the $4,200 reduction in estate cash.
Creates a distribution packet for the $20,000 payment: court file number at the top, copy of the will showing beneficiary entitlement, copy of the check (or wire confirmation), and a signed receipt and release from the brother stating he received $20,000 as his distribution and that he accepts it in full satisfaction.
Files required accountings with the court if the estate is supervised; otherwise, keeps the packets in the estate file and provides copies to interested persons on request.

Common pitfalls and how to avoid them

Mixing personal and estate funds — never use personal accounts to pay estate expenses. Always use a dedicated estate account and document transfers clearly.
Poorly described receipts — vague descriptions (e.g., “payment”) invite disputes; always state the purpose and reference invoices, will provisions, or court orders.
No signature/release from beneficiaries — failing to get signed receipts can lead to later demands or accusations of impropriety. Always get written acknowledgements for distributions.
Failing to follow court orders — if the court orders prior approval for distributions, get the order first and attach it to the receipt.

Helpful Hints

Open a dedicated estate bank account immediately and record every transaction there.
Use a uniform receipt template. Keep a consistent numbering system (receipt #, check #, invoice #).
Attach supporting documents (invoices, contracts, canceled checks) to every receipt and ledger entry.
Obtain signed receipts from heirs that include a release clause when making distributions.
For large or unusual distributions, get court approval or written consent from interested persons before paying.
Keep originals in the estate file; distribute copies to beneficiaries and file required copies with the court if supervised.
Keep backups (scanned PDFs) of all receipts and bank statements — store them securely for several years after closing the estate.
Consider obtaining a tax-identification number for the estate and consult an accountant on recordkeeping for tax returns.
If you expect contested claims or creditor disputes, consult a Colorado probate attorney early.

Where to find Colorado rules and forms

Colorado Revised Statutes, Title 15 (Probate, Trusts, and Fiduciaries): Title 15 CR.S. (CO)
Colorado Judicial Branch — Probate forms and instructions: Probate Forms (CO Courts)

Final note and disclaimer: This article explains common Colorado practice and points you to useful state resources, but it is not legal advice. Probate rules can vary by county and by whether the estate is supervised by a court. For guidance tailored to your situation, contact a licensed Colorado probate attorney or the clerk of the local probate court.