After someone dies, their property may pass to other people. It is common for adults to create estate plans designating specific beneficiaries to inherit their assets. Even if they do not plan ahead, certain family members become their heirs and can inherit their property.
However, in many cases, the assets that belonged to the decedent must go through the probate courts first. During probate proceedings, the personal representative of an estate has to communicate with interested parties. In addition to notifying beneficiaries and heirs, they also have to communicate with creditors and tax authorities.
Some of the property that belonged to the decedent may be vulnerable during probate proceedings. The Colorado probate courts may require the sale or liquidation of resources to help prepaid creditors or cover tax expenses. Only certain assets typically pass through probate court.
What resources are probate assets in Colorado?
Assets directly owned by the decedent
As a general rule, assets owned solely by the deceased individual are probate assets. They become the property of the estate and have to pass through probate court. The courts can oversee the distribution of those assets to beneficiaries or heirs in accordance with state law or the estate plan of the deceased person.
Probate assets can range from vehicles and real estate to personal property like furniture. Some of those assets may be vulnerable during probate proceedings if the decedent has significant outstanding debts or major tax obligations.
How can people keep assets out of probate?
Minimizing what property passes through probate is a common estate planning strategy. Testators establishing wills and other documents often want to protect as many of the resources from the threat of liquidation as possible.
An asset jointly owned with another person is not a probate asset. Financial accounts with transfer-on-death designations added are typically not probate assets. Resources gifted to other people or transferred to a trust are also excluded from the pool of probate assets.
People in different circumstances can use a variety of unique estate planning tools to diminish their probate assets and protect as much of their property as possible after they die. Taking the time to learn about probate rules can be beneficial for those thinking about the legacy they may leave after their passing.