On April 30, 2016

How CO laws define small estates

How CO laws define small estates

Small estates, according to Colorado law, are estates that are not exclusive to real estate assets and that are valued at less than $50,000.

When estates qualify as being “small” in the eyes of the law, the assets held by that estate can generally be transferred to the beneficiaries via a small estate affidavit. In other words, a complicated probate process will not typically be necessary to settle small estates in Colorado.

Understanding this can be important to making the right plans now to minimize your loved one’s future costs and stresses – especially if you want to help them avoid probate altogether.

How to Reduce the Size of Your Estate

If your estate’s holdings are valued at more than $50,000, there are somethings you can do position your estate to qualify as “small,” including (but not limited to):

  • Using “payable-on-death” designations – For assets like bank account and retirement account holdings, naming a beneficiary via the payable-on-death (POD) or transferable-upon-death (TOD) designations is one way to reduce the assets held by your estate. In fact, by using PODs/TODs, you can make sure that certain loved ones have immediate access to these funds/assets, effectively preventing them from having to pass through probate (as there will not be a need to validate or oversee the transfer of these assets).
  • Setting up trusts – Another option for reducing an estate’s holdings is to set up and fund trusts. These trusts, which can go into effect either during a testator’s life time (i.e., living trusts) or following a death (irrevocable trusts), can be funded with various types of assets or personal property, including (but by no means limited to) real estate, cash, stocks, bonds, business interests, family heirlooms, motor vehicles, etc. And any asset transferred to the trust will not have to pass through probate – and will not be used to calculate the value of the estate.
  • Giving now – In addition to PODs/TODs and trusts, giving certain items away now, rather than waiting until a death, is another option for reducing an estate’s holdings and helping it to qualify as a small estate in Colorado.

Given that the best options for reducing the value of your estate will depend on the details of your situation and financial holdings, it’s important to consult an experienced lawyer to find out your best options for limiting your loved ones’ future probate obligations.

Contact a Denver Probate Attorney at JR Phillips & Associates, PC

For experienced help developing or administering an estate plan – or for exceptional representation in Colorado probate, you can turn to the Denver probate attorney at JR Phillips & Associates, PC. We provide a thoughtful, comprehensive approach to our clients’ estate planning, elder law and other legal needs, and we take pride in helping each of our clients and their families find the best solutions for them.

To discuss your estate planning and/or probate options and needs with an experienced lawyer, call our firm today at (303) 741-2400 or email us using the contact form at the top of this page.

From our offices in Denver, we serve clients throughout the southwest and southeast Metro Area, including (but not limited to) people in Highlands Ranch, Littleton, Castle Rock, Parker, Aurora, Greenwood Village and Englewood.

Categories: Estate Administration, Estate Planning, Probate, Probate Litigation