When a loved one passes away, it can be enormously difficult to cope with the emotions and lifestyle changes the follow. There can also be numerous details to address, from planning a funeral to notifying others.
However, people often fail to recognize the legal repercussions associated with a person’s passing. In the weeks and months that follow, the decedent’s estate will need to be distributed. Whether that includes probate or not will have a significant impact on this experience.
What is probate?
Probate is the legal process that can be necessary to transfer assets after death. There are three different types of probate: informal, supervised and unsupervised. Depending on the type of probate an estate goes through, it could prove to be quite complicated.
There could be creditor problems, disputes between beneficiaries and complications locating assets. Further, an appointed personal representative will need to file legal paperwork and manage the estate property. And in some circumstances, a judge may need to approve every action.
If probate is necessary, it has the potential to become costly, time-consuming and possibly combative. As such, many people hope to avoid probate.
Options to avoid probate
It can take some careful planning to sidestep the probate process in Colorado. One way to do this is to transfer property and assets to a trust. Property held in a trust generally does not go through probate for distribution.
Another option is to leave a small estate. In this state, estates with no real property and less than $70,000 do not need to go through probate.
Yet another option is to assign beneficiaries to bank accounts, life insurance policies and retirement accounts to ensure these transfer directly.
If you cannot avoid probate, you can at least make it easier for your loved ones. To do this, prepare a valid, updated and enforceable will detailing your wishes. Talk to your family about what you want and don’t want to minimize any confusion or conflicts that could arise. Take the time to make a comprehensive list of your assets and liabilities.
These and other estate planning options can make it easier for your loved ones to manage the legal details when you are gone.