Colorado Probate: Devising, Distributing, or Selling a Decedent’s Real Property

When acquiring real property, it is important to consider your plans for the property following your death, and make estate planning decisions accordingly.

Many factors determine what will happen to property in the event of an owner’s death, including the type of property; the way the owner holds title to the property; whether the decedent left a valid will; and the laws of real property succession in the State of Colorado.

Generally, when a property owner in Colorado dies, his estate must go through probate. Probate is the court-overseen process by which a personal representative settles a decedent’s affairs, including, among other things, collecting assets, paying debts, and distributing property that does not transfer outside of probate to a decedent’s rightful heirs.

The Colorado Probate Code (Title 15, Articles 10-17 of the Colorado Revised Statutes), adapted from the Uniform Probate Code, governs the probate process for all applicable assets a Colorado property owner leaves behind. Non-probate assets, or property that transfers outside of the probate process, include joint tenancy (survivorship tenancy) assets, assets held in trust, and assets transferrable by a recorded beneficiary deed. Small estates probate is available for owners of personal property below a certain dollar amount.

After the decedent’s death, petition to or application for probate must be filed in the district court of the county where the decedent resided at the time of death (if the decedent was not a Colorado resident, then in the Colorado county where the decedent owned property). The petitioner is generally the person designated as the personal representative by the decedent’s will, or the person with priority to serve when there is no will or no personal representative designation has been made in the will. Ancillary probate may be required for additional real property interests held in Colorado, but only if original probate is open and active in another state.

To open probate proceedings in Colorado, apply to the registrar for informal probate, or petition the court for formal probate. Informal probate is typically chosen when the decedent’s will is uncontested, or, if there is no will, there is agreement among heirs concerning who should be appointed personal representative. In informal probate, the registrar appoints a nominee as the estate’s personal representative (the nominee must have priority of appointment). Consult a lawyer to assess your specific situation and recommend the best plan of action.

The court grants letters evidencing the personal representative’s appointment and authority. These are either letters testamentary (when decedent dies testate, or with a will) or letters of administration (when decedent dies intestate, or without a will). To distribute or sell real property on behalf of the estate, the personal representative uses his or her letters of appointment. The letters also need to be on record in order to sufficiently pass title (see Colorado Title Standards 11.1.6, 11.1.8).

There are multiple terms for transfers of property by a personal representative. The first is by devise, where the devisee is a person designated by the decedent’s will to receive property (C.R.S. § 15-10-201(13)). The second is by distribution, where a distributee is a person receiving a decedent’s property from a personal representative other than as a creditor or purchaser (§ 15-10-201(14)). In addition, personal representatives may execute a deed of sale to a purchaser.

To transfer title to real property to a devisee or distributee, the personal representative executes a personal representative’s deed of distribution. To transfer title to a purchaser, the personal representative executes a personal representative’s deed of sale. Bear in mind that the powers of the personal representative may be limited by the letters regarding sale of real property, or that sale of real property may require an order from the court.

Personal representative’s deeds in Colorado are bargain and sale deeds (a statutory deed at § 38-30-115). A bargain and sale deed does not warrant against defects in the past chain of title, and is commonly used by fiduciaries, or persons entrusted to hold assets for the benefit of another. The personal representative is a fiduciary of the estate because he represents or “stands in” for the decedent, and may have no knowledge of any title defects prior to his assuming fiduciary duties.

The requirements of a personal representative’s deed are the same as any other document conveying an interest in real property, except that the personal representative’s deed contains information regarding the probate process, including the decedent’s name and date of death, the court and county overseeing probate and the case number, and the personal representative’s name and date of appointment. Personal representative’s deeds of sale are differentiated from personal representative’s deeds of distribution in that they list a consideration paid for the transfer, with accompanying documentary tax stamps. Note that additional documentation may be required.

Before recording, the personal representative must sign the deed in the presence of a notarial official. Deeds are submitted for recording in clerk/recorder’s office of the county where the subject property is located. Contact the county clerk/recorder with any questions about recording.

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Personal representative’s deeds cannot be prepared by a title company, so consult a probate lawyer and refer to the Colorado Probate Code and the Colorado Title Standards. The probate process is nuanced, and requirements vary from case to case. Mistakes in estate administration may open the personal representative to liability. The information provided in this article is not exhaustive and is not meant as a substitute for legal advice.