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The Legal Summary: Heirs' Property in Colorado
Inheritance Laws
When a person dies owning real estate, their heirs inherit their real estate and other assets. Heirs are determined by a will and/or the state law. Transfers through inheritance, whether through a will or state law, typically creates heirs’ property- multiple family member co-owners.
Sources: HeirShares, Denver Bar Association, Smart Asset
Small estates (under $50,000 and no real property).
Whether or not you have a will when you die, if you have $50,000 or less in personal property (includes bank accounts and cash) and no real property, your devisees or heirs may collect your assets by using an affidavit and not have to open a probate action through the court. This procedure requires the devisee or heir collecting the assets to swear they are entitled to it and will distribute it to any other entitled devisees or heirs.
Will my estate have to go through probate?
Whether or not your devisees or heirs will have to go through probate to transfer title to your assets depends on how your assets were owned when you died. Depending on how your assets are owned, your estate may not have to go through the probate process because your will or the intestacy laws may not control the distribution of some or all of your assets.
There is no inheritance tax or estate tax in Colorado.
What happens if you die with a will?
The will must be filed with the local authority to create a record of who inherited your assets. In Colorado, wills must be filed within ten days in order to be effective (Denver Bar Association).
What happens if you die without a will?
If you die without a will or your will does not fully dispose of your assets, the state laws determine who inherits your real estate and other assets.
In Colorado, your assets are distributed as follows:
For real estate, the state's inheritance laws, where any deceased person’s real estate is located, govern who inherits unless the person has a will and the will is filed.
Decision-Making / Authority
Heirs’ property owners own real estate as “tenants in common.” This is a specific bundle of legal rights.
Any decisions about the property require unanimous decisions from all owners.
Decisions made without a 100% agreement of the owners can be voided. This includes contracts such as leases to others, loan applications, sales of timber, etc.
Succession Planning for Family Real Estate
Physical Division and Sales
Co-owners can voluntarily agree to divide or sell the property physically. It requires 100% agreement of all owners. To be effective, it’s important that an attorney confirm who the current legal owners are.
Court ordered physical division, and sales are called partition actions. In a partition action, the court must first determine if the property can be physically divided equitably and proportional to every owner’s share. If it cannot be physically divided, the court must order the sale of the property.
In Colorado, co-owners in a partition action do not have the first right of refusal to purchase the petitioning owner’s share of the property.
In Colorado, the court is not required to order a sale on the open market and often sales are conducted through an auction and typically yield well below market value.]
Court actions for the partition of family land should be viewed as a last resort because they are expensive and leave family members with little or no decision-making authority.
Individuals and families with generational real estate should consider placing ownership in a trust or business entity to have the ability to set the rules for how decisions are made, including divisions and sales of the property.
How Can You Get Help?
Information
Item | Link | Source | |
Heirs' Property 101 Courses | HeirShares | ||
HeirShares Podcast | Anywhere | HeirShares |
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