Colorado Ancillary Probate: Will it Cost You Thousands?
Ancillary Probate in Colorado
Colorado probate is a legal process transferring title to property upon the death of the current owner. A primary probate proceeding is opened in the state where the deceased is domiciled at time of death.
Ancillary probate is a probate a second probate proceeding opened in another state to transfer property owned by the deceased in that state. The most common ancillary probate is a real estate proceeding. The cost of an ancillary probate proceeding can be thousands of dollars just to transfer a single parcel of real estate.
How to Avoid Colorado Ancillary Probate for Colorado Real Estate
Avoiding Colorado ancillary probate is easy. By putting real estate into something called a nominee trust or living trust, ancillary probate proceedings are avoided. Another option is to create a limited liability company to hold title to the real estate. A limited liability company interest is usually considered personal property. Ownership in personal properly (i.e., the limited liability company interest) can be transferred to the heirs through the primary probate proceeding. No ancillary probate is necessary. As an added benefit, the limited liability company can provide asset protection to the owner.
Payable on Death Designation a.k.a. The Colorado Beneficiary Deed
Colorado recognizes payable on death designations for real estate. It is called a Colorado beneficiary deed. A Colorado beneficiary deed looks much like a regular real property deed except that it does not transfer title until after the current owner’s death. A Colorado beneficiary deed must be recorded before the death of the current owner to be valid.
Other States Have Similar Laws
If you are a Colorado resident with real property outside of Colorado, other states have similar options to avoid the cost of ancillary probate. Contact legal counsel to determine which option is right for you.
As of July 2018. Definitions and statutes may change after this date.