Colorado

To the best of our knowledge, the information provided below is current and accurate. Always be sure to consult with a jurisdictional authority before using this information to educate or counsel your clients.

State Estate or Inheritance Taxes

Colorado has no state estate or inheritance tax.

Small Estate Probate

Every state offers a fast track or shortcut for the probate of "small estates." Some assert that probate court is the proper forum for passing a small estate to the heirs, the idea being that if an estate is not valued over a certain minimum threshold, it is too small for serious estate planning.

To be sure, when a state's small estate probate threshold is extremely low, using this shortcut to settle an estate that qualifies may be the obvious choice. However, the small estate probate threshold in some states is substantial, in which case serious issues should be considered before you allow a client to go to the default system of the state court. When small estate probate is appropriate and what the client desires, refer to the following information.

You can use the simplified small estate process in Colorado if the value of the entire estate, less liens and encumbrances, does not exceed the value of personal property held by the decedent as fiduciary or trustee, exempt property allowance, family allowance, costs of administration, funeral expenses, and medical expenses of last illness. To use the small estate probate process in Colorado, an executor files a written request with the local probate court asking to use the simplified procedure. The court may then authorize the executor to simply distribute the assets without having to go through probate court proceedings.

Colorado also has a procedure that allows inheritors to skip probate altogether when the value of all the assets left behind is less than a certain amount. All an inheritor has to do is prepare an affidavit stating that he or she is entitled to a certain asset, and present it along with a copy of the death certificate to the person or institution holding the asset for release. Again, If the affidavit procedure is used, there's no need to use the small estate probate process.

The out-of-court affidavit procedure is available in Colorado if the fair market value of property that is subject to disposition by will or state intestate succession law, less liens and encumbrances, is $64,000 or less. (This amount is adjusted for inflation and excludes joint tenancy property, property in a living trust, payable-on-death bank accounts, and other kinds of property that don't pass under a will.) There is a ten-day waiting period.