_____ Set Up An Organizational System

It would be helpful to set up an organizational system that helps you track the estate’s assets, the money coming in as you liquidate assets, the money going out as you pay off creditors, and all correspondence relating to the estate. You should also track the hours you spend on your Personal Representative duties, even if you elect not to take a fee for your services.

_____ Get A Federal Tax ID Number For The Estate

Before you can open a bank account for the estate, you’ll need to obtain a Federal Tax ID number. We can help you obtain this number from the IRS.

_____ Open An Estate Bank Account

Once you have your Federal Tax ID number, you can open a checking account for the estate at the bank of your choosing. As you gather and liquidate assets, you’ll put all of the proceeds in the estate account. You’ll also pay all of the bills and debts from this bank account. Once everything is settled with the estate, you’ll then distribute the remaining assets to the beneficiaries named in the will.

_____ Identify All Assets In The Estate (Real Property And Personal Property)

A big part of your job as Personal Representative will be identifying all of the assets of the estate. These can include real property (such as real estate) as well as personal property (such as cash, accounts, vehicles, etc).

_____ Determine Which Assets Are Part Of The Estate And Which Aren’t

If the deceased has named beneficiaries for certain assets (such as retirement accounts or life insurance proceeds), these assets don’t fall under probate, but they may need to be distributed. Any common assets (such as real estate that’s held in joint tenancy) also don’t go through probate.

_____ Identify All Of The Debts The Estate Owes

As executor of the estate, it’s your fiduciary responsibility to identify all of the debts that the estate owes. The most common debts in an estate that need to be settled during probate include:

• unpaid monthly bills (such as electricity, cable, telephone, etc.)
• credit card bills
• medical expenses
• funeral expenses
• IRS bills (for current or past years)

Colorado law requires that you notify all known creditors by mail or by publication in a local newspaper that the decedent has passed away.

_____ Prepare And File Tax Returns

You’ll need to file the deceased’s final tax returns (even if no money is owed to the IRS or Colorado), as well as federal tax returns for the estate (if applicable).

_____ Manage The Estate’s Assets

While the estate is in probate, you might have to mange some of the assets (such as a home, a business, or commercial real estate). This can be one of the most difficult aspects of probate, and we can provide legal advice and help you avoid any pitfalls.

_____ Value And Liquidate All Assets Of The Estate

Once you’ve identified all of the assets of the estate, you’ll want to get fair-market appraisals of them and possibly liquidate them. All proceeds from the sale of the estate’s assets should be put into the checking account that you opened for the estate.

_____ Pay Off All Of The Estate’s Valid Debts

Before you can distribute any assets or funds to beneficiaries in the will, you’ll need to pay off the estate’s valid debts. If the debts of the estate exceed the assets, please don’t pay any bills without checking with us first. By Colorado law, some creditors might have a legal claim to the estate before others. It’s extremely important that you handle this step correctly.

_____ Distribute Assets To The Beneficiaries Designated In The Will

After all of the assets have been gathered (and liquidated, when applicable), and the debts have been paid, you can distribute assets to the beneficiaries designated in the will.

_____ Close The Estate

After the beneficiaries have received their bequests, you can close the estate. It’s important to note, however, that with informal probate and formal probate, the estate has to be open for at least six months, according to Colorado law. This law was put into place to allow creditors to make a claim against the estate. Realistically, it will probably take you longer than six months to complete probate, but if you finish early, you’ll still need to wait until the six-month mark has passed.

For more information about what to do during probate, or to schedule your flat-rate* legal consultation, please call 720-547-2319 or email contact@althauslaw.com.