Like many states, Colorado has complex laws for inheritance. When it comes to distributing or inheriting assets, it’s important to understand what happens when you or a loved one dies with or without a will.
What happens to existing bank and savings accounts, investments, property, and family heirlooms? When someone works hard over a lifetime to accumulate assets, property, and family valuables, those legacies shouldn’t be left vulnerable to the state’s intestacy laws rather than distributed according to the thoughtful intentions of the family member who accumulated them.
Dying With a Will in Place
When a person has property and assets of significant financial value—or even of sentimental value—a well-executed last will and testament determines which assets go to specifically named family members, other individuals, and/or charitable organizations. The state has an obligation to honor these bequests rather than relying on the state’s default inheritance laws. The deceased individual’s named executor oversees this distribution of assets and also ensures payment of any debts against the estate.
What Happens if You Die Without Leaving a Last Will and Testament?
When someone passes away without leaving behind a will specifying their intentions for their assets, the state determines the deceased’s estate as “intestate.” Colorado’s intestate succession laws come into play as a contingency plan to distribute assets. This plan determines who inherits the estate, typically beginning with the closest family members of the deceased.
Some assets automatically pass on to beneficiaries through intestate succession and don’t require state probate. These include:
- Life insurance policies with named beneficiaries
- Property in a living trust
- Funds in a retirement plan, IRA, or 401K with named beneficiaries
- Real estate property with a transfer on death deeds, or vehicles with transfer on death registrations
- Bank accounts with “payable on death” provisions
- Jointly owned property
These assets do not require directives in a will but instead, pass to the named beneficiary or surviving co-owner. The decedent’s remaining property and assets follow the following rules for intestacy in Colorado:
- If a person dies with a spouse and no children, their estate passes to their spouse
- If a person dies with children and no spouse, the estate passes to the children
- If a person has a spouse and children with that spouse who has no other children, the estate passes to the spouse
- If a person has a spouse and children with the spouse, but the spouse also has children from a previous relationship, the spouse inherits the first $225,000 of the intestate property and then ½ of the remainder
- If the person has a spouse and children with that spouse plus they have descendants from a previous relationship then the spouse inherits the first $150,000 of the property and ½ of the balance and the rest goes to descendants
- If the person dies and leaves a surviving spouse and parents then the spouse inherits the first $300,000 of the property and ¾ of the balance, and the parents inherit the remainder
- If a person dies and leaves surviving parents and no spouse or descendants, the parents inherit everything
- If a person dies with siblings but no spouse, descendants, or parents, the siblings inherit
These intestate succession laws in Colorado make it complicated for the state to untangle during probate when someone dies without leaving behind a will. Failing to leave a valid and viable last will and testament results in these automatic defaults. If you wish to direct the distribution of your assets after your death it’s important to speak to a Denver family law attorney about your wishes for your family and beginning an estate plan.