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representave (you will use your leers of appointment as evidence ofyour authority).

For registered stocks and bonds, submit your leers of appointment tothe transfer agent, along with the securies and an adavit of domicile,which you get from a broker or a bank. If you need to sell somesecuries to raise money for estate expenses, you can do so withouthaving the securies registered rst, although it usually takes longer toget the proceeds. Bearer bonds need not be re-registered.

When you sell or distribute any real estate, you will need to use yourleers of appointment.

Since the administrave period is relavely short in Colorado, youwont need to establish a long-range investment plan. The estateneeds to have sucient cash to pay bills, taxes, and expenses, butyou dont need to convert everything to cash to divide it. Assets suchas real estate owned by the decedent can be retained, if theyre notspeculave in nature and as long as there is proper diversity among the

estates investments.The investment standard you will be held to, as a personalrepresentave under Colorado law, is called The Prudent InvestorRule. It emphasizes that you manage the assets intelligently andcarefully, as the assets of another, with an eye toward permanentdisposion of funds.Paying Taxes:You will need to address both the decedents and the estates taxes. Thisalways includes ling a nal income tax return for the decedent even ifthe decedent paid no income taxes in recent years. You may have to lea separate income tax return for the estate if the estate is taxable.

You also may have to le a federal estate tax return if the estate is bigenough to require it (in 2011 and 2012, the total value of all assetsmust exceed $5,000,000.00 to be taxable). Note that for estate taxpurposes, the decedents estate includes non-probate assets such asjoint tenancy assets, life insurance, 401(k) and IRA plans, and assetsheld in trust. Federal estate tax returns are very complicated, and aredue nine months from the date of death. If it appears that the total ofall the decedents assets approaches $5,000,000.00, you should see anaorney who specializes in trusts and estates.

When a person dies, his taxable year ends on the date of his death,and his income and deducons are reported through that date. Ifthe decedent was married when he died, the estate can join with thesurviving spouse in ling a joint income tax return for the year in whichthe decedent died. You may be able to take certain deducons on thedecedents nal income tax return or claim them as an expense ofadministraon on the federal estate tax return. You may want to talk toan aorney or an accountant about these decisions.

The estate is a separate tax-paying enty, and you must get a separatetax idencaon number from the IRS. File a request for this numberthrough the district director of the IRS on form SS-4. You will need thisnumber to open estate bank accounts as well as to transfer securies

into the name of the estate if they are to be held for any period ofme. The tax return used to pay income taxes for the estate is called aduciary income tax return. For the IRS, its form 1041; for the ColoradoDepartment of Revenue, its form 104:1. These forms must be led ifthe estate has any taxable income or has gross income of $600 or morein any taxable year. You may use either the calendar year or scal yearas the taxable year. Which one you choose will have various nancialimplicaons, and you should discuss this with an aorney or accountant.

Estate income tax returns must be led on or before the 15th day ofthe fourth month following the close of the taxable year (April 15th ifyou use the calendar year). You must pay the enre tax due. Aer thesecond year, you must le income tax esmates and make quarterlyesmated tax payments.

Paying yourself:You may choose to be compensated for your dues as personalrepresentave. Your compensaon and that of your aorney is subject

to a reasonableness test under the Colorado Probate Code. Familymembers oen serve without pay, except for out-of-pocket costs.If you do this, consider ling a fee waiver with the court. If you takecompensaon, you must keep a detailed record of tasks performed andthe me spent. Your aorney should also. Your compensaon will betaxable as ordinary income.

The assets of the estate belong ulmately to the beneciaries and not toyou. Make distribuons to beneciaries as soon as it can be done safely.

Generally, estate assets are paid in this order: those held by the decedentas a duciary, such as if the decedent was serving as a trustee of a trustat the me of death; family allowances; expenses of administraon;funeral costs; debts and taxes under federal law; amounts expended byColorado under Medicaid; expense of last illness; debts and taxes understate law; bills; specic gis under a will; beneciaries under a will, orheirs, when there is no will.

Distribuon doesnt have to wait unl the estate is closed. You can makepayments as priority is determined. Even paral distribuons may be

made to beneciaries during administraon. (In the rare cases whereadministraon is supervised, distribuon may be made only following acourt hearing and order.) But remember, as personal representave, youare responsible if you distribute assets and then nd you need the assetsto pay legimate claims.

Closing the estate:The estate does not terminate automacally. You may elect to closeformally or informally. In informal closings, a closing adavit form is ledwith the court, indicang that the estate has been fully administered.This limits the me to one year when those who receive assets andcreditors can challenge your administraon and distribuon of theestate. In formal closings, the administraon and proposed distribuonof the estate is approved by the court and the personal representaveis immediately discharged or released from liability by court order. Aformal closing usually does not require an actual hearing before a judge.

The Colorado Probate Code is intended to speed up the process administraon of estates. Since Colorado has no separate inherittax, many smaller estates may be administered and distributed fthe end of the credit period (usually within six to 12 months). In sestates, the majority of estate assets may oen be distributed beclosing. Larger estates oen involve ling estate tax returns and mnot be closed unl accounts are seled with the taxing authorieHowever, if the tax and probate aspects are handled in an organizand there are no complicated assets, like family businesses, the gmajority of larger taxable estates can be closed within two years

Potential Liability as Personal Representative

As the Personal Representave you may be liable to the benecifor any loss to the estate and for any gain the estate should have but did not.

Situaons in which a Personal Representave may be found liableinclude:

Failure for any reason to exercise reasonable care and skill inmanaging the property of another

You negligently or intenonally did something you should nohave done, such as steal funds from the estate, or fail tofollow the will or commit other acons that breach yourduciary duty as Personal Representave

You negligently or intenonally failed to do something youshould have done, such as properly inventorying the assets,or failing to pay the heirs or beneciaries of the estate.

You are liable to the beneciaries for any loss to the estateand for any gain the estate should have realized but did not,if that loss cannot be shown to have been a reasonable risk,taking into account the term of the investment.

As personal representave, youre responsible for managing theunl it is distributed. What you can and cant do may be speciedwill or by Colorados probate code.Once youre appointed, you have full authority and control over tassets the decedent owned in his name alone or as a co-tenant wothers. (Property held in joint tenancy with right of survivorship isa probate asset, nor are proceeds of life insurance that are payabnamed beneciary other than the estate.)

This list is not exhausve. The above list is meant to demonstratepotenal ways a Personal Representave can incur liability. You contact an aorney and seek their advice as to any potenal prothat may arise.

This pamphlet is published as a public service by the Colorado Bar Associaon. I

purpose is to inform cizens of their legal rights and obligaons and to provideinformaon regarding the legal profession and how it may best serve the comm

Changes may have occurred in the law since the me of publicaon. Before rely

this informaon, consult an aorney about your individual case.

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SO NOW YOU ARE A PERSONAL REPRESENTATIVEA person named to administer an estate used to be called an executor orexecutrix. Now the term is personal representave, regardless of whetherthat person is named in a will or is appointed because there was no will.

The purpose of a personal representave is to carry out the wishes of thedecedent regarding distribuon of his/her assets, and to complete thedecedents business, such as paying bills and ling tax returns.

Administering an estate is much simpler than years ago, when goingthrough probate was me consuming and complicated. Most Coloradoestates can be taken care of in approximately a year. In a simple estate,for example, where not much money is passed from husband to wife orthere is only one beneciary, you may not need an aorney. In most otherestates, you will want some advice and help. Some wills, parcularly olderones, may name an aorney to help with the estate. You need not hirethat aorney, though there are oen good reasons to do so. Generally, youshould choose an aorney who specializes in trusts and estates.

Your Duties in GeneralYou have a duty to act imparally in regards to all pares to the estate. Youhave to treat each person the same. You have a duty to administer theestate with care and prudence (there are legal denions about what thismeans), making sure to put the interests of the estate in front of your own

interests in the estate. As the Personal Representave, you are responsiblefor doing the following:

Collecng and inventorying the assets of the estate; Managing the assets of the estate during the probate process; Paying the bills of the estate. Making distribuon to the heirs or beneciaries of the estate. Closing the estate aer all of the above

responsibilies have been completed.Prior to Appointment as Personal RepresentativeIf you are nominated as personal representave in a will, you have thepower (before you are appointed by the court) to carry out wrieninstrucons of the deceased relang to the body, funeral, and burial

arrangements. You may begin to protect the deceaseds assets. Do notremove or distribute assets before opening the estate.

Search for the WillThe original will is usually in a safe place in the deceaseds home, a safedeposit box, an aorneys oce, or lodged with the Court in the County inwhich the decedent lived. When the original signed wil l is found, lodge itwithin 10 days with the probate court in the county where the deceasedlived. Its also possible the will was lodged with the court for safekeepingduring the deceaseds lifeme. If a will cannot be found, any aorneycan guide you through the intestate probate process. Also look for ahandwrien list of instrucons, a leer to family or similar documents. InColorado, these documents may constute a will.Entering the Safe Deposit BoxAny person whose name is on the box may enter it at any me. An heir

or beneciary in a will can ask the bank to search for the will, a deed to aburial plot, or burial instrucons. A representave of the bank will openthe box in the presence of the heir or beneciary and remove any willthat is found. The bank will forward it to the court, but consider askingfor a copy of the will before they do. Aer the will is led with the court,the personal representave named in the will can peon the court toappoint her or him.Search for Other DocumentsThe personal representave is the court representave who has theauthority to search for any important documents. The search shouldinclude the home, oce, place of business, and any safe deposit boxes.Meeng with advisors such as accountants, investment professionals,insurance agents, and aorneys are advised. Any informaon indicangthat an asset exists or that bills are unpaid should be kept for use in theadministraon of the estate.

Look for:

Funeral and burial plans Safe deposit rental agreements and keys Trust agreements Nupal agreements Life insurance policies or statements Pension, IRA, or rerement statements Recent income tax returns for past several years Gi tax returns Marriage, birth, and death cercates Divorce papers Military records and discharge papersCercates of deposit, bank statements, checkbooks, and check

registers Notes receivable and payable Motor vehicle tles Deeds, deeds of trust, mortgages, leases and tle policies Stock and bond cercates and account statements Bankruptcy lings

Partnership, LLC, or corporate agreements Unpaid bills Health insurance papers Papers regarding fraternal organizaons or professional sociees(because they may oer benets upon the death of their member).

Your AuthorityYou will be issued leers from the court, which say that you have beenappointed personal representave. These leers are evidence that youhave authority to act on behalf of the estate. You will need to show orsend them to various third pares, such as banks, insurance companies,etc., when you are administering the estate.

Opening and Closing Formal or Not?Informal vs. Formal Probate

In Colorado, we have a exible system of estate administraon. Generally,

you can choose how you will open and close the estate and thof court supervision over your acvies as a personal represeThere are two types of probate: formal and informal probateconsult your aorney to determine which type of probate is Informal probate happens when there is an uncontested wilwas no will, all of the potenal heirs of the estate agree on wbe personal representave and who the beneciaries of the are. Filing for an informal probate usually is less expensive anless me than formal probate. This is true because there is leinvolvement. There is not advance noce to pares and no bfrom the court.Formal probate applies if the heirs and/or beneciaries cannon those issues and they need the Court to decide for them. probate is also necessary if the original will cannot be found. proceedings will result in nal and binding court orders and inoce being sent to interested pares (beneciaries, creditorabout acons to be taken. Formal proceedings may also be usele a dispute, such as if family members disagree over whothe personal representave.

Somemes estates are opened informally, but closed formallyget the protecon of a court order for the personal representeverything has been done correctly.

Pleadings Required to be Filed by the PersonalRepresentativeAs the Personal Representave, there are certain pleadings thare required to le with the Court as part of the probate procrecommended that you contact either the Court or your aospecic pleadings that are required.

CreditorsFollowing a death, certain creditors may be very aggressive. important purpose of the probate administraon is to providorderly process for dealing with all of a decedents creditors. depleng the available cash on the rst squeaky wheels becan cause bigger problems later in the estate administraons,

expose the personal representave to a charge that he or shepreference for a specic creditor over others.Your Specic DutiesPromptly aer your appointment as personal representaveshould:

Prepare a Noce of Appointment form (which is probablypacket of forms you got) and send this to all those interestestate (such as beneciaries and unpaid creditors) and lewith the court that this noce was sent. This noce form the interested persons know the facts and ground rules readministraon of the estate, including your name and adthe court in which the papers are on le.

Set up an estate accounng system at the beginning of