The Colorado Probate Code; Part Ii
| Publication year | 1973 |
| Pages | 5 |
Douglas M. Cain, William P. Cantwell, Chapman B. Cox, Constance L. Hauver, William L. Hershberger, and Norman L. Markman, J.
This article is the second in a series which surveys the effect of the Colorado Probate Code (CPC) on estate planning and probate practice. The focus is on some new considerations to be made by attorneys drafting wills under the CPC; provisions expected to be routinely included in wills are described. Some of these are familiar clauses which may need revision to take advantage of or negate provisions of the CPC; others are new. A glossary of terminology to facilitate discussion precedes the text.
PROBATE CODE BASIC CONCEPTS AND GLOSSARY
A dramatic law revision like the CPC inevitably introduces new words, new approaches, new concepts. The following definitions help with new terminology and offer an overview of major code provisions.
Apportionment of Death Taxes. Unless otherwise provided in the will, federal estate taxes, the Colorado "gap" tax and interest and penalties are apportioned among all persons interested in the estate in the proportion that the value of the interest of each person bears to the total value of all interests,[48] with one apparent exception: property passing to the spouse or a charity will not be included in the apportionment computation to the extent that such property would not qualify for the marital or charitable deduction by reason of the death tax which would be imposed upon and deducted from such property if it were included in the computation.[49] No change has been made in C.R.S. 1963, § 138-3-18 which places the burden for Colorado inheritance taxes (unless otherwise provided in the will) upon the respective transferee of the transfer which generates the tax and requires the personal representative to distribute the net amount of the transfer or collect the tax from the transferee.
Augmented Estate. A decedent's surviving spouse is entitled to one-half of that portion of the decedent's gross estate called the augmented estate. The purposes of this concept in the Uniform Probate Code (UPC) are twofold: (1) to prevent the testator from depriving the surviving spouse of a fair share of the estate by means of transfers by will or will substitutes; and (2) to prevent the surviving spouse from frustrating the testamentary plans of the decedent if the spouse has been otherwise adequately provided for.[50] To these ends the augmented estate consists of not only the net estate subject to administration but also (a) inter vivos transfers made by the decedent during marriage to persons other than the surviving spouse, and not consented to by the spouse, pursuant to which the decedent retained an interest for life (e.g., transfer with retained income interest, transfer to a revocable living trust, joint tenancy property passing to persons other than the spouse, gifts exceeding $3,000 made within two years of death),[51] and (b) property of the surviving spouse derived from the decedent (e.g., life insurance, pension benefits, joint tenancy property passing to the spouse).[52] The first purpose of the drafters of the UPC described under (1) above was implemented by the CPC. However, even though the property listed under (b) above is included by the CPC in the augmented estate, the second purpose described under (2) above was substantially avoided by a provision in the CPC which gives the surviving spouse an option to elect one-half of the augmented estate or, in the alternative, one-half of the inventoried probate estate.[53]
Conservators. A conservator is a person who is appointed by a court to manage the estate of a minor or disabled person.[54] The term has been given a broader meaning and now includes one who was previously called guardian of an estate. (The term guardian is limited under the CPC to appointed guardians of the person of protected persons.[55]) Under the CPC a conservator may be nominated not only by the protected person but by his spouse, child, parent, relative or one who is caring for or paying benefits to him.[56] A conservator for a protected person other than a minor has the power, provided the protected person's welfare is otherwise adequately maintained, to make gifts to charity or other objects of the protected person's expected bounty in amounts not exceeding 20% of the net income annually.[57] Apparently the donee may be the conservator himself if the other requirements of § 153-5-425(6) are met.
Devise, devisees. The definitions of these terms, which once applied only to real property, have been broadened to relate to all types of property disposed of by will. Accordingly, a devisee is any person designated in a will to receive any portion of the testator's property of any kind.[58]
Durable Power of Attorney. The continued effectiveness of a power of attorney after the principal becomes disabled or incapacitated is allowed if the appropriate language is included in the power of attorney.[59]
Exempt Property and Family Allowance. The decedent's immediate family is entitled to exempt property in the amount of $7,500 which has priority over all claims against the estate except property held by the decedent as a fiduciary.[60] The exempt property goes to the surviving spouse, or if the spouse does not survive, to the dependent and minor children of the decedent in equal shares.[61] In addition to exempt property, the surviving spouse and dependent and minor children of the decedent are entitled to a family allowance which shall be the reasonable amount necessary for their maintenance during administration of the estate.[62] It appears that the priority of the family allowance falls immediately below property held by the decedent as a fiduciary and exempt property.[63] Exempt property and the family allowance are not chargeable against any interest passing to the spouse or children by will (unless otherwise provided therein), by intestacy or by way of the elective share.[64]
Formal Testacy and Appointment Proceedings. Litigation to determine whether the decedent left a valid will or to determine the right of one to administer an estate[65] is commonly referred to as formal probate or probate in solemn form. It is expected that such proceedings will be used only where validity of the will or propriety of the appointment is contested or where the will is not valid on its face. Although the CPC has modified certain rules of procedure[66] and evidence,[67] the proceedings resemble existing formal proceedings for appointment or proving the will. The fact that formal testacy or administration.[68] For example, if the contestants in the formal proceeding were unsuccessful or if the formal proceeding was used merely because the will was not valid on its face, a supervised administration may not be needed or desired.
Guardians. A guardian is a person who has qualified as guardian of the person of a minor or incapacitated person pursuant to court or testamentary appointment.[69] If no conservator has been appointed, the guardian is given some limited powers over the ward's estate.[70] A court-appointed guardian of a minor may be nominated by the minor or in a writing (not necessarily a will) by the minor's parents.[71]
Incorporation by Reference. Under the CPC, a will may incorporate by reference any writing in existence when the will is executed provided the will manifests this intent and adequately describes the writing, and provided further that the writing is filed for record in the office of the clerk of any district or probate court in the state of Colorado.[72]
Informal Probate and Appointment Proceedings. One of the major innovations of the CPC is to permit probate of wills and appointments of personal representatives without formal court proceedings upon presentation of a properly completed application to the court registrar.[73] These proceedings are commonly referred to as informal probate or probate in common form. Informal probate is designed for simple cases, where there are no competing interests with respect to the validity of the will or the identity of the appropriate person to administer the estate. The fact that informal probate or appointment proceedings have been used does not preclude an interested person from obtaining a supervised administration.[74] For example, the beneficiaries may not dispute the will or the right of the personal representative to administer the estate but they might still desire court supervision of such administration to protect their respective interests.
Intestate Taking by Representation. The CPC clarifies a possible ambiguity under the old law in situations where there were no living representatives of the first generation of decedent's descendants[75] by providing that the estate is first divided in equal shares with reference to that generation in the nearest degree of kinship to decedent having surviving representatives.[76]
Intestate Share of Adopted Children. An adopted child is a child of his adoptive parents[77] not only for the purposes of inheriting from them but also for the purpose of inheriting through them.[78]
Intestate Share of Half Bloods. Relatives of the half blood inherit the same share they would inherit if they were of the whole blood.[79]
Intestate Share of Spouse. If there is no issue, the surviving spouse takes all of the intestate estate. If all issue are of the decedent's surviving spouse, the spouse takes the first $25,000 plus one-half of the balance of the intestate estate. If there are surviving issue of decedent who were not issue of the surviving spouse, the spouse takes one-half of the intestate estate.[80]
Issue. Issue of a person means all his lineal descendants of all generations, with the relationship of parent and child at each generation being determined by the definitions contained in the CPC.[...
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