I am often asked how to avoid probate.  I am not entirely sure why probate is such a frightening or non-favored thing, but lots of people want to avoid it.  To be clear: probate is the legal process of getting assets from the deceased person to the named beneficiaries or heirs in a will.  I know that legal processes can take time and the process can appear to be cumbersome, but that is the nature of dealing with the courts and almost all legal processes…such processes are designed to do things the way the courts want them done and the right way, so they are not going to be the most streamlined and efficient processes at times.  The probate process isn’t bad, it just is set up to be thorough and reflect how the courts want things done.

Many people tell me they want a will to avoid probate.  That isn’t how wills work.  Wills go through probate in Colorado, as the probate process is necessary to carry out the instructions contained in a will.  The person tasked with carrying out the instructions of a will needs to get legal permission and legal authority from the court to access the assets of the deceased individual.  Without proper legal authorization, the assets of the deceased individual cannot be released, as assets are not just given away to anyone who wants them…that is kind of the point of ownership of assets or ownership of private property…the assets belong to someone and can’t just be given away to anyone.  Real estate assets are subject to probate in Colorado, and any assets over $88,000 (as of 2026) need to go through probate with the courts, unless those assets are transferred in some other manner.  If you have no real estate assets, and under $88,000 of assets that are subject to probate, then you can use a small case affidavit to simplify the probate process.  A small case affidavit allows you to take control of assets without needing to get court permission.

If avoiding probate is one of the goals in an estate plan, then some other method of transfer needs to be set up for the assets.  Probate will control any property that is subject to being distributed by the will.  If you own property jointly with someone, and the joint owner passes away, the surviving owner will then be the sole owner of the property.  Certain financial assets, like an investment account, retirement account, life insurance, or even a bank account can have a beneficiary designation attached to the account, so accounts with beneficiary designations don’t need to go through probate.  

For property like a house or other real estate, Colorado allows for a Beneficiary Deed to be prepared instead of relying on a will or trust.  Setting up a trust can allow the trust to control what happens to assets, instead of a will and probate.  All of these methods can allow you to set up an estate plan that transfers assets in a way that doesn’t require probate to happen.

Setting Up Beneficiary Designations Eliminates the Need for Probate

If you have the ability to set up a beneficiary designation on an account that holds monetary assets, then the assets will pass to the designated beneficiary on those accounts, and does not need to go through probate.  An investment account will often have this option, so you can transfer your stocks, bonds, equities and other investment to whomever you designate as your beneficiary on the investment accounts.  Each investment company that holds the investments will have a beneficiary designation form, and they are all slightly different, so if you want to set up beneficiary designation on an investment account, you can do so through the investment company that holds the investment.

The same is true for retirement accounts and life insurance policies.  These types of accounts are tied to the life of you, or someone close to you, so they anticipate that the life associated with the account will end at some point, and then the remaining assets will need to be paid out to the named beneficiaries on these types of accounts.  When you set up a retirement account or a life insurance policy, part of the process includes setting up a beneficiary to those accounts.  Bank accounts don’t always include a beneficiary designation, or pay on death designation as it is called for bank accounts, but you can set up a pay on death designation for a bank account.  Doing so would mean your bank accounts transfer outside of the probate process.

 

You Can Use a Beneficiary Deed for Real Estate

Real estate and real property, like a house, or other land, doesn’t come with a beneficiary designation form, like a retirement account or life insurance policy would.  However, there are such things as a Beneficiary Deed in Colorado.  A Beneficiary Deed is essentially a transfer on death deed.  You can create the Beneficiary Deed for a piece of property and designate on the Beneficiary Deed itself who will receive the real estate after you pass away.  A Beneficiary Deed gets recorded with the county clerk and recorder’s office before you pass away, and then when you do pass away, the beneficiaries just need to record your death certificate with the county clerk and recorder’s office, and then ownership will transfer to your named beneficiaries by operation of the Beneficiary Deed.  Sometimes they will need to record a supplemental affidavit to tie your name on the real estate to your name on the Beneficiary Deed, as those names are not always exactly the same, but the real estate can then transfer via the Beneficiary Deed instead of going through probate.

You Can Use a Trust to Avoid Probate 

A trust is an alternative to a will, and is part of your overall estate plan.  If you set up a trust, and put assets into the trust, then the trust dictates what happens to your assets after you pass away, and the assets distributed by a trust are not subject to probate.  This is the case because a trust will continue to exist after you pass away and you can name someone to take over the trust after you have passed away, so that assets can be distributed out of the trust to the correct beneficiaries named in the trust.  As such, no probate is necessary for assets owned by the trust.  

A trust can own real estate, investment accounts, physical assets, or other types of assets, so a trust can be very helpful in avoiding probate, but only for assets owned by the trust.  Not all assets are the best candidates to go into a trust, as putting retirement accounts into a trust when the trust is formed can have significant negative tax consequences, but a trust is a great way to avoid probate.

There Isn’t Just One Right Way to Avoid Probate

The various strategies above are usually best used in combination, instead of just relying on one method.  Setting up a trust may also necessitate naming the trust as a beneficiary of certain financial or monetary assets.  Setting up beneficiary designation on financial assets is great, but if you have real estate, you will also need to use a Beneficiary Deed or a Trust to avoid probate, unless you are a joint owner.  Finding the right combination of techniques to use is important in estate planning.  If you need an experienced estate planning attorney’s help choosing the right way to avoid probate for you, please click the button below to schedule a meeting.