Colorado Probate Blog - Wade Ash Woods Hill & Farley, P.C.

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2016 Colorado Law Changes

There were a few probate-related bills passed by the Colorado legislature this past session, including the following:

SB 16-131, part one of the so-called "Omnibus Bill." This bill amended 15-10-503 to clarify provisions relating to removal of a fiduciary by the court; the right of a protected person to a lawyer post-adjudication; lengthening the time period for a request to be filed for attorneys' fees for a benefit to the estate; and specifying that after a petition for removal is filed, the fiduciary may not receive compensation or pay attorneys' fees without court order.

SB 15-133, part two of the so-called "Omnibus Bill." This bill clarified the procedure for recording a death certificate and supplementary affidavit to clear title to real property after the death of one joint tenant: a person with an interest in the property may sign the Supplementary Affidavit. This bill also substantially revised the procedure in 15-12-1301 et seq. to determine heirs and interests in property that can be used to clear title through several decedents' estates in one proceeding. This can be a useful option for mineral interests.

HB 16-1051 created a procedure for a beneficiary designation on a vehicle title, so that title may transfer outside probate proceedings.

SB 16-088 is the "Revised Uniform Fiduciary Access to Digital Assets Act." The first uniform act to address the authority of a personal representative, trustee, agent under power of attorney, or conservator to access digital assets had been introduced in 2015 in 27 states, including Colorado, but a concerted lobbying effort by industry succeeded in blocking any enactments. The Uniform Laws drafting committee for the Act met again with leaders of Facebook, Google, and other industry representatives, and a compromise was reached, as evidenced in this Act. The first Act included default provisions that would have permitted access by fiduciaries unless the owner had prohibited such access. This Act is the reverse: access by fiduciaries must be specifically authorized in the power of attorney, Will, Trust, or court order in the case of conservators. There have now been 16 enactments of the Revised UFADAA, including Colorado. The Act also attempts to encourage companies to provide on-line tools for owners to designate persons who may have access to their accounts. Federal law still provides that companies may not permit others to have access to a user's account, and those laws do not make mention of fiduciaries.

SB 16-085 is the Colorado Uniform Trust Decanting Act. This Act sets forth a procedure if a trustee determines it is in the best interests of the beneficiaries for trust assets to be distributed from one trust to a new trust. One example would be to address more modern administrative provisions, or to incorporate provisions for a special needs trust. In order to take advantage of this procedure, the current trust must give the trustee discretion to make distributions. Then notice can be given to the beneficiaries, and the assets may be distributed to the new trust. It is another method to modify the terms of an irrevocable trust.

Tax Law Update: As we have reported earlier, for any U.S. Estate Tax Returns (Form 706) filed after July 31, 2015, a Form 8971 must be filed reporting basis in assets to the beneficiaries. The due date for this return by federal statute is 30 days after the Form 706 is filed, but that due date has been delayed several times by the IRS. The due date is now June 30, 2016, and Treasury has indicated that no additional delays will be granted.

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