Tuesday, May 14, 2013

New Colorado Statutes Effective August 8, 2013

On May 11, 2013, Governor John Hickenlooper signed Senate Bill 13-077 into law which will become effective on August 8, 2013. This Bill contains the statutory changes requested by the Trust & Estate Section of the Colorado Bar Association. Several statutes will go into effect in August. Among them, the new law modifies Colorado’s Dead Man’s Statute to make it more user friendly, particularly in the probate context in which it often plays a part. It adds to the factors that are to be considered by a judge when determining the reasonableness of compensation and costs in probate matters, and reaffirms that nominated and appointed personal representatives have legal standing to determine their decedent’s probable intent and estate planning purposes on issues involving the decedent’s estate and it allows those representatives to prosecute or defend their decedent’s intent at the expense of the estate, resolving a previously open question in probate proceedings.
The Bill also contains a statute harmonizing the information of appointment requirements sent to heirs and beneficiaries (and other interested persons) with those under the corresponding probate rule, it modifies the priority of claims in decedent estates to give child support claims a higher priority than those of general creditors and it makes clear that funds on deposit in bank accounts and credit unions are subject to collection by affidavit in small estates.
We will now have a statute that makes mandatory the requirement that a court order a professional evaluation in a conservatorship proceeding if the respondent requests it. In order to preserve assets in a conservatorship, the new law also will provide relief when there are insufficient funds available to pay all creditors, by providing a mechanism for the conservator to request that the protective person's limited funds be used for his or her care prior to being paid to general creditors.
In August, we will have a law that authorizes a grantor to be reimbursed by the trust for taxes he or she paid on behalf of their IDGT (intentionally defective grantor trust) without exposing the trust’s assets to his or her creditors or causing them to be included in his or her estate. Another statute will provide protection to trustees under certain circumstances involving ILITs (irrevocable life insurance trusts). The Bill also adopts, with some changes, the Uniform Trust Code’s codification of the law involving revocable trusts and makes definitional changes to ensure that revocable trusts in probate are characterized differently from business trusts.
Finally, the Bill contains new effective date provisions for amendments to the Colorado Probate Code (other than those effecting “protective proceedings” like guardianships and conservatorships) that, with one notable exception, will be uniform with the effective date provisions of the Uniform Probate Code. The one exception deals with the law of intestacy in which it will now be clarified that the intestate law in effect in Colorado at the time of the decedent’s death controls the identification of the heirs and the amount of their shares, despite any prior or future amendments to the laws of intestacy.