You can nominate a person, or a bank, to act as the executor for your estate. In Colorado the executor is known as a "personal representative." If a person dies without leaving a will, the State of Colorado chooses someone close to the deceased to be in charge of the estate. In the case of your own estate, you are free to select anyone as a personal representative, but it is a good idea to ask if they are up for the task.
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Selecting a Personal Representative
When you nominate a personal representative you should pick a person who is suited to wind down your affairs. In exchange, they are compensated for their work, which means they are responsible for collecting and inventorying the assets of your estate, manage the assets of the estate during the probate process, pay the bills of the estate, make distribution to the heirs or beneficiaries of the estate and then close the estate after all of the responsibilities have been completed.
Typical Executor Fees in Colorado
The compensation received by a personal representative can vary according to the wishes of the deceased, but two percent of the probate estate is common. The larger the estate, the greater the time involved in settling the affairs and the higher the fee. Family members are often asked to serve as the personal representative without taking a fee, but a personal representative who choses not to be compensated as the personal representative should formally file a fee waiver with the court.
Concerns of Would Be Personal Representatives
Besides the time commitment involved in settling an estate, one of the other big concerns of people who might serve as your personal representative are the expenses of making calls, traveling, photocopies and possibly having to maintain certain assets of the deceased. The costs are real and the time commitment can be considerable, especially when considering lost wages. In Colorado, compensation is made to personal representatives and attorneys for all out of pocket expenses incurred in connection to the estate, subject to approval by the court.
If you receive compensation as a personal representative in Colorado, you have to keep a detailed record of all the tasks that you performed and the time that you spent working on the estate. The attorney handling the estate is also expected to keep such records. Both your compensation and that of your attorney is subject to a "reasonableness test" under the Colorado Probate Code. Payment will be made to you as the estate is closed out. Any compensation that you receive is taxed as ordinary income.