Colorado Wills vs. Trusts
Estate planning in Colorado doesn’t have to be complicated when you’re properly informed. The Centennial State provides several distinctive planning advantages, including property transfer through beneficiary deeds, streamlined probate procedures for smaller estates, and the legal recognition of informal will documents that aren’t valid in many other states. By clearly understanding the differences between wills and trusts under Colorado’s specific legal framework, you can help your loved ones avoid unnecessary expenses, legal complications, and delays while ensuring your assets are distributed precisely according to your wishes.
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US Map For The Different Will and Trust Requirements by State
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Colorado Will Requirements
A Colorado Last Will and Testament should include:
- Age and Capacity: Testator must be “of sound mind” and at least 18 years old
- Sound Mind Definition: Capable of understanding that a will is being created, the nature of assets, and identities of family members who would ordinarily be beneficiaries
- Format: Must be in writing
- Signature: Must be signed by the testator or by someone at the testator’s direction and in the testator’s presence
- Witnesses or Notary: Must be either attested by at least two witnesses OR acknowledged by the testator before a notary
Witness Requirements
For witnessed wills in Colorado:
- Witnesses must observe the testator signing the will or hear the testator’s declaration that the signature is genuine
- Witnesses must sign the will within a reasonable time after the signature or authentication occurs
- The only prerequisite for witnesses is that they must be generally competent to act as a witness
Interested Witnesses
Unlike some states, Colorado wills are not invalidated if a witness is an interested party (someone who receives a benefit under the will). However:
- Devises to an interested witness are deemed void to the extent they exceed what the witness would have received had the testator died intestate
Self-Proved Wills
Colorado wills can be made “self-proved” through a notarized affidavit executed by the testator and witnesses. When a will is self-proved:
- It can be admitted to probate without requiring testimony from witnesses
- The affidavit can be executed at the same time as the will or at a later date
- The affidavit must attest to the facts required to authenticate the will in probate
Incorporation by Reference
Colorado law permits wills to incorporate other documents by reference if:
- The document exists when the will is executed
- The document is sufficiently described to allow identification
Colorado specifically authorizes incorporation of written lists (“memorandum of personal property”) for tangible personal property disposition if:
- The list is signed by the testator or written in the testator’s handwriting
- The list identifies with reasonable certainty the devised items and intended recipients
- The list can be created before or after the will and can be altered by the testator
Harmless Error Rule
Colorado has a unique “harmless error” provision: a document that doesn’t meet the technical formalities required for a will may still be treated as valid if there is clear and convincing evidence that the document was intended as the testator’s will. The document must be either signed or acknowledged by the decedent (or clear evidence must show the decedent erroneously signed a document intended as the decedent’s spouse’s will).
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Amendment, Revision, and Revocation of Colorado Wills
Amending a Colorado Will
A Colorado will can be amended through:
- Execution of a subsequent will
- Execution of a codicil (a later-executed document amending an existing will)
In either case, the document must satisfy all legal requirements for execution of a valid will.
Revoking a Colorado Will
Colorado wills can be revoked by:
- A “revocatory act” such as burning or tearing the will with intent to revoke it
- Execution of a later will that expressly revokes the prior will
- Execution of a later will that is inconsistent with the prior will
Later Wills Without Express Revocation
When dealing with multiple wills without express revocation clauses:
- A later will that completely disposes of the testator’s estate is presumed to revoke prior wills by inconsistency
- A later will that doesn’t completely dispose of the estate is presumed to supplement earlier wills
- If provisions conflict between wills, the later-executed will controls
Automatic Revocation by Marriage
If a testator marries after executing a will:
- The surviving spouse inherits the same share they would have received had the testator died intestate
- This share is adjusted for any distributions to children of the testator born before the marriage who are not children of the surviving spouse
This provision doesn’t apply if:
- The will was made in contemplation of the marriage
- The testator intended the will to apply despite the marriage
- The testator made other provisions for the spouse outside the will
Automatic Revocation by Divorce
If a Colorado testator is divorced after executing a will or revocable trust:
- Any revocable provisions in favor of the former spouse are considered to have been disclaimed
- An individual who has been divorced from a decedent does not qualify as a “surviving spouse”
This provision doesn’t apply if the will, trust instrument, property settlement agreement, or court order expressly provides otherwise.
Children Born After Will Execution
If a child is born to or adopted by a testator after will execution—and the testator didn’t provide for or appear to intentionally omit the child—the child inherits a share of the estate:
- If the testator has no other children: equal to what the child would have inherited had the testator died intestate
- If the testator has other children provided for under the will: calculated based upon the devises to other children
This provision doesn’t apply if the will leaves substantially all of the estate to the child’s other parent.
Holographic and Oral Wills
Holographic Wills
Colorado law recognizes holographic (or handwritten) wills. A document that does not satisfy all requirements for an attested will may be a valid holographic will if it is:
- Signed by the testator
- All pertinent provisions of the will are written in the testator’s own handwriting
Evidence outside of the document itself can be used to establish in probate that a handwritten document was created with the intent to form a will.
Oral Wills
Oral (or “nuncupative”) wills are not recognized under Colorado law.
Colorado Trust Requirements
Colorado trusts are primarily governed by the Colorado Uniform Trust Code. A trust is a legal relationship where a property owner (the “settlor”) transfers property to a “trustee” for the benefit of a “beneficiary.” The same person may stand in more than one role, but the same person cannot be both the sole trustee and sole beneficiary of a Colorado trust.
Requirements for a Valid Colorado Trust
For a trust to be valid under Colorado law:
- The settlor must express an intent to create a trust and have adequate capacity (measured under the same standard applying to wills)
- The trust’s purposes must be lawful, capable of being achieved, and not conflict with Colorado public policy
- In general, the terms must be for the benefit of the trust’s beneficiaries
- A Colorado trust is void to the extent its creation was induced through fraud, duress, or undue influence
Required Trust Elements
A Colorado trust must have:
- A definite beneficiary (subject to exceptions such as for charitable trusts, trusts for the care of animals, and certain trusts for noncharitable purposes)
- A trustee with actual duties to perform
Trust Creation Methods
Colorado trusts can come into existence through:
- Transfer of property by a settlor to a trustee (either during life or through a will)
- A declaration by the owner of property that it is owned as trustee
- Exercising a power of appointment in favor of a trustee
- Authorization through a statute, judgment, or decree
Trustee Responsibilities
Colorado trustees have a duty to:
- Administer the trust prudently, considering the trust’s terms, purposes, and circumstances
- Act for the benefit of the beneficiaries
- For revocable trusts, duties are owed exclusively to the settlor
Oral Trusts
Though most trusts are evidenced by a written instrument, the Colorado Uniform Trust Code allows for oral trusts if:
- The terms can be established by clear and convincing evidence
However, certain types of trusts must be evidenced by a formal writing under Colorado law.
Revocability
Unless a Colorado trust is expressly made irrevocable, the settlor is assumed to retain the power to revoke or amend the trust.
Trust Termination
Colorado trusts terminate upon:
- Revocation or expiration under the trust’s own terms
- When there is no purpose of the trust remaining to be achieved
- When the trust’s purposes become unlawful, contrary to public policy, or impossible to achieve
A trust may also be modified or terminated:
- By a court upon the petition of the settlor, trustee, and/or beneficiaries
- In some circumstances, upon the consent of the trustee and all beneficiaries without court involvement
Upon petition, a court may also reform or modify the terms of a trust to conform to the settlor’s intent or tax objectives.
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Special Considerations
Estate Taxes
No Estate or Inheritance Taxes
Colorado does not impose either estate or inheritance taxes at the state level. Large Colorado estates may still be liable for federal estate taxes if they exceed the federal exemption threshold.
Simplified Probate
Colorado law provides a streamlined small-estates probate process for qualifying estates. An estate is eligible if its net value (after deducting liens and encumbrances) is not greater than the sum of:
- Exemptions and allowances
- Administration costs
- Final expenses
- Medical expenses from the decedent’s last illness
- Value of any personal property the decedent held as fiduciary or trustee
Personal representatives of qualifying small estates can take possession of estate assets, make distributions to heirs, and close the estate by affidavit without the more onerous ordinary probate process.
Non-Probate Transfers
Colorado law offers multiple options for non-probate transfer of assets:
Transfer-on-Death Deeds and Vehicle Titles
Colorado is one of the few states that recognize TOD designations on both real estate deeds (sometimes called a “beneficiary deed”) and vehicle titles. In either case, an asset with a TOD designation automatically transfers to the named beneficiary upon the owner’s death, but the beneficiary does not acquire present rights in the asset until death actually occurs.
Spousal Rights
Elective Share
To protect against disinheritance, Colorado law provides surviving spouses with the right to claim an elective share in the “marital property” portion of a decedent spouse’s “augmented estate.” This right can be waived by a valid prenuptial agreement.
Key features of Colorado’s spousal elective share:
- The augmented estate includes the decedent’s net probate estate, non-probate transfers, and property and transfers of the surviving spouse
- The portion constituting “marital property” ranges from 10% to 100%, depending on how long the couple has been married
- The elective share equals one-half of the value of the resulting marital property
- If an elective share amount is under $50,000, a supplemental elective share is permitted up to $50,000
Need help creating the right estate plan for your Colorado family?
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Wills vs. Trusts: Comparison
| Feature | Wills | Trusts |
|---|---|---|
| When It Takes Effect | After death | Can be immediate (living trust) or after death (testamentary trust) |
| Probate Process | Requires probate | Assets in trust avoid probate |
| Privacy | Public record | Generally private |
| Challenges | Can be challenged in probate court | More difficult to challenge |
| Cost to Create | Generally less expensive | Usually more expensive |
| Ongoing Administration | None until death | May require ongoing management |
| Protection During Incapacity | None (requires separate power of attorney) | Can provide management if grantor becomes incapacitated |
| Colorado Special Feature | Colorado recognizes holographic wills and has a “harmless error” rule | Colorado allows creation of oral trusts if terms are established by clear evidence |
Conclusion
Creating a will or trust does not have to be difficult or intimidating for Colorado residents. However, certain circumstances—like second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests—can add complexity and result in unforeseen consequences. Colorado offers unique estate planning tools like beneficiary deeds for real estate, favorable joint tenancy laws, and recognition of informal wills that can provide flexibility in your planning.
Colorado’s lack of state death taxes is also a significant advantage for estate planning. Whenever any out-of-the-ordinary issues are present, it’s advisable to consult with an experienced attorney familiar with and licensed under Colorado law to ensure your estate plan takes full advantage of the state’s favorable provisions while avoiding potential pitfalls.
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Frequently Asked Questions
Do I need a lawyer to create a will in Colorado?
While Colorado law doesn’t require an attorney to create a valid will, consulting with an estate planning lawyer is highly recommended, especially for complex situations. Colorado has specific requirements for valid wills, including witnessing and notarization options. An attorney can help ensure your will is legally sound and properly executed. Additionally, Colorado allows for holographic wills and recognizes documents that fail to meet formal requirements if there’s clear evidence they were intended as wills, but these options often lack safeguards that a professionally drafted will would include.
What happens if I die without a will in Colorado?
If you die without a will in Colorado (intestate), state laws determine how your assets are distributed. Your spouse would receive all of your assets if you have no descendants or if all your descendants are also your spouse’s descendants. If you have descendants that are not your spouse’s, your spouse receives the first $225,000 of your estate plus half of the remaining estate, with the rest going to your descendants. If you have no spouse, assets go to descendants, then parents, then siblings, and so on according to Colorado’s intestacy laws. Additionally, the probate court would appoint an administrator for your estate and guardians for minor children without considering your preferences.
Are there estate or inheritance taxes in Colorado?
No, Colorado does not impose either estate or inheritance taxes at the state level. This is beneficial for Colorado residents as it means assets can pass to heirs without any state-level death taxes. However, large Colorado estates may still be subject to federal estate taxes if they exceed the federal exemption threshold, which as of 2025 is $13.61 million per individual. Unlike some neighboring states that maintain state-level death taxes, Colorado’s lack of these taxes makes it a more favorable state for estate planning purposes.
Can I write a handwritten will in Colorado?
Yes, Colorado recognizes holographic (handwritten) wills. For a handwritten will to be valid in Colorado, it must be signed by you and all material provisions must be written in your own handwriting. Unlike traditional wills, holographic wills in Colorado don’t require witnesses or notarization. Additionally, Colorado has a unique provision that allows documents not meeting formal will requirements to be treated as valid wills if there’s clear and convincing evidence the document was intended as a will. While holographic wills are legally valid, they often lack important provisions and safeguards that an attorney would include in a formal will and may be more vulnerable to challenges.
What’s unique about Colorado’s spousal elective share?
Colorado’s spousal elective share is distinctive because it’s based on the length of the marriage and applies to an ‘augmented estate’ that includes both probate and non-probate assets. The share ranges from 10% to 50% of the marital property portion of the augmented estate, with the percentage increasing based on the marriage duration until it reaches 50% after 10 years of marriage. Unlike many states with a fixed percentage, Colorado’s approach recognizes that longer marriages typically involve more commingled assets. Additionally, Colorado provides a supplemental elective share that ensures a surviving spouse receives at least $50,000 when the calculated elective share would be less. This tiered approach offers more protection for spouses in long-term marriages.
Does Colorado recognize transfer-on-death deeds?
Yes, Colorado is one of the states that recognizes transfer-on-death (TOD) deeds for real estate, often called ‘beneficiary deeds’ in Colorado. This allows property owners to designate beneficiaries who will automatically receive the property upon the owner’s death, without going through probate. Colorado also permits TOD designations on vehicle titles, which is not available in all states. These tools provide Colorado residents with flexible estate planning options to transfer specific assets outside of probate while retaining complete control during their lifetime. The beneficiary has no rights to the property until the owner’s death, and the owner can revoke or change the designation at any time before death.
How does Colorado’s small estates procedure work?
Colorado offers a simplified probate process for small estates that can save time, money, and paperwork for qualifying estates. An estate is eligible if its net value (after deducting liens and encumbrances) doesn’t exceed the sum of exemptions, allowances, administration costs, final expenses, medical expenses from the decedent’s last illness, and any personal property held as fiduciary or trustee. For qualifying estates, personal representatives can collect assets, pay debts, distribute property, and close the estate by filing an affidavit rather than going through the full probate process. This streamlined procedure typically allows heirs to receive assets much faster than with traditional probate and with significantly reduced court involvement and legal expense.
