Probate: Exempt Property & Family Allowance
The Exempt Property Allowance and the Family Allowance
When a person dies and a probate proceeding is commenced in Colorado, certain payments and expenses have priority over the others. Right at the top of that list is the exempt property allowance and the family allowance.
Exempt Property: Priority Over all Claims Against the Estate
The decedent’s surviving spouse is entitled to exempt property from the estate in the base amount of $30,000.00 subject to a cost of living adjustment. In 2020, that amount is $35,000.00. If there is no surviving spouse, the decedent’s dependent children are jointly entitled to the same exempt property. Rights to exempt property have priority over all claims against the estate, except claims for the costs and expenses of administration, and reasonable funeral and burial, interment, or cremation expenses. This is in addition to any benefit passing to the surviving spouse or dependent children under the will.
Family Allowance: Additional Benefit
In addition to the right to exempt property, the decedent’s surviving spouse and minor children who the decedent was obligated to support and children who were in fact being supported by the decedent are entitled to a reasonable allowance in money out of the estate for their maintenance during the period of administration.
Family Allowance in an Inadequate Estate
The family allowance may not continue for longer than one year if the estate is inadequate to discharge valid claims against the estate. Like the exempt property allowance, the family allowance is exempt from and has priority over all claims except claims for the costs and expenses of administration, and reasonable funeral and burial, interment, or cremation expenses. The family allowance is in addition to any benefit passing to the surviving spouse or dependent children under the will.
Exercising the Right for Exempt Property and Family Allowance
Many surviving spouses and dependent children never make the election to take the exempt property and family allowances. They assume that there will be enough money to pay all the bills and then distribute the remainder to them. This can be a mistake. On occasion, expenses end up being much higher than expected. As the saying goes, stuff happens. Making the request for these two allowances should always be considered.