Your duties: creditors, notices, taxes, insurance, and keeping a vacant house safe

Bottom line first. Once a court names you personal representative, you are in charge of the estate's money and property until it is settled. You do not have to be perfect. You do have to be careful, honest, and organized: protect the house, give creditors a fair chance to speak up, pay real debts in the right order, and keep records. This lesson is general education, not legal or tax advice.

Your basic job

A personal representative (PR) is the person the court puts in charge of a dead person's estate. The law calls a PR a fiduciary, which means someone who must act for other people's benefit, not their own, and who is held to the standard of care that applies to trustees (C.R.S. 15-12-703(1)). The same law says you must settle and distribute the estate “as expeditiously and efficiently as is consistent with the best interests of the estate” (C.R.S. 15-12-703(1)). In plain words: move steadily, and do not cut corners to go faster.

The law also gives you a safety net. You are not “surcharged” (made to pay the estate back out of your own pocket) for acts of administration that were authorized when you did them (C.R.S. 15-12-703(2)). You are generally not personally on the hook for a contract you sign for the estate, as long as you reveal that you sign as PR and identify the estate (C.R.S. 15-12-808(1)). And you are personally liable for obligations of owning or running the estate, or for harm caused while you run it, only if you are personally at fault (C.R.S. 15-12-808(2)).

Protecting the house

The statute says a PR has a right to, and shall take, possession or control of the decedent's property. Real property, though, may be left with the person presumptively entitled to it unless you need it for administration (C.R.S. 15-12-709). The same section says you shall “pay taxes on and take all steps reasonably necessary for the management, protection, and preservation of the estate” (C.R.S. 15-12-709). That is the legal backbone for everything below.

The sources for this course do not give tax amounts, due dates, or insurance rules, so none are given here. Ask the county treasurer how property taxes on the house are billed, and ask a tax professional about any tax return.

Insurance. A homeowner policy is a contract with an insurance company. Whether it still covers a house after the owner has died, or while it sits empty, depends on the policy. Call the insurer, tell them the owner has died and that you are the PR (or about to be), and ask in plain words what coverage the house has now and what you must do to keep it. Write down who you spoke to and when. Do not assume.

Keeping an empty house safe. These are common-sense habits, not legal rules: visit often, keep the locks working, forward the mail, keep the lawn and walks tidy, protect the pipes from freezing in winter, and take dated photos of the condition. Ask the insurer whether any of these affect coverage.

Telling creditors: the claim deadline

A creditor is anyone the person owed money to, such as a hospital or a credit card company. A claim is a creditor's written demand to be paid from the estate. The law wants claims to come in by a firm date so the estate can finish.

Notice by publication. Unless a year or more has passed since the death, you must publish a notice to creditors in a newspaper published in the county where the estate is being handled. It runs at least three times, at least once in each of three successive calendar weeks (C.R.S. 15-12-801(1)). The notice sets a claim deadline of “a date not earlier than four months from date of first publication or the date one year from date of death, whichever occurs first” (C.R.S. 15-12-801(1)). The court's form for this is JDF 943.

Notice by mail. You may also send written notice to a creditor. That creditor must present the claim within the later of (a) the date in the published notice, or (b) 60 days from the mailing, but not later than one year from the date of death (C.R.S. 15-12-801(2)). The court's form is JDF 944, and the court's instructions say to send it to known unpaid creditors (JDF 907). You are not liable to a creditor or an heir for giving or failing to give notice (C.R.S. 15-12-801(3)), but notice is what starts the shorter clock, so it is worth doing.

The outer wall. For debts that arose before death, all creditors must present claims within one year after the death or be barred (C.R.S. 15-12-803(1)(a)). For debts that arise at or after death, a claim based on a contract with the PR is due within four months after performance is due, and any other claim within four months after it arises (C.R.S. 15-12-803(2)). This is a nonclaim statute: a deadline that cannot be waived or tolled (paused) (C.R.S. 15-12-803(4)).

One big exception: a mortgage or other lien on the house is not wiped out by these deadlines (C.R.S. 15-12-803(3)(a)). A lien is a creditor's legal claim against a specific piece of property. A mortgage lender can still go after the house.

How claims come in and what you do with them

A claim is presented by filing a written statement with the court clerk or by delivering or mailing it to the court-appointed PR (C.R.S. 15-12-804(1)). It must demand payment and give enough detail for you to check it: the basis, the claimant's name and address, and the amount (C.R.S. 15-12-804(4)). Your own knowledge that a debt exists does not replace a proper written claim (C.R.S. 15-12-804(3)).

You may mail a notice that you disallow a claim. If you do not mail notice of action within 63 days after the time for original presentation has expired, the claim is deemed allowed (C.R.S. 15-12-806(1)). If you disallow it, the creditor has 63 days after the mailing to petition the court or sue, if your notice warns them of that bar (C.R.S. 15-12-806(1)).

Who gets paid first

If the money runs short, the order matters. The law pays allowed claims in this order (C.R.S. 15-12-805(1)): property held as fiduciary, then costs of administration, then reasonable funeral expenses, then debts and taxes with preference under federal law, then reasonable medical expenses of the last illness, then other preferred state debts and certain public-assistance claims, then child support owed, then all other claims. Within one class nobody jumps the line (C.R.S. 15-12-805(2)).

Timing: one year after the death, you proceed to pay allowed claims in that order, after making provision for family and exempt property allowances, pending claims, and unbarred claims that may still show up (C.R.S. 15-12-807(1)). You may pay a just claim earlier, but you can become personally liable to another claimant if you pay early without getting security for a refund, or pay in a way that cheats someone of priority through negligence or willful fault (C.R.S. 15-12-807(2)). So do not hand out money fast to the loudest caller.

Paperwork on your clock

The court's instructions list forms to complete after appointment. JDF 940 (Information of Appointment) goes to the heirs within 30 days. JDF 941 (inventory of assets) is due within three months of appointment, which another court page puts as 90 days. The inventory need not be filed with the court at that time. JDF 942 is the accounting (all from JDF 907 and the court's probate pages). You may employ a qualified, disinterested appraiser to find the fair market value of an asset on the date of death (C.R.S. 15-12-707), which is useful for the house.

Example with real numbers

Priya is PR for her father's estate. The estate has $20,000 in cash. The bills known so far are: $4,000 administration costs, $9,000 funeral, $11,000 last-illness medical, and $15,000 on a credit card. Total claims: $39,000. The cash is less than the claims, so the order decides who gets what.

1. Administration costs come first: $20,000 − $4,000 = $16,000 left.
2. Funeral next: $16,000 − $9,000 = $7,000 left.
3. Last-illness medical next: it is owed $11,000 but only $7,000 remains, so it gets $7,000 and the other $4,000 goes unpaid.
4. The credit card is in the “all other claims” class and gets $0.

Priya did nothing wrong by not paying the card; she followed the law's order. Had she paid the card first, she could be liable to the others who were hurt (C.R.S. 15-12-807(2)). Her next step is to keep every notice and note, and to talk to the court's self-help center or a lawyer.

Not covered by our sources, so ask: insurance vacancy terms, property tax dates, and income tax. Ask the insurer, the county treasurer, and a tax professional.