Colorado § 15-11-205 - Decedent's nonprobate transfers to others.

§ 15-11-205. Decedent's nonprobate transfers to others.

The value of the augmented estate includes the value of the decedent's nonprobate transfers to others, not included in the decedent's probate estate under section 15-11-204, of any of the following types, in the amount provided respectively for each type of transfer:

(1) Property owned or owned in substance by the decedent immediately before death that passed outside probate at the decedent's death. Property included under this category consists of:

(a) Property over which the decedent alone, immediately before death, held or retained a presently exercisable general power of appointment. The amount included is the value of the property subject to the power, to the extent that the property passed at the decedent's death, by exercise, release, lapse, in default, or otherwise to or for the benefit of any person other than the decedent's estate or surviving spouse; except that property over which the decedent had only a testamentary power of appointment is not included. Property over which the decedent had a general inter vivos power of appointment or withdrawal created in the decedent by a third party is includable unless the governing instrument contains a provision for its termination or lapse, in full or in part, during the life of the decedent.

(b) The decedent's fractional interest in real property held by the decedent in joint tenancy with the right of survivorship created during the marriage to the surviving spouse, except as provided in section 15-11-208, and the decedent's fractional interest in personal property held by the decedent in joint tenancy with the right of survivorship. The amount included is the value of the decedent's fractional interest, to the extent that the fractional interest passed by right of survivorship at the decedent's death to a surviving joint tenant other than the decedent's surviving spouse.

(c) The decedent's ownership interest in property or accounts held in POD, TOD, or co-ownership registration with the right of survivorship. The amount included is the value of the decedent's ownership interest, to the extent that the decedent's ownership interest passed at the decedent's death to or for the benefit of any person other than the decedent's estate or surviving spouse.

(d) Except as provided in section 15-11-208, proceeds of insurance, including accidental death benefits, on the life of the decedent if the decedent owned the insurance policy immediately before death or if and to the extent that the decedent alone and immediately before death held a presently exercisable general power of appointment over the policy or its proceeds. The amount included is the value of the proceeds, to the extent that they were payable at the decedent's death to or for the benefit of the decedent's estate or surviving spouse.

(2) Property transferred in any of the following forms by the decedent during marriage:

(a) Any irrevocable transfer in which the decedent retained the right to the possession or enjoyment of, or to the income from, the property if and to the extent that the decedent's right terminated at or continued beyond the decedent's death. The amount included is the value of the fraction of the property to which the decedent's right related, to the extent that the fraction of the property passed outside probate to or for the benefit of any person other than the decedent's estate or surviving spouse; or

(b) Any transfer in which the decedent created a power over the income or principal of the transferred property, exercisable by the decedent alone or in conjunction with any other person or exercisable by a nonadverse party, for the benefit of the decedent, the decedent's creditors, the decedent's estate, or the creditors of the decedent's estate. The amount included with respect to a power over property is the value of the property subject to the power, and the amount included with respect to a power over income is the value of the property that produces or produced the income, to the extent that the power in either case was exercisable at the decedent's death to or for the benefit of any person other than the decedent's surviving spouse or to the extent that the property subject to the power passed at the decedent's death, by exercise, release, lapse, in default, or otherwise to or for the benefit of any person other than the decedent's estate or surviving spouse. If the power is a power over both income and property and the preceding sentence produces different amounts, the amount included is the greater amount.

(3) Property that passed during marriage and during the two-year period next preceding the decedent's death as a result of a transfer by the decedent if the transfer was of any of the following types:

(a) Any property that passed as a result of the termination of a right or interest in, or power over, property that would have been included in the augmented estate under paragraph (a), (b), or (c) of subsection (1) of this section or under subsection (2) of this section if the right, interest, or power had not terminated until the decedent's death. The amount included is the value of the property that would have been included under those provisions if the property were valued at the time that the right, interest, or power terminated and is included only to the extent that the property passed upon termination to or for the benefit of any person other than the decedent or the decedent's estate, spouse, or surviving spouse. As used in this subparagraph (I), "termination", with respect to a right or an interest in property, occurs when the right or interest terminates by the terms of the governing instrument or the decedent transfers or relinquishes the right of interest and, with respect to a power over property, when the power terminates by exercise, release, lapse, in default, or otherwise; except that, with respect to a power described in subparagraph (I) of paragraph (a) of this subsection (1), "termination" occurs when the power is terminated by exercise or release but not otherwise.

(b) Any transfer of, or relating to, an insurance policy on the life of the decedent if the proceeds would have been included in the augmented estate under subparagraph (IV) of paragraph (a) of this subsection (1) had the transfer not occurred. The amount included is the value of the insurance proceeds to the extent that the proceeds were payable at the decedent's death to or for the benefit of the decedent's estate or surviving spouse.

(c) Any transfer of property, to the extent not otherwise included in the augmented estate, made to or for the benefit of a person other than the decedent's surviving spouse. The amount included is the value of the transferred property to the extent that the aggregate transfers to any one donee in either of the two years exceeded the amount excludable from taxable gifts under 26 U.S.C. sec. 2503 (b) or its successor on the date next preceding the date of the decedent's death.

Source: L. 2014: Entire part R&RE, (HB 14-1322), ch. 296, p. 1223, § 2, effective August 6.

Editor's note: This section is similar to former § 15-11-201 (2)(b) as it existed prior to 2014.