Colorado § 15-12-703 - General duties - relation and liability to persons interested in estate - duty to search for a designated beneficiary agreement - standing to sue.

§ 15-12-703. General duties - relation and liability to persons interested in estate - duty to search for a designated beneficiary agreement - standing to sue.

(1) A personal representative is a fiduciary who shall observe the standards of care applicable to trustees as described by part 8 of article 5 of this title 15. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of any probated and effective will and this code, and as expeditiously and efficiently as is consistent with the best interests of the estate. The personal representative shall use the authority conferred by this code, the terms of the will, if any, and any order in proceedings to which the personal representative is party for the best interests of successors to the estate.

(2) A personal representative shall not be surcharged for acts of administration or distribution if the conduct in question was authorized at the time. Subject to other obligations of administration, an informally probated will is authority to administer and distribute the estate according to its terms. An order of appointment of a personal representative, whether issued in informal or formal proceedings, is authority to distribute apparently intestate assets to the heirs of the decedent if, at the time of distribution, the personal representative is not aware of a pending testacy proceeding, a proceeding to vacate an order entered in an earlier testacy proceeding, a formal proceeding questioning the personal representative's appointment or fitness to continue, or a supervised administration proceeding. This section does not affect the duty of the personal representative to administer and distribute the estate in accordance with the rights of claimants whose claims have been allowed, the surviving spouse, any minor and dependent children, and any omitted child of the decedent as described elsewhere in this code.

(3) Repealed.

(3.5) A personal representative shall not be surcharged for distributions made that do not take into consideration the possible birth of a posthumously conceived child unless prior to such distribution:

(a) The personal representative has received notice or has actual knowledge that there is an intention to use an individual's genetic material to create a child or has received written notice that there may be an intention to use an individual's genetic material to create a child; and

(b) The birth of the child could affect the distribution of the decedent's estate.

(4) Except as to proceedings which do not survive the death of the decedent, a personal representative of a decedent domiciled in this state at death has the same standing to sue and be sued in the courts of this state and the courts of any other jurisdiction as the decedent had immediately prior to death.

(5) A personal representative shall not be surcharged for distributions made that do not take into consideration a designated beneficiary agreement if:

(a) The personal representative has reviewed the records of the county clerk and recorder's office in every county in Colorado in which the personal representative has actual knowledge that the decedent was domiciled at any time during the three years prior to the decedent's death for a valid, unrevoked designated beneficiary agreement in which the decedent granted the right of intestate succession; and

(b) The personal representative has not received actual notice nor has actual knowledge of the existence of a valid, unrevoked designated beneficiary agreement in which the decedent granted the right of intestate succession.

(6) Subject to the good faith standard of section 15-10-602 (6), the provisions of section 15-10-605, and subsections (7) and (8) of this section, personal representatives, persons with priority for appointment as personal representative, and court-appointed fiduciaries may ascertain the testator's probable intent or estate planning purpose on issues involving the decedent's estate and, where not contrary to public policy or law, shall have standing and may prosecute or defend that intent or purpose, at the expense of the estate, in proceedings brought under this code.

(7) Without limiting the general applicability of subsection (6) of this section:

(a) (I) A person serving as personal representative or a person nominated as personal representative in a will or appointed as public or special administrator has standing, but no duty, to offer a will for probate. If such person declines or is unable to offer the will for probate, any person who is a successor of the decedent under the will may offer the will for probate and defend the validity of the will in proceedings under this code. In either case, the person may act notwithstanding the fact that he or she may be a devisee under the will. The will proponent's reasonable fees and costs are payable as an expense of administration.

(II) For purposes of this subsection (7), a proponent other than the nominated personal representative should be treated as a nominated personal representative in cases where the nominated personal representative has declined or is unable to offer the will for probate. Such treatment shall not confer upon the proponent a higher priority for appointment than was conferred upon such proponent pursuant to section 15-12-203 before the will was offered for probate.

(b) The personal representative has standing to oppose, at estate expense, a person's claim to be an heir; an omitted spouse or child; a spouse, including a common law spouse; or a devisee.

(c) The personal representative has standing to oppose, at estate expense, a surviving spouse's attempt to invalidate a marital agreement that limits his or her share in the estate.

(d) Where a surviving spouse petitions for an elective share, the court proceeding is an action between the spouse and the interested person or persons whose interests may be affected, and the personal representative is a neutral party to the proceeding. In such a proceeding, the fees and costs reasonably incurred by the personal representative and his or her agents in providing basic information to the parties regarding the augmented estate are payable as an estate expense. The personal representative may prepare a calculation of the augmented estate at estate expense.

(8) (a) In any proceeding brought under this code where any personal representative, person with priority for appointment as a personal representative, nominated personal representative, or court-appointed fiduciary purports to participate in the proceeding at estate expense and has a material conflict of interest, any interested person may petition the court pursuant to section 15-12-614 (1)(b) or 15-12-713 for the appointment of an independent special administrator to represent, to the extent the court directs, the estate's interests in the litigation at estate expense.

(b) For purposes of this subsection (8), the fact that a personal representative, a person with priority for appointment as a personal representative, a nominated personal representative, or a court-appointed fiduciary is also a successor or a potential successor of the estate is not, in and of itself, a material conflict of interest.

Source: L. 73: R&RE, p. 1587, § 1. C.R.S. 1963: § 153-3-703. L. 75: (3) repealed, p. 606, § 62, effective July 1. L. 2010: (3.5) added, (SB 10-199), ch. 374, p. 1751, § 14, effective July 1. L. 2011: (3.5)(a) amended, (SB 11-083), ch. 101, p. 303, § 5, effective August 10. L. 2012: (5) added, (SB 12-131), ch. 114, p. 393, § 1, effective April 13. L. 2013: (6), (7), and (8) added, (SB 13-077), ch. 190, p. 767, § 3, effective August 7. L. 2018: (1) amended, (SB 18-180), ch. 169, p. 1193, § 12, effective January 1, 2019. L. 2022: (1), (2), and (4) amended, (SB 22-092), ch. 60, p. 279, § 13, effective August 10.

Cross references: For the duty of a personal representative to take possession of decedent's estate, see § 15-12-709.

COMMENT

This and the next section are especially important sections for they state the basic theory underlying the duties and powers of personal representatives. Whether or not a personal representative is supervised, this section applies to describe the relationship he bears to interested parties. If a supervised representative is appointed, or if supervision of a previously appointed personal representative is ordered, an additional obligation to the Court is created. See Section 3-501.

The fundamental responsibility is that of a trustee. Unlike many trustees, a personal representative's authority is derived from appointment by the public agency known as the Court. But, the Code also makes it clear that the personal representative, in spite of the source of his authority, is to proceed with the administration, settlement and distribution of the estate by use of statutory powers and in accordance with statutory directions. See Sections 3-107 and 3-704. Subsection (b) is particularly important, for it ties the question of personal liability for administrative or distributive acts to the question of whether the act was "authorized at the time". Thus, a personal representative may rely upon and be protected by a will which has been probated without adjudication or an order appointing him to administer which is issued in no-notice proceedings even though proceedings occurring later may change the assumption as to whether the decedent died testate or intestate. See Section 3-302 concerning the status of a will probated without notice and Section 3-102 concerning the ineffectiveness of an unprobated will. However, it does not follow from the fact that the personal representative distributed under authority that the distributees may not be liable to restore the property or values received if the assumption concerning testacy is later changed. See Sections 3-909 and 3-1004. Thus, a distribution may be "authorized at the time" within the meaning of this section, but be "improper" under the latter section.

Paragraph (c) is designed to reduce or eliminate differences in the amenability to suit of personal representatives appointed under this Code and under traditional assumptions. Also, the subsection states that so far as the law of the appointing forum is concerned, personal representatives are subject to suit in other jurisdictions. It, together with various provisions of Article IV, are designed to eliminate many of the present reasons for ancillary administrations.

1997 Technical Amendment. By technical amendment effective July 31, 1997, the final sentence of Section 3-703(b) was modified to clarify the originally intended meaning that a personal representative of a decedent's estate does not owe fiduciary duties to a person whose claim has not yet been allowed. This added language is not intended to affect any duty to give notice to prospective claimants under Section 3-801 or Tulsa Professional Collection Services v. Pope, 485 U.S. 478 (1988).

ANNOTATION

Personal representatives vested with broad powers. In order to facilitate the performance of this statutory duty, personal representatives are vested with broad powers. Fry & Co. v. District Court, 653 P.2d 1135 (Colo. 1982).

Personal representative cannot recover noneconomic damages such as emotional stress or loss of enjoyment of life. Only the personal representative acting on behalf of an estate and not a beneficiary may represent an estate in the interest of the beneficiaries in a malpractice action. Hill v. Boatright, 890 P.2d 180 (Colo. App. 1994), aff'd in part, rev'd in part on other grounds sub nom. Boatright v. Derr, 919 P.2d 221 (Colo. 1996).

When beneficiaries are not indispensable parties to partition action. Estate beneficiaries are not indispensable parties to a partition action commenced by the personal representative, where the personal representative is acting on behalf of all the estate beneficiaries to segregate their collective interests in the real property to be partitioned, so that he can perform his statutory duty to settle and distribute the estate expeditiously and efficiently. Fry & Co. v. District Court, 653 P.2d 1135 (Colo. 1982).

By law the executor of an estate has no choice but to tender all the assets bequeathed to the various beneficiaries, for were he not to do so, he would subject himself to suit by the beneficiaries. Estate of Riggs v. Midwest Steel & Iron Works, 36 Colo. App. 302, 540 P.2d 361 (1975).

A personal representative has a duty to exercise the representative's powers in a neutral fashion and in the best interests of all intended beneficiaries and interested persons. In re Estate of Treviño, 2020 COA 125, 474 P.3d 223.

A personal representative, who is the sole beneficiary of the estate, breaches the representative's duty when the representative fails to use the estate's available liquid assets to pay or reduce the amount due on a loan but instead uses money from a payable on death certificate of deposit account that is owned by another. In re Estate of Treviño, 2020 COA 125, 474 P.3d 223.

Section does not empower a personal representative to resolve a dispute after it has been raised in the probate court. Personal representative's discretion was limited to deciding whether the estate would accede or seek reformation of a conveyance for mistake. If the personal representation chose to seek reformation, the probate court was obligated to take evidence and make a ruling. In re Estate of Beren, 2012 COA 203, 412 P.3d 487, aff'd in part, rev'd in part on other grounds, 2015 CO 29, 349 P.3d 233.