CO Code § 15-12-805 (2021)
2021 Colorado Code|Title 15 - Probate, Trusts, and Fiduciaries|Article 12 - Probate of Wills and Administration|Part 8 - Creditors' Claims|§ 15-12-805. Classification of Claims

  The personal representative shall pay allowed claims against the estate of a decedent in the following order:   Property held by or in the possession of the deceased person as fiduciary or trustee of a trust, which shall include a resulting trust, as long as the reasonable expenses of administering such property and of investigating and determining such claim, as provided by section 15-10-602, but subject to section 15-10-605, shall be paid from such property as determined by the court;    Other costs and expenses of administration;    Reasonable funeral and final disposition expenses;    Debts and taxes with preference under federal law;    Reasonable and necessary medical and hospital expenses of the last illness of the decedent, including compensation of persons attending him or her;    Debts and taxes with preference under other laws of this state;  (f.5) The claim of the department of health care policy and financing for the net amount of medical assistance, as defined in section 25.5-4-302 (5) , C.R.S., paid to or for the decedent;   (f.7) The claim of a county department of human or social services or the state department of human services for the excess public assistance paid for which the recipient was ineligible;     Any child support obligations of the decedent that were due and unpaid at death in accordance with a valid court order or agreement of record in which the decedent was a party, and any future child support obligations of the decedent as determined by the court;    All other claims.       No preference shall be given in the payment of any claim over any other claim of the same class, and a claim due and payable shall not be entitled to a preference over claims not due.     History. Source: L. 73: R&RE, p. 1593, § 1. C.R.S. 1963: § 153-3-805. L. 79: (1)(a) amended, p. 650, § 11, effective July 1. L. 91, 2nd Ex. Sess.: (1)(f.5) added, p. 91, § 7, effective October 16. L. 94: (1)(f.5) amended, p. 2647, § 113, effective July 1. L. 96: (1)(f.5) amended, p. 824, § 8, effective May 23. L. 2002: (1) amended, p. 653, § 9, effective July 1. L. 2006: (1)(f.5) amended, p. 2002, § 49, effective July 1; (1)(f.7) added, p. 948, § 5, effective August 7. L. 2011: (1)(a) amended,(SB 11-083), ch. 101, p. 304, § 7, effective August 10. L. 2013: (1)(g) amended and (1)(h) added,(SB 13-077), ch. 190, p. 770, § 5, effective August 7. L. 2014: IP(1) and (1)(g) amended,(HB 14-1322), ch. 296, p. 1234, § 5, effective August 6. L. 2018: (1)(f.7) amended,(SB 18-092), ch. 38, p. 404, § 19, effective August 8. L. 2021: (1)(c) amended,(SB 21-006), ch. 123, p. 493, § 15, effective September 7. History. Source: L. 73: R&RE, p. 1593, § 1. C.R.S. 1963: § 153-3-805. L. 79: (1)(a) amended, p. 650, § 11, effective July 1. L. 91, 2nd Ex. Sess.: (1)(f.5) added, p. 91, § 7, effective October 16. L. 94: (1)(f.5) amended, p. 2647, § 113, effective July 1. L. 96: (1)(f.5) amended, p. 824, § 8, effective May 23. L. 2002: (1) amended, p. 653, § 9, effective July 1. L. 2006: (1)(f.5) amended, p. 2002, § 49, effective July 1; (1)(f.7) added, p. 948, § 5, effective August 7. L. 2011: (1)(a) amended,(SB 11-083), ch. 101, p. 304, § 7, effective August 10. L. 2013: (1)(g) amended and (1)(h) added,(SB 13-077), ch. 190, p. 770, § 5, effective August 7. L. 2014: IP(1) and (1)(g) amended,(HB 14-1322), ch. 296, p. 1234, § 5, effective August 6. L. 2018: (1)(f.7) amended,(SB 18-092), ch. 38, p. 404, § 19, effective August 8. L. 2021: (1)(c) amended,(SB 21-006), ch. 123, p. 493, § 15, effective September 7.    Editor's note:   Section 31(2) of chapter 123 (SB 21-006), Session Laws of Colorado 2021, provides that the act changing this section applies to final dispositions of human remains or human fetuses made on or after September 7, 2021.   Cross references:   For the legislative declaration contained in the 1994 act amending this section, see section 1 of chapter 345, Session Laws of Colorado 1994. For the legislative intent contained in the 2006 act enacting subsection (1)(f.7), see section 8 of chapter 208, Session Laws of Colorado 2006. For the legislative declaration in SB 18-092, see section 1 of chapter 38, Session Laws of Colorado 2018.   ANNOTATION   Analysis     I. GENERAL CONSIDERATION.    II. PERSONAL PROPERTY HELD BY DECEASED AS TRUSTEE.    III. COSTS OF ADMINISTRATION.    IV. FUNERAL EXPENSES.    V. OTHER CLAIMS.     I. GENERAL CONSIDERATION.   Law reviews. For article, “Colorado Bar Association Meeting”, see 23 Dicta 261 (1946). For article, “Curative Statutes of Colorado Respecting Titles to Real Estate”, see 26 Dicta 281 (1949). For note, “The Tax Liability of the Executor”, see 28 Rocky Mt. L. Rev. 95 (1955). For article, “Some Suggested Changes in the Colorado Statutes Concerning Wills and Estates”, see 29 Rocky Mt. L. Rev. 595 (1957). For article, “JDF 999 Collection of Personal Property by Affidavit Pursuant to CRS §§ 15-12-1201 and -1202”, see 42 Colo. Law. 49 (June 2013).   Annotator's note. Since § 15-12-805 is similar to repealed § 153-12-2, C.R.S. 1963, § 152-12-2, CRS 53, CSA, C. 176, § 195, and laws antecedent thereto, relevant cases construing those provisions have been included in the annotations to this section. Annotator's note. Since § 15-12-805 is similar to repealed § 153-12-2, C.R.S. 1963, § 152-12-2, CRS 53, CSA, C. 176, § 195, and laws antecedent thereto, relevant cases construing those provisions have been included in the annotations to this section.   The purpose of the provision allowing certain claims in an estate to be given first priority was to avoid subjecting property not owned by the decedent to disposition by the estate. In re Estate of Gray, 37 Colo. App. 47, 541 P.2d 336 (1975).   Section should not be extended beyond language used. A statute giving a preference to one class of claims over all others should not be construed to extend farther than its language clearly demands. McCutchen v. Osborne, 61 Colo. 408 , 158 P. 136 (1916).   The provisions of this section are mandatory. State ex rel. Zimmerman v. Estate of Petzoldt, 126 Colo. 76 , 246 P.2d 909 (1952).   Section not applicable to claim against estate of incompetent. This section, setting up classes of claims to be filed in an estate, applies to the estate of a deceased person, and, standing alone, clearly is not applicable to a conservatorship of the estate of a mental incompetent. The general assembly recognized the inapplicability of this section to conservatorships when it enacted § 15-14-428 especially applying to that subject. State ex rel. Zimmerman v. Estate of Petzoldt, 126 Colo. 76 , 246 P.2d 909 (1952).   Section not applicable when determining whether a disability trust qualifies for exemption from the Medicaid calculation. Stell v. Colo. Dept. of Health Care Policy & Fin., 78 P.3d 1142 (Colo. App. 2003), rev'd on other grounds, 92 P.3d 910 (Colo. 2004).   Classification of claims within probate jurisdiction of the district court. Whitlock v. Alliance Coal Co., 73 Colo. 205 , 214 P. 546 (1923).   After the sale a secured creditor shares pro rata with other creditors. In the case of a secured creditor, after the property mortgaged has been sold and its proceeds applied to his debt, leaving a balance unpaid, as to that balance the creditor is no longer a mortgage creditor, but is entitled only to have the same paid from the fund realized from the general assets of the estate pro rata with other creditors. Erle v. Lane, 22 Colo. 273 , 44 P. 591 (1896).   II. PERSONAL PROPERTY HELD BY DECEASED AS TRUSTEE.   Fiduciary relationship must exist. Both parties were attorneys, and aware that specificity of language or conduct is required to prove the essential elements of an express trust. Had they intended a fiduciary relationship, they would have used language which speaks of more than the debtor-creditor relationship evident. Fleming v. Singer, 168 Colo. 195 , 450 P.2d 635 (1969).   The word “trustee” in this section, is to be construed in connection with the other words of the section, and as importing a technical and special trust, not the bailee of chattels, in a particular instance, charged with the duty to sell and account for the proceeds. McCutchen v. Osborne, 61 Colo. 408 , 158 P. 136 (1916).   This paragraph does not encompass a demand against a decedent's estate founded upon the receipt of certain negotiable paper, to be sold by decedent, and the proceeds accounted for. The deceased is not regarded as a trustee within this section. McCutchen v. Osborne, 61 Colo. 408 , 158 P. 136 (1916).   Likewise, partial assignment of a chose in action does not in and of itself render an assignor a trustee for the assignee. It does not, as a matter of law, necessarily create a fiduciary relationship between the partial assignor and the partial assignee. Fleming v. Singer, 168 Colo. 195 , 450 P.2d 635 (1969).   Where the trustee under a trust deed releases the trust deed and wrongfully appropriates the money received for the release to his own use, he holds the fund in trust, for which a claim against his estate should be allowed under this section. Chavez v. Gallup, 77 Colo. 141 , 235 P. 345 (1925).   III. COSTS OF ADMINISTRATION.   Expenses incurred in settlement of the estate are claims against the estate encompassed by subsection (1)(c). Fleming v. Kelly, 18 Colo. App. 23, 69 P. 272 (1902); United States Fid. & Guar. Co. v. People ex rel. Miller, 44 Colo. 557 , 98 P. 828 (1908); Proudfit v. Coons, 137 Colo. 353 , 325 P.2d 273 (1958).   Section 15-12-803 does not apply to expenses incurred in the administration and settlement of the estate. Gordon-Tiger Mining & Reduction Co. v. Loomer, 50 Colo. 409 , 115 P. 717 (1911).   The executrix may treat the federal estate taxes and the state inheritance and succession taxes as a part of the cost of administration and as a claim against the estate under subsection (1)(c). In turn such claims against the estate are satisfied by contributions or abatements from the bequests and devises of the testator's will or by payment from the estate assets if the testator so provides. Meier v. Denver United States Nat'l Bank, 164 Colo. 25 , 431 P.2d 1019 (1967).   Purchases to replenish stock of goods. Generally speaking, an administrator may not continue the business of the decedent, nor use the assets of the estate for business purposes. To this rule, however, there are exceptions. Where the decedent was engaged in the mercantile or manufacturing business, his representative may, under order of court, carry on the business for a sufficient time to close it up. The administrator, if properly authorized, could continue the business for the purpose of disposing of the stock to advantage, and might purchase necessary merchandise to make the property more salable. Such purchases would constitute a proper claim in the settlement of the estate. A person from whom he bought goods could present the claim to the court for allowance, and § 15-12-803 from the very nature of the transaction would not apply. Gordon-Tiger Mining & Reduction Co. v. Loomer, 50 Colo. 409 , 115 P. 717 (1911).   Attorney fees for services rendered personal representative of decedent's estate are costs of administration. United States Fid. & Guar. Co. v. People ex rel. Miller, 44 Colo. 557 , 98 P. 828 (1908); In re Curtis Estate, 103 Colo. 361 , 86 P.2d 260 (1938).   No allowance may be made out of the estate of a deceased person for the services of an attorney not employed by the personal representative of the estate, where the services are rendered for the sole benefit of an individual or group of individuals interested in the estate, and where the services are rendered in a proceeding purely personal and adversary between the parties. Proudfit v. Coons, 137 Colo. 353 , 325 P.2d 273 (1958).   An unauthorized loan is not a claim against the estate. An order of the court to carry on a mercantile business, and replenish the stock as occasion may require, carries no implied authority to borrow money, and a loan made in such case is not a claim against the estate. Gordon-Tiger Mining & Reduction Co. v. Loomer, 50 Colo. 409 , 115 P. 717 (1911).   IV. FUNERAL EXPENSES.   Funeral expenses and expenses of last illness both appear as claims under this section and both items constitute valid claims, and the estate of deceased wife is primarily liable for both to husband who paid same. In re Kefover's Estate, 112 Colo. 53 , 145 P.2d 879 (1944).   V. OTHER CLAIMS.   Law reviews. For comment on Eisenberg v. Reininger, appearing below, see 9 Rocky Mt. L. Rev. 294 (1937).   Under prior law a widow's allowance, while in nature of cost of administration, was only superior to fifth class claims. Eisenberg v. Reininger, 90 Colo. 511 , 10 P.2d 945 (1932).   State hospital's claim falls within this section. Although the personal representative has the duty to pay the hospital's claim to the extent of the assets, such payment is to be made in the order of priority provided for in this section. State v. Estate of Taylor, 29 Colo. App. 231, 484 P.2d 1262 (1971).   Since decedent held funds pursuant to an agency coupled with an interest, his rights thereto pass to his personal representative, and the first class claim section of this section does not apply. In re Estate of Gray, 37 Colo. App. 47, 541 P.2d 336 (1975).