Opinion ID: 2823814
Heading Depth: 3
Heading Rank: 1

Heading: The Colorado Probate Code Displaces a Probate Courtâs Equitable Power to Tie a Remedy to How the Augmented Estateâs Property Performed After the Decedentâs Death

Text: Â¶23Â Â Â Â Â Â The plain language of a specific provision of the Probate Code, section 15-11-202(1), displaces a probate courtâs authority to change the date on which it values the property in the augmented estate. We conclude that the probate court abused its discretion by using appreciation and income to the estate to calculate an equitable adjustment to the surviving spouseâs elective share. Â¶24Â Â Â Â Â Â The probate court stated that it intended the equitable adjustment to replicate the estateâs increase in value during probate administration: âIt was the Courtâs intentionÂ that the calculation account for appreciation of assets and income to the estate over the selected period.â The court calculated a rate of return on the value of the entire augmented estate between May 1, 2000 (the date at which it found the elective share should have been determined and distributed), and December 31, 2007 (the date the court deemed the distribution date, even though the estate was not completely distributed until 2010). The court then applied that rate of return to the undistributed balance of Mrs. Berenâs elective share, compounded monthly between those dates, resulting in a $24.5 million equitable adjustment. But by selecting the elective share, Mrs. Beren chose to treat the marriageâs property as a partnership, subject to the statutory framework. Â¶25Â Â Â Â Â Â However, the Colorado Probate Code sets a particular formula for calculating an elective share and states a specific time at which property values for the augmented estate are measured: the decedentâs date of death. See Â§Â§ 15-11-201 to -208, C.R.S. (2014). Fixing the elective shareâs valuation on a specific date signifies that fluctuating estate values do not affect the elective-share proceedings. Here, by tying its equitable adjustment to how the estateâs assets performed during probate administration, the probate courtâcontrary to Coloradoâs 1994 Probate Code amendments rejecting the fractional share theoryâattempted to preserve the spouseâs fractional interest in the increasing value of the augmented estate. Thus, the equitable remedy the probate court chose conflicts with the Codeâs plain language basing the elective share amount on the value of property in the augmented estate on the decedentâs date of death. See Â§Â§ 15-11-201(11), -202(1). The probate court cannot tie an equitable remedy to theÂ augmented estateâs appreciation or depreciation after the date of a decedentâs death in an elective-share proceeding. Because the equitable remedy in this case was based on the increase in value of the entire estate, we conclude that its exercise of equity irreconcilably conflicts with the Codeâs plain language. Â¶26Â Â Â Â Â Â In this case, the augmented estateâs amount substantially increased in the years following Mr. Berenâs death because the value of many of its assetsâespecially oil and gas assetsâgrew. As of the date of this opinion, the price of oil has dropped, which likely decreased the value of the assets in this estate. The volatile nature of the value of these assets illustrates the General Assemblyâs intention to base valuation of the estateâs assets on the decedentâs date of death, not on how the assets perform subsequently. Doing so, depending on the circumstances, could prevent a surviving spouse from obtaining fifty percent of the marital-property portion of the augmented estate if the value of the properties in the augmented estate decreased below their value as of the decedentâs date of death. Adhering to that date as a bright line for valuation guarantees that the surviving spouse obtains the benefit of the marriage bargain. Â¶27Â Â Â Â Â Â Therefore, the plain language of a particular statutory provision dealing with the spouseâs elective share, section 15-11-202(1), disallows the probate court from basing an equitable remedy on how the augmented estate performs after the decedentâs death. A contrary view would remove the âdate of deathâ phrase in the definition of âvalue.â See Â§ 15-11-201(11). By tying the equitable adjustment to the entire augmented estateâs rate of return years after Mr. Berenâs death, the probate courtâs exercise of equityÂ conflicted with the definition of âvalue,â which anchors the elective share to the valuation of assets at the decedentâs date of death.