A small estate affidavit is a sworn legal document that may allow an estate to avoid going through probate. Small estate affidavits are permitted in many states, as long as the value of the estate is small enough. Using one can let an heir claim assets of the deceased in days or weeks instead of the months or years it can take for an estate to go through the probate process. Using a small estate affidavit also cost very little or even nothing, while the probate fees can eat up sizable portions of estate’s value.
A financial advisor can help you create an estate plan that includes wills, trusts and more.
A small estate affidavit is a sworn legal document a person can use to assert a claim to assets from the estate of someone who has died. This can avoid the potentially lengthy and costly probate process. Generally, only family members such as spouses, children, parents, partners or named executors of an estate can use small estate affidavits.
Small estate affidavits are allowed in many but not all states, and rules vary widely. Different jurisdictions may also call them by different names, such as affidavits for collection of personal property or affidavits in lieu of administration.
Standards for small estate value represent one major area of difference. Some states consider an estate small enough for this process only if the value of its assets is less than $10,000. Others have limits that are significantly higher, such as California and Oregon, which have $184,500 and $275,000 limits, respectively.
Most states also require a waiting period after the death before the small estate affidavit can be employed. This varies but is typically about two months.
Another restriction on small estate affidavits is that probate cannot already have begun. Some states also allow small estate affidavits only if there is no will.
Only certain assets count toward setting an estate’s value. These are generally personal items, such as clothing and furniture, as well as bank and brokerage accounts. Assets exempt from probate, such as bank accounts or insurance policies with named beneficiaries, are not included in the small estate value calculation. Jointly owned assets are also left. Any debts owed by the estate are considered and will reduce the value of the estate.
The small estate affidavit normally does not need to be filed with the court. Instead, the affiant – the person who swears the affidavit is true and he or she is entitled to the assets – presents it to the bank, brokerage or other holder of the asset. If the asset holder approves it, the assets will be released to the affiant. A small estate affidavit may also be presented to a state agency, such as motor vehicle division.
There are usually few or no fees to pay when using a small estate affidavit. Court fees, if any, are usually nominal. A notary, often required to validate the signatures on the affidavit, typically costs $20 or less.
A small estate affidavit can be downloaded from the website of the county court where the death occurred. Financial institutions and state agencies such as motor vehicle departments also have them. Affiants can even create their own affidavits.
Summary administration is a shortcut to the often lengthy and usually expensive process of administering an estate through probate. It is the form of estate settlement that uses small estate affidavits. Some states require that a petition to employ summary administration in settling an estate be submitted to the court before the small estate affidavit can be used.
Summary administration can be completed in a week or a month, rather than taking months or years as probate can. However, there is usually a waiting period that must be finished before summary administration can begin.
Most people can fill out a small estate affidavit without an attorney’s help. The form usually needs to state the following:
Various attachments may also need to be included, such as:
The affidavit may also need to be notarized.
Small estate affidavits offer some notable benefits, including:
Small estate affidavits can be very helpful when a person dies intestate, that is, without a will.
Small estate affidavits are not available in all states. Other limits and drawbacks include:
Using a small estate affidavit can require some time and energy. For instance, the affiant is usually required to notify other heirs and interested parties, such as creditors, and get their consent to use the streamlined administration process.
Small estate affidavits can save time and money when administrating estates. They can only be used in some states, and only then when the size of the estate is below the statutory maximum. Small estate affidavits can’t be used for real estate transfers. Presenting a properly completed small estate affidavit to a bank or other asset holder can result in rapid transfer of assets to an heir’s control. However, someone who uses a small estate affidavit can also be exposed to increased liability for any debts owed by the state.
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Mark HenricksMark Henricks has reported on personal finance, investing, retirement, entrepreneurship and other topics for more than 30 years. His freelance byline has appeared on CNBC.com and in The Wall Street Journal, The New York Times, The Washington Post, Kiplinger’s Personal Finance and other leading publications. Mark has written books including, “Not Just A Living: The Complete Guide to Creating a Business That Gives You A Life.” His favorite reporting is the kind that helps ordinary people increase their personal wealth and life satisfaction. A graduate of the University of Texas journalism program, he lives in Austin, Texas. In his spare time he enjoys reading, volunteering, performing in an acoustic music duo, whitewater kayaking, wilderness backpacking and competing in triathlons.
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