When an individual passes away, their estate (i.e., property, assets, personal belongings, and debts) gets distributed to their named beneficiaries, such as heirs, devisees in a will, and various other parties. How an estate is actually to be distributed is typically defined in the provisions of a will or trust document.
The estate property will officially be distributed through a probate proceeding. Probate is the legal process by which someone’s estate is distributed under court supervision. Probate may be used to determine the legal validity of the will or to correctly distribute the estate’s assets to any beneficiaries named in the will. It is also used to establish a plan for paying off any outstanding taxes or debts the estate owes.
The probate process takes a long time. Larger estates take a longer time to settle than others due to the size and complexity of the deceased individual’s estate. Other times, there may be disputes over how property is distributed and who receives what gifts. These factors can cause the probate process to extend as much as two or three years and thus delay the distribution of the gifts to the heirs for a long time.
Small Estate Administration
To speed up this process, the law created a procedure to oversee property distribution in connection with smaller estates. Estates that are smaller in property amount and size don’t have the legal complications that can arise with larger estates. Most jurisdictions have provided an option for these situations known as “small estate administration” to speed up the execution and distribution of these estates.
This streamlined process takes less time, paperwork, and expense than normal estate administration. This option is designed to resolve simple distributions quickly and clear up probate dockets for more complex cases.
To begin a small estate administration, someone must file a small estate affidavit. Only certain parties can file a small estate affidavit (e.g., heirs, spouses, domestic partners, children, etc.) In some states, the executor of a will may file the affidavit; in others, estates that have a will do not qualify for small estate administration.
A small estate affidavit is a legal document that authorizes the transfer of property or assets from a will to specific individuals without them having to go through the probate process to receive it. This can be very beneficial for a deceased testator’s beneficiaries since the probate process is often time-consuming and fairly costly.
In general, small estate affidavit forms will typically require the individual completing it to list:
- The interested parties (those who might have the right to benefit from the estate, such as relatives)
- Descriptions and values of the property to be transferred
- Information about the deceased
- Various other items mandated by state law
Once the affidavit is completed, it must be filed with the court clerk. The court clerk will approve or deny the right to use small estate administration. Some jurisdictions may also require a judge to oversee the administration of the estate.
Note that in determining the estate’s value, one important factor is the market value of the decedent’s home at the time of the decedent’s death. For example, in states that require individuals to use the market value of the property at the time of a decedent’s death, this can cause otherwise small estates to be unable to use the small estate administration process. However, if the individual resides in a state where the law says to subtract the amount still owed on the property at the time of a decedent’s death (that is, the mortgage), then the estate may still qualify.
When Can a Small Estate Affidavit Be Used?
As previously mentioned, whether an individual can use a small estate affidavit will depend on the laws of their particular state. Small estate administration is used when a deceased individual’s property is low enough in value that it does not need to be distributed through the formal probate process. In most states, there is a ceiling or maximum amount that is used to indicate when an estate may qualify as a small estate.
The amount ranges from as little as $50,000 to as much as $150,000). Any estates that do not meet the requirements for small estates will need to go through the full probate process.
Once an individual determines whether a decedent’s estate qualifies as a small estate, they should find out whether the deceased had a last will and testament. As mentioned earlier, some states will allow an estate that is governed by a will to use the small estate administration process, while other states will only allow a small estate affidavit to be used if the decedent died intestate.
If you need help determining whether you are eligible to file a small estate affidavit or have any questions about small estate affidavits, you should speak to an estate planning lawyer in your area for further advice.
If the individual who wants to file the small estate affidavit is convinced that the estate is eligible for small estate administration, they should review their state’s laws to see if enough time has passed to begin the process. Some states require that a certain amount of time passes before a small estate affidavit can be filed; this is often a two-month waiting period.
When Can Small Estate Affidavits NOT Be Used?
There are several situations in which a small estate affidavit may not be used. For instance, a small estate affidavit may not be used if standard probate proceedings have started. Small estate affidavits can also not be used when the estate’s value exceeds the limits that define a small estate.
Some states prohibit the transfer of real estate through small estate administration and require instead that the property go through the standard probate process. Some states even exclude registered watercraft (e.g., boats or jet skis), motor vehicles, and out-of-state property.
In contrast, some common non-probate assets eligible for transfer under a small estate affidavit include trust assets, retirement benefits, life insurance, jointly owned properties, and assets held in a payable-on-death bank account.
Do I Need a Lawyer for Help with Small Estate Affidavits?
Small estate affidavits are becoming increasingly popular as a way to attempt to bypass the standard probate process. The use of these affidavits has become so widespread in many states that the scope of the items that can be transferred by small estate administration is expanding as well.
As previously mentioned, each state has different laws and requirements that may affect the types of property that can be transferred under a small estate affidavit. To find out whether you can claim property through a small estate affidavit, you should consider contacting a local estate planning lawyer for further advice.
An experienced estate planning lawyer will be able to assist you in completing and filing the affidavit, as well as guiding you through the necessary subsequent steps. Your lawyer can also answer any specific questions you may have about a small estate affidavit and can help you file a claim should any disputes arise in connection with your affidavit (e.g., if a property owner refuses to transfer certain assets or property).
In addition, your lawyer can fix any errors that may be corrected if your affidavit is denied and can provide representation if you need to attend a court hearing.