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Avoid Probate and Collect Your Inheritance with a Small Estate Affidavit

If you recently lost a loved one, the process of trying to settle their estate can be confusing. In many cases, the deceased person’s estate must go through probate court before assets can be distributed to heirs. This is true whether or not your loved one had a valid will, although a will can go a long way in simplifying the process and ensuring assets pass according to the deceased person’s wishes. However, in certain situations, a Small Estate Affidavit can be used to simplify estate administration.

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Can a small estate be settled without going through probate?

No two estate administrations are exactly the same; the process will depend on the types of assets your loved one owned, how those assets were titled, and the laws of the state where your loved one lived (and where they owned property, if different from their state of residence).

Some assets pass directly to named beneficiaries or joint owners outside of any court proceedings. For example, if your deceased loved one had a retirement plan or life insurance policy where they named individuals or charitable organizations as beneficiaries, those assets pass outside of the estate. Similarly, a bank account or investment owned as “joint tenants with rights of survivorship” will pass to the other named joint tenant(s) without having to go through a court proceeding, and assets held in trust pass according to the terms of the underlying trust agreement.

In general, any assets titled solely in the deceased person’s name are considered “probate assets,” meaning that they pass according to the deceased person’s will if they left one or, if not, according to state law. Fortunately, some states’ laws provide for Small Estate Affidavits, which allow heirs to collect assets without the need for probate court administration.

What is a small estate?

You will need to consult the laws of the state where your loved one lived to determine if your loved one’s estate meets the definition of a “small” estate.

In some states, a small estate is one where the deceased person did not own any real estate in his or her name alone and the total value of their probate assets at the time of death was less than $30,000. In other states, this threshold is $50,000, $75,000, $100,000, or even up to $150,000.

When adding up the total value of probate assets, remember that the total generally includes any assets in the deceased person’s name alone, without a joint owner or a beneficiary. This may include bank accounts, vehicles, investments, tangible personal property, bonds, cash, and more. You may be able to deduct the amount owed on an asset (the outstanding balance on a car loan, for example). Again, it is important to understand state-specific requirements before proceeding with a Small Estate Affidavit.

What is the purpose of a small estate affidavit?

Probate proceedings can be expensive, time-consuming, and lengthy, resulting in potentially significant time delays before heirs are entitled to receive their shares of the estate assets. Probate proceedings are also matters of public interest, meaning that anyone can see the details of the probate matter once the estate has been opened with the court.

If your deceased loved one’s estate falls under the definition of a “small estate,” and state laws allow for the use of Small Estate Affidavits, it may be possible to collect your loved one’s assets within 30-40 days after their death, without having to go through probate court at all. While you will still need to provide notice of death for your loved one, you can potentially avoid a lengthier, more overwhelming administration process.

How much does it cost to file a small estate affidavit?

Here again, you will need to check state-specific rules to determine whether you need to file your affidavit with the court.

In most cases, you do not need to file the Small Estate Affidavit with the court. Instead, you submit the affidavit along with proof of death (generally, a certified copy of the deceased person’s death certificate is required) with the bank or other financial institution holding the deceased person’s assets. The affidavit is intended to assure the financial institution that the estate qualifies for the small estate exemption so they can distribute account assets without probate court letters testamentary or letters of administration.

Estate Administration Help and Guidance is Available

Handling the estate of a deceased loved one can be overwhelming. The Rocket Lawyer Survivor Checklist can help you identify and manage the forms and documents you will need, providing a roadmap to help ensure nothing is missed.

For personalized assistance to help manage estate administration steps, and to determine whether your loved one’s estate may qualify to use a Small Estate Affidavit, talk to a Rocket Lawyer On Call® attorney for guidance today.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

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