Losing a loved one is extremely difficult for any family. However, while the time following a family member's passing should be spent grieving, the reality is that there are a variety of steps that heirs will have to take to manage their loved one's estate. This process can be particularly complicated if one dies without a will or any other type of estate plan (this is formally referred to as dying "intestate").
Traditionally, when someone dies intestate, their estate will have to go through probate court. Probate ensures that a deceased individual's estate is distributed to their legal heirs in accordance with the estate laws in their state of residence. However, probate can be a lengthy, expensive, and stressful process that can place an unnecessary burden on families during an already difficult time.
Fortunately, Texas offers shortcuts and alternatives to the probate process for small estates. These legal processes speed up and simplify the process of transferring assets from a decedent to their heirs without having to deal with formal probate proceedings. If your loved one left behind a relatively small estate, you may be able to use a process known as a small estate affidavit to avoid full probate. If you are unfamiliar with small estate affidavits, read on for answers to the most frequently asked questions we receive about this process.
What Is a Small Estate Affidavit?
Of course, the first thing that you may find yourself asking is what a small estate affidavit is. A small estate affidavit is a form one can complete to speed the settlement of a small estate through probate, and in some cases, it may allow you to bypass the probate process altogether. For the purposes of filling out a small estate affidavit, a small estate is considered to be an estate with a value of $75,000 or less.
With these small estates, if a deceased individual died intestate, an inheritor can use a small estate affidavit to transfer assets from their loved one's estate to their heirs. All an inheritor has to do is prepare a document stating their legal claim to a certain asset, which is then signed under oath, allowing the estate's assets to be easily transferred to the deceased individual's heir(s). (Keep reading for more information on the process of filing a small estate affidavit below).
It is important to note that the $75,000 limit pertains to the value of a decedent's probate estate. The probate estate consists of property and assets titled in the decedent's name excluding the value of the homestead, assets placed in a trust, assets that transfer by payable-on-death accounts, and other exempt property.
When Can a Small Estate Affidavit be Used?
While a small estate affidavit can be an affordable way to easily transfer property to a decedent's heirs, an estate must meet certain criteria in order for a small estate affidavit to be used. In addition to an estate needing to have $75,000 or less in assets, to qualify for a small estate affidavit in Texas an estate must meet the following requirements:
- The decedent died without a will.
- Thirty days have passed between the date of death and the filing of the affidavit.
- The decedent left less than $75,00 in a property (not including homestead property and exempt property).
- Assets in the estate are worth more than their debts. (This excludes debts secured by the homestead and exempt property).
- The only real property owned by the deceased was their homestead property, and the homestead property will be inherited only by the decedent's surviving spouse and children who resided on the property with the decedent at the time of their death.
- You are able to contact all of the deceased's heirs, and all of the heirs will be signing the small estate affidavit (or someone with legal authority will sign on their behalf).
- There must be no petition for the appointment of a personal representative of the estate pending or granted.
In addition to meeting the above requirements, an estate must not have already started the probate process in order for a small estate affidavit to be used.
What Is Exempt Property?
When trying to determine if you can use a small estate affidavit when handling a loved one's estate, it is important that you know what property is exempt from the $75,000 property value limit. In Texas, the exempt property includes:
- The homestead for the use and benefit of the decedent's surviving spouse and minor children.
- Up to $100,000 (for a family, $50,000 for an individual) of qualifying property used for the benefit of the decedent's surviving spouse, minor children, unmarried adult children living and home, and adult children who are incapacitated. Examples of qualifying property include:
- Home furnishings, including family heirlooms
- Food
- Farming or ranching vehicles and equipment
- Tools, equipment, books, and vehicles used in a trade or profession
- Clothes
- Limited amounts of jewelry
- Two firearms
- Certain livestock
- Household pets
Exempt assets also include the deceased's pension benefits and IRAs as well as any insurance benefits. However, determining which property is exempt can be complicated, which is why it can be helpful to talk to an attorney if you are ever unsure whether or not a property is exempt.
Who Can File?
If you are considering filing a small estate affidavit, you first must make sure that you are qualified to do so. In order to be allowed to file a small estate affidavit, you must be the party who would inherit from the estate under state intestacy laws. This is usually a spouse or a child, or if the decedent was unmarried and had no children, then it is usually another close relative. If the only heir to the estate is a minor, their appointed guardian or next of kin can file the affidavit on their behalf. If you are unsure whether you stand to inherit from a deceased loved one's estate, do not hesitate to contact an attorney to learn more about intestacy laws in Texas.
What Is a Decedent?
When handling a loved one's estate, you may hear or see the word "decedent" used and find yourself wondering what it means. When handling estates, "decedent" is the term used to refer to the person who has died. Courts and court documents will frequently use this word in place of the deceased individual's name when referring to the person who has died.
What Is a Homestead?
When dealing with Texas intestacy laws and trying to determine if you can use a small estate affidavit, you will likely come across the word "homestead" when researching an exempt property. Yet, you may find yourself asking what a homestead is, and how you will know if a property is considered a homestead. A homestead is a place that is lived in and owned by an individual (not a company) and includes a separate (stand-alone) structure, a condominium, or a manufactured home. A homestead can be located on owned or leased land as long as the person that lives there owns the home. A homestead can also include up to 20 acres of land if the land is used for residential purposes. If property owned by the decedent is a qualifying homestead, then you may be able to use a small estate affidavit. However, small estate affidavits do not transfer real property other than a homestead, so if the decedent owned any real estate other than a qualifying homestead, a small estate affidavit cannot be used.
What Is the Process of Filing a Small Estate Affidavit?
Each county in Texas has its own specific form for filing a small estate affidavit, and they will have guidelines as to how the affidavit should be filled out. Make sure to obtain the affidavit form from the website or office of the probate court in the county in which your loved one resided. While each firm will be slightly different, they will likely all require the following information:
- The name and address of the decedent
- Their date of death
- Proof that the conditions of a small estate are met
- A list of all estate assets and debts including information identifying exempt assets
- Names and addresses of heirs who will benefit from the estate
- Relevant family history regarding heirship
- Signatures of these heirs or their representatives
Before submitting the affidavit, you will need to have it signed by two disinterested witnesses who have no legal right to inherit the property. The affidavit will need to be notarized, and a judge must approve of it before it can go into effect. Once the affidavit has been court-certified, you can use it to take possession of the estate's assets in order to pay the estate's debts and distribute the remaining assets.
Do I Need a Lawyer to Help with a Small Estate Affidavit?
Small estate affidavits are becoming a popular way to quickly and affordably settle an estate. While you can file the affidavit on your own, small estate affidavits can be complicated, and you could benefit from talking to an attorney if you are unsure what property is exempt, you need help filling out your form, or you want support preparing for a hearing or enforcing the affidavit.
Feel free to contact us to learn more about small estate affidavits as well as to find out how we can help walk you through this difficult and confusing time.
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