Skipping Probate Court Through Use of Small Estate Affidavits
When a person dies without a will, the law refers to them having died intestate. And as any experienced probate attorney will attest, dying intestate invites chaos. No matter how much or little the deceased left behind, stories abound of family members fighting tooth and nail over the estate. Still, despite the numerous advantages of having a will, every year the majority of people pass away intestate leaving their loved ones to navigate the chaos. That said, there is still hope for avoiding a lengthy stay in probate purgatory. In Texas, that hope comes in the form of a small estate affidavit.
Ordinarily, probating an estate is a long and formal process, requiring the appointment of an estate administrator to oversee the property. The duties of an administrator can be unusual and complex, so a good probate attorney is often necessary to guide the administrator through the process. Ultimately, that process, known as administration, can take between one and two years to complete.
The advantage of a small estate affidavit is that it allows qualifying estates to be probated in a matter of months without the need for full administration. In fact, many probate courts will not even require a hearing if the small estate affidavit is drafted and filed correctly. Once the probate court accepts the small estate affidavit (along with accompanying documents, such as the death certificate, inventory, and affidavit of heirship), then the deceased’s property can be distributed without further involvement from the court. Overall, it is a far simpler process when compared with the normal probate process.
There are several requirements for using small estate affidavits. First, the deceased must not have had a will. To support this, an affidavit needs to be filed with the probate court swearing to this. Second, there must be no pending or granted applications to appoint anyone as an administrator of the estate. If that has already happened, then formal administration has begun and needs to be finished that way. Third, the estate must be valued at no more than $75,000, excluding homestead property. Property counting towards that limit includes certain bank accounts, retirement benefits, and vehicles. Fourth, the only land that the deceased can have owned must be their homestead. Furthermore, the aforementioned affidavit needs to indicate that the only one receiving that homestead will be either the deceased’s spouse or minor child. Fifth, the assets of the estate must be greater than its debts. This is because, in Texas, debts must be paid before assets can be distributed. Failing to notify creditors is a common mistake, but it can lead the probate court to not accepting the small estate affidavit or even invalidating it after acceptance. Lastly, all heirs must agree with and sign the small estate affidavit. They must also provide their contact information to the court. If all six of these requirements are met, then a full formal probate process is unnecessary in Texas.
Often, the specifics of the $75,000 limit are the hardest to deal with. If the estate is at or above the $75,000 limit, there are ways of getting the value of the estate down. Chapter 201 of the Texas Estates Code provides a deeper breakdown of what property can be excluded from the value of the estate if using a small estate affidavit, but here are a few commonly used exceptions: First, if certain personal property, such as a car, will be used for the benefit of a surviving spouse or a minor child, it can be excluded from the value of the estate. Also, if it is unknown how much money the deceased had in their bank account, the Texas probate courts can order banking institutions to disclose that information for the limited purpose of probating the estate. Most importantly, land is not counted towards the limit if it is the deceased’s homestead. Laws on homesteads can differ greatly from State to State, but in Texas, the property must be designated a homestead through a filing with the local appraisal district. The area covered by homestead designation is either 10 acres if urban or up to 200 acres if rural. Also worth noting, property designated as a homestead also receives tax benefits and protection from creditors. A full breakdown of the rules regarding Texas homesteads can be found in Section 41 of the Texas Property Code.
While there are significant benefits to using a small estate affidavit, it is important to remember that there is no one-size-fits-all tool for dealing with an estate. An attorney experienced in estate planning can help clarify whether a small estate affidavit is the best fit for your situation or if a different method of administration is necessary. Dealing with the loss of a loved one is never easy, but proper use of the right experts with the right tools does make the process significantly less painful.
This article is intended to provide general legal knowledge, but it is no substitute for speaking with an actual lawyer. To speak with an attorney in the Fort Bliss Legal Assistance Office on this or any other topic, please schedule an appointment by emailing usarmy.bliss.hqda-otjag.mesg.bliss-legal-assistance-office@army.mil at any time or by calling (915) 568-7141 during business hours.
Capt. David Mathew, Fort Bliss Legal Assistance Office