Claiming Inherited Property With a "Small Estate" Affidavit

In many states, if the total value of property left by a deceased person is under a certain amount, the people who inherit that property can claim it directly without going through a probate court proceeding. All they need to do is prepare a simple affidavit (s sworn statement) and present it to the institution, such as a bank, that has the asset. This "small estate" affidavit procedure often can't be used for real estate (it depends on your state), but works very well for assets such as bank accounts.

Why Use a Small Estate Affidavit?

Compared to probate, small estate affidavits are easier, quicker, and less expensive for the inheritors. If you're the executor of an estate (tasked with wrapping up someone's estate) and the estate qualifies as a "small estate" in your state, you'll want to encourage inheritors to use a small estate affidavit. They'll get access to their inheritance faster, and more of their inheritance will remain intact, since they'll pay fewer or no probate fees and attorney fees.

Which States Offer Small Estate Affidavits?

These states allow inheritors to claim assets with an affidavit rather than probate court procedures, so long as the estate is small enough and meets the state's specific requirements.

Who Can Use an Affidavit for a Small Estate?

An inheritor who wants to use an affidavit to claim inherited property must state, on the affidavit, that the estate qualifies as a "small estate" under the state's laws. Each state defines "small" estates differently, so you'll need to look up the exact small estate affidavit requirements in your state. The requirements can vary widely from state to state.

As one example, in Illinois, a small estate is one that has a total value of $100,000 or less. To determine the value of the estate, Illinois law states that you must add up the value of the deceased person's property that passes under a will or by state law. This means that when tallying up the property, you won't be counting property that passes outside of probate (known as "nonprobate property" or "nonprobate assets"), such as:

• retirement accounts with named beneficiaries
• payable-on-death bank accounts
• property held in a living trust, and
• life insurance policies with named beneficiaries

For more on which assets go through probate and which do not, see What Assets Must Go Through Probate?

You might be surprised to discover that even relatively large estates can qualify as "small" ones for the purposes of the small estate affidavit, so long as the majority of the assets are non-probate assets.

In Illinois, to qualify for the small estate affidavit, the estate also can't include real estate, unless the real estate passes outside of probate. Real estate that passes outside of probate includes property:

• owned jointly as joint tenants (with right of survivorship) and passed directly to the surviving owner, or
• transferred using a transfer-on-death deed.

But every state has its own rules. You might encounter restrictions such as:

• not allowing real estate
• making the procedure available only to certain surviving relatives
• severely limiting the kinds of property that can be claimed (only allowing small estate affidavits for bank accounts or vehicles, for example), or
• not allowing the procedure if the deceased person left a will.

How Does the Small Estate Affidavit Process Work?

Generally, if the estate qualifies for the affidavit procedure, all an inheritor needs to do is:

• prepare an affidavit that meets state law requirements and explains why the inheritor is entitled to the property
• sign the affidavit in front of a notary public, and
• present the affidavit and a certified copy of the death certificate to whomever is in possession of the asset.

Most states impose a waiting period of a month or two (after the death) before an inheritor can claim assets with a small estate affidavit—but this wait time is usually much shorter than waiting for the probate process to finish, which can take six months to over a year. Banks and other institutions are familiar with small estate affidavits and should cooperate without a fuss.

How to Get a Small Estate Affidavit Form

Many state court systems (Utah, for example) and counties (Sacramento and others in California, for example) make fill-in-the-blank affidavit forms available online. Some institutions, such as banks and government pension agencies or motor vehicle departments, might also provide their own forms for inheritors to use. In these cases, you can create an affidavit just by filling out the template.