A small estate affidavit is a legal document used for an alternative means of passing on an estate, as opposed to a regular probate process. Experts describe the small estate process as requiring all “assets, liens and encumbrances” of an estate to be under a specific net worth as defined by the home state of the estate holder. The maximum net worth for a small estate administration process ranges from $1000 to $100,000 depending on the resident state’s estate laws.
Many of the advantages of using a small estate affidavit to establish a small estate administration have to do with the complexities of the probate process. In a probate administration, the property of an estate may take a lot of formalities to be properly distributed. Claims may be made, and red tape may prevent heirs from a quick accounting and process. A small estate administration bypasses some legal fees and other costs, and so it is desirable for many families.
Individuals anticipating the administration of their estate can use various strategies to make their estate fit into the definition of a small estate. One such strategy involves placing all assets above the maximum net worth into a trust, so that the remaining estate is under the maximum net worth. The trust can be administered separately. The estate holder then obtains a small estate affidavit, which can be used to proceed with small estate administration.
One major issue with small estate administration is the extreme difficulty in figuring out whether an estate has a net positive or negative value. It’s a frequent situation for those who inherit a disordered estate. Heirs must try to get as accurate a picture as possible, in order to decide whether to proceed with a state administration process that will notify creditors. Legal professionals understand that inheritors of an estate can be responsible for paying creditors out of the assets of that estate, or even when assets are not available.
The kinds of legal professionals who help families with small estate administration can explain why legal representation is often necessary for both the small estate affidavit processes as well as for probate procedures for larger estates. It may be difficult for a family to know which if any creditors will have an interest in making claims on an estate based on the value of that state. It is helpful for families to utilize legal counsel in order to avoid more unexpected claim situations later.