Navigating the probate process can feel overwhelming, so what if there was a way to avoid it entirely? In this episode of Absolute Trust Talk, associate attorney Jessica Colbert and managing attorney Kirsten Howe introduce the small estate affidavit—an often overlooked yet highly effective tool for bypassing probate when certain conditions are met. Together, they break down what it takes to qualify for this process, explain how it works to transfer personal property without court involvement and point out some important details and potential challenges. Don’t miss this insightful conversation that can make estate planning more manageable, quicker, and less stressful. Listen now!
Time-stamped Show Notes:
0:00 Introduction
0:45 Understanding the Small Estate Affidavit: What it is, how it works, and how it helps avoid probate.
2:20 Did you know? The total value of assets must be less than $184,500 to use a small estate affidavit.
3:12 Next, we’re discussing the eligible signers responsible for signing the small estate affidavit and ensuring compliance.
5:47 Don’t forget this important document: A certified copy of the death certificate is essential to the process.
6:30 Can a bank refuse to honor a small estate affidavit? Discover what happens when an institution refuses and how to address it.
8:24 Thanks for tuning in! Next time, we’ll dive into another probate alternative, available only to surviving spouses.
Transcript:
Hello, and welcome back to Absolute Trust Talk. I’m Jessica Colbert, an associate attorney here at Absolute Trust Counsel. I am joined by Kirsten Howe, our managing attorney. Today, we are going to talk about some procedures that can be used instead of the long, lengthy probate process we’re trying to avoid in a situation where a decedent has assets that are titled in their name alone and don’t have beneficiary designations on them.
Typically, this may trigger a probate. But in certain circumstances, there are some things that we can do to avoid that. The first one we will talk about is called a small estate affidavit, which doesn’t include the court at all, and that is what we want.
So, Kirsten, how about you tell us a little about what a small estate affidavit is?
Sure. I always say when I’m trying to describe this kind of thing to people that when there is property titled in the name of a dead person, that’s a problem, and we can solve it in a variety of ways. As you just mentioned, probate is one. It’s the least desirable of those ways. Sometimes, there’s a workaround, and it is typically because the amount in question is very small, so maybe the court doesn’t need to get involved. That’s why we colloquially call this particular thing a small estate affidavit.
It is only for personal property, and when I say personal property, I’m speaking as a lawyer, which I, in fact, am. Meaning, not real estate. Anything else, such as a small affidavit, could be used. This does not include real estate, which is what we’re talking about right now.
So, it is a document that the person who is entitled to this asset that’s currently titled in the name of a dead person, the person who now is entitled to own it, signs, basically saying, “I’m entitled to own this property. Give it to me. ” That’s the affidavit.
Yes, and it sounds like a much simpler, quicker, cheaper process than probate.
What scenario can this be used in?
We have to either not have a probate happening—we have to be able to say there is no probate and there’s no need for a probate—because the total of the assets owned by this dead person is less than the probate threshold. And those of you who listen all the time, you know what that number is. You could probably shout it out: $184,500. The total of all the assets owned by this dead person has to be less than that number. That’s not on a per-asset basis.
We also have to wait 40 days from the date of death. We can’t just run in the next day and go forward and get those accounts. The affidavit actually says it’s been more than 40 days, and the person who’s signing it is the person entitled to have that asset.
I think, Jessica, you’re going to talk a little about who that could even look like—who might that person be—or persons?
The person signing this document is the successor of the dead person. What that means is it is the person who, either by that person’s will or through the laws of intestacy, is entitled to receive that property.
If the decedent had a will, it might name a person or many persons who will receive that property. If it’s a pour-over will—which is a will that says everything is pouring over to my revocable living trust—then the trustee of that trust would then be the successor and be the person who is signing this document. If the decedent didn’t have a will at all, then California has laws laid out that say who would be the person or multiple people receiving the property. If it’s more than one, all of them have to sign.
The will could say, “I leave everything I own equally to my three children.” This particular asset that we’re trying to get through the process—maybe it’s a bank account. Nowhere in the will did it say, “I leave my bank account to my daughter Jessica;” it just says, “I leave everything to my three children.” So, that means all three children have to come and sign the affidavit, and then they’re going to get a check from the bank account somehow, and they’ve got to figure out how to split that money. They’ve got to sort that out.
It’s important to remember that the person entitled to the assets could be the trustee of the trust. It’s not necessarily going to be the children or the surviving spouse or whatever.
It’s also important to remember that this affidavit is signed under penalty of perjury, so you don’t want to use it when it doesn’t really apply. Sometimes, we get that question: “How will they know? Why can’t I use it?” Well, because lying under penalty of perjury is a crime, we don’t ever want our clients to do that.
What else do we need to do to use this affidavit process?
The person or people signing it will also need to attach a certified copy of the death certificate to it, and the best practice is to have it notarized. Have every single signature notarized. Then the people or person will present it to the asset holder. It could be a bank. If it’s an account, and at that point, the holder should distribute it to those people.
That usually goes the way we want it to go. We often use this procedure, and our clients rarely report any trouble. But occasionally, you know, there’s trouble. What happens if the bank, let’s say the bank refuses to honor the affidavit?
Under the probate code, they are required to, and sometimes just informing the asset holder, the bank, of these requirements helps. We can point out where the probate code says that. We’ve had success writing letters that lay out, “Hey, you have to do this. The probate code says you have to do this,” and we’ve succeeded with that. If that still didn’t work, the code does offer a remedy. The person who signed the document, entitled to the property, can file a petition with the court asking the court to tell the bank that they have to distribute it. But we haven’t ever had to do that. We’ve never had to go that far.
The point is that if you comply with the probate code, fill out this affidavit, and have all the necessary components—and you’re saying under penalty of perjury that everything here is true—that’s all the bank needs. That gets them off the hook. That’s all they need to work with. That’s all they need to worry about. As long as it’s a valid, complete affidavit, there’s nothing to be gained by resisting because now they have no liability. They are entitled and required to release that property. But we know sometimes banks are a little funny about turning over money.
Sometimes, they have their own rules, even though the law says what the rules are.
Yeah, and those rules may vary from branch to branch, bank to bank, and employee to employee—not meaning to malign banks in particular. I’m just saying, you know, we are all humans, and we do things that don’t always make sense.
This is a great procedure when it’s available. Again, it’s called a small estate affidavit for a reason. We can’t get, you know, $2 million transferred this way, but in some cases, it’s appropriate.
Next time, we’ll discuss another non-probate or probate alternative procedure. This one is available only to surviving spouses, so check it out. We look forward to connecting with you next time.
Resources Related to This Episode:
- Blog: Using Small Estate Affidavits to Transfer Assets: https://absolutetrustcounsel.com/using-small-estate-affidavits-to-transfer-assets/
- Absolute Trust Talk Episode 143: Can You Avoid Probate without a Trust?: https://absolutetrustcounsel.com/143-can-you-avoid-probate-without-a-trust/
- A Will is Not Enough – Securing Your Legacy with Estate Planning Life can change in an instant. A will is not enough to be prepared. Get free access to our actionable E-book Guidebook #1 and start protecting your legacy today. https://absolutetrustcounsel.com/guidebooks/
- Learn how to comfortably define gray areas and assess your own unique needs to effortlessly build a secure future now. Check out Guidebook #2, Estate Planning Beyond the Basics, here > https://absolutetrustcounsel.com/guidebooks/
- Get our free introductory guide to the most used estate planning tool, family trusts, and understand how we plan to help protect your family. Guidebook #3: https://absolutetrustcounsel.com/guidebooks/
- Absolute Trust Counsel would love to offer access to our Incapacity Planning resource page: https://AbsoluteTrustCounsel.com/Incapacity-Planning/. We’ve collected our top planning information all in one place so listeners can find videos, guidebooks, blog posts, and a host of information with tips and strategies on implementing, planning, and protecting themselves and their loved ones.
- We’re pleased to provide a library of e-books to address common estate planning questions and concerns in practical, easy-to-understand language. https://AbsoluteTrustCounsel.com/Resources/.
- ASK KIRSTEN: If you’d like Kirsten to answer your question on the air, please email her at Info@AbsoluteTrustCounsel.com.
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