Estate planning expert Liza Hanks explains how property worth less than the “small estates limit” can avoid a lengthy probate court proceeding after death.
Every State Has Its Own Small Estates Limit
People often ask me if their estate is going to have to go through probate after they die. If an estate is small enough, it won’t. Each state has its own small estates limit; the amount ranges from as much as $275,000 to just $10,000, depending on the state. Estates worth less than the established amount don’t have to go through a formal probate court proceeding.
The small estates procedure is often called a “summary probate.” To qualify, it doesn’t matter whether the person made a will before they died. All that matters is the value of the assets left behind. To claim the assets, you’ll file a simple form or two and wait for a required period of time.
Claiming Property With an Affidavit After Death
Some states make it even easier to claim small amounts of property. Depending on state rules, you may be able to use a simple affidavit. (An affidavit is a statement you sign in front of a notary public, swearing that what you say in the statement is true.) All you do is wait a required period of time — usually 30 or 45 days — then sign the affidavit stating that:
- you’re the legal inheritor, and
- the property isn’t subject to a probate proceeding in your state.
Is Your Estate Under the Small Estates Limit?
If you’re trying to figure out whether an estate’s value is below your state’s small estates limit, the first thing to do is make a list of the property. On this list, include only the property that passes to heirs and beneficiaries by will. If there’s no will, you’ll have to look to your state’s laws — called intestacy laws — that describe who inherits if there is no will.
Don’t include property that passes outside of a will, such as a retirement plan, property held in joint tenancy, payable-on-death (POD) bank accounts, real estate inherited by a transfer-on-death deed, or transfer-on-death brokerage accounts. If a person had a life insurance policy with a named beneficiary, then the insurance proceeds won’t count either.
When determining what counts and what doesn’t, state rules vary slightly. For example, some states count the fair market value of an asset like a house or a car, even if there’s an outstanding loan or mortgage. Other states deduct the amount of money owed to arrive at the asset’s value.
To find your state’s small estate limit and to learn which property counts toward it, see What You Need to Know About Your State’s Small Estate Limit in Legal Consumer’s Inheritance Law learning center.