Wednesday, June 1, 2016

When An Estate Is Too Small For Probate

It was a Tuesday evening.  Talk radio voices floated through the kitchen air while I prepared dinner.

Host: Welcome Randy from New York, what's your question?

Caller:  Hey, glad I got through.  I've got a question for you.  My aunt died and I'm taking care of her affairs.  She had a retirement account, and a car with a loan on it.  How do I sell the car and pay the loan?

Host: Well, looks like you'll be doing a probate.  Not much there, one retirement account, one car, and a loan you gotta pay before you distribute anything.  Now I'm no lawyer, but seems like you'll have to open a probate.....geesh, unless there is someway around it, but how are you gonna sell the car and sign the title.  Maybe you need a lawyer....

Caller:  Thanks, I'll see what I can do.

Why I thought they'd hear me, I do not know. One, this was radio, and two, it was an archived show. But that didn't stop me: YOU NEED A SMALL ESTATE AFFIDAVIT. STATES HAVE THEM! Not only did my thoughts float into thin air, our family cat who was calming waiting for my dinner preparation to turn toward the cabinet where I keep the moist food, cocked her head in disbelief wondering what her crazy human was doing.

Here in Wisconsin the form is called a Transfer by Affidavit, and can be used when a person dies owning $50,000 or less in probate assets.  Probate assets are assets that have no label or beneficiary form on them indicating who gets them at the owner's death.  Probate assets are distributed via will, or if no will, via state statute.  All states are different, but Wisconsin is not alone in having a simple procedure to oversee the distribution of a small estate without the formality (and length and cost) of a probate proceeding.

I love my financial talk radio, especially shows focused on smart frugal living.  But wow, they get a lot of calls about how to handle wills and probates.  This was not the first, nor will it be the last time I holler into the air of my kitchen with my thoughts on the callers question.  No one really likes a lawyer, but maybe these shows should have one on to answer questions occasionally.