Small Estates and Transfer by Affidavits
Last week I met with a women who was handling the affairs of her mother who had died just over a year ago. I could tell that she dreaded the p-word, probate. The smile that enveloped her face when I told her that no probate was needed was the perfect way to end my day. Sometimes I actually get to deliver good news!
In Wisconsin, if a person dies with a probate estate of less than $50,000, probate can be avoided. Instead an obscure form known as the Transfer by Affidavit can be used. The forms tells a financial institution to close out the account and send the money to the person filing the affidavit.
The idea behind this process is that it does not make economical sense for a probate to be open when the probate assets are small. Hence, in some states it is called a Small Estate Process. The key is to know whether the probate estate is less than $50,000. To answer this you need an inventory of probate property and their value upon the date of death.
Probate property is anything that does not have a label on it stating where it should go upon the owner's death. If there is a label, then it is considered non-probate property, and avoids the probate process. In theory, person could have several hundred thousand dollars, even millions, and still file a "small estate" transfer by affidavit if the probate estate was less than $50,000 (that is the current threshold, it was increased from $20,000 several years ago).
Please keep in mind that laws regarding probate and estate planning vary from state to state, and that a blog is not legal advice. Please consult an attorney in your state about your specific situation. But, before loosing sleep over the dreaded p-word, first rule out that a small estate transfer won't work.
In Wisconsin, if a person dies with a probate estate of less than $50,000, probate can be avoided. Instead an obscure form known as the Transfer by Affidavit can be used. The forms tells a financial institution to close out the account and send the money to the person filing the affidavit.
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The idea behind this process is that it does not make economical sense for a probate to be open when the probate assets are small. Hence, in some states it is called a Small Estate Process. The key is to know whether the probate estate is less than $50,000. To answer this you need an inventory of probate property and their value upon the date of death.
Probate property is anything that does not have a label on it stating where it should go upon the owner's death. If there is a label, then it is considered non-probate property, and avoids the probate process. In theory, person could have several hundred thousand dollars, even millions, and still file a "small estate" transfer by affidavit if the probate estate was less than $50,000 (that is the current threshold, it was increased from $20,000 several years ago).
Please keep in mind that laws regarding probate and estate planning vary from state to state, and that a blog is not legal advice. Please consult an attorney in your state about your specific situation. But, before loosing sleep over the dreaded p-word, first rule out that a small estate transfer won't work.
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