If an estate has a relatively modest value, you may be able to avoid a formal probate procedure with the time and cost that it involves. Many states provide simplified probate for small estates, and some states allow beneficiaries to present affidavits out of court to claim assets. Even if the total value of an estate exceeds the threshold for a small estate, it may still be eligible if enough estate assets pass outside probate to lower the remaining value below the threshold. Read more here about types of assets that can pass outside probate.
The threshold may be defined as a straightforward dollar amount, or it may be determined by non-monetary criteria, such as the types of assets that the estate contains or the types of estate planning instruments involved. Different sets of criteria may apply for simplified probate and for the affidavit process. A dollar amount may be based on the market value of the property, or it may be based on the value when any amount owed on an asset is subtracted.
Also known as summary administration in some states, simplified probate is available only for estates that meet the applicable threshold in their state and have not entered formal probate. You will need to ask the probate court in writing to use the simplified procedure. Assuming that the court grants your request, you will need to meet the requirements in your state for providing notice. This may involve notifying creditors and potential beneficiaries by mail. You probably will not need to go to court at any stage in this process.
Once the required waiting period (usually one or two months) has passed, and any claims by creditors or objections by interested parties have been resolved, you can pay claims and distribute the assets. Finally, you will need to put together a closing statement for the court to state how the assets were distributed. If you did not need to notify creditors about the process in advance, you probably will need to send the closing statement to creditors as well.
Filing a Petition for Simplified Probate
You may be able to use a standard form, available from the court clerk or website. Otherwise, you can consult state law to determine what the document needs to contain and to learn about any requirements for its format and appearance. You likely will need to assert that the estate qualifies for the process under state law, list the beneficiaries who are entitled to receive the assets, state that no formal probate proceeding has started, and affirm that certain debts and taxes have been paid. Other documents that may be required include an official copy of the death certificate, any will that exists, and an inventory and appraisal of the decedent’s assets. In some states, the executor will need to get consent from the beneficiaries to use simplified probate.
The affidavit process can be even more efficient than using simplified probate. It generally can apply to any asset other than real estate if the threshold for using the process is met. A beneficiary needs to prepare a statement, sign it in the presence of a notary public, and give it to whoever is in control of the asset. (In some cases, they may need to send it to the state tax agency or other state agencies as well.) They also will need to provide an official copy of the decedent’s death certificate to that person or entity. A beneficiary also may need to submit a copy of the will, proof of the decedent’s ownership, and certain additional documents related to stocks or bonds. Sometimes only certain family members can use the affidavit process, but more often it is available to anyone. The existence of a will has no impact on whether a beneficiary can use the affidavit process.
A beneficiary cannot use the affidavit process if the executor already has started a formal probate proceeding. Thus, they usually cannot start submitting affidavits until a certain waiting period has passed, such as a month. A beneficiary likely can use a standard form, or they can look into state law to make sure that their affidavit meets the requirements. In general, it will need to assert that the estate qualifies as a small estate, any waiting period requirement has been met, no probate proceeding has started, and the beneficiary is entitled to the asset for certain reasons. An affidavit can cover multiple beneficiaries and multiple assets.
Since an affidavit is signed in the presence of a notary public or under penalty of perjury, the holder of the asset does not need to verify the statements in the affidavit before turning over the asset to the beneficiary.
Claiming Stocks or Bonds Through Affidavits
You may need to submit specific forms if you are using an affidavit to claim stocks or bonds. If you are claiming stocks or bonds in a brokerage account, the company holding the account probably will provide forms and instructions on its website. In addition to the standard documents associated with an affidavit, you will need to provide your Social Security number and a guaranteed signature on the transfer document. This means having a bank employee or broker sign the transfer document as an assurance that your signature is genuine.
In the unlikely event that an estate contains actual stock certificates or bonds, you will need to provide the transfer agent of the relevant corporation with the original stock certificates or bonds. You also will need to send the death certificate, the affidavit, and a few distinctive documents. One of these is the stock power, which provides authorization to transfer shares. Another is the affidavit of residence, which states where you live. It must be signed in the presence of a notary public. Finally, you will need a cover letter that asks the company to reregister the stocks or bonds in your name.