The Small Estate Affidavit is an ancillary probate procedure that allows the heirs of a small estate consisting primarily of a homestead, furniture and furnishings, automobile and pension/profit sharing plan, to transfer title to same. The Small Estate Affidavit may be used in the following situations:
• No petition for the appointment of a personal representative is pending or has been granted;
• Thirty (30) days have elapsed since the death of the decedent; and,
• The value of the entire estate, not including homestead and exempt property, does not exceed $50,000.
See TEX. ESTATES CODE § 205.001.
Caution, if a homestead is the only real property in the estate, title to the homestead can often be transferred through the small estate affidavit, but generally only to a surviving spouse. Note, for a single individual the homestead ends at death.
HOW SMALL IS SMALL
A Small Estate Affidavit allows the passage of title to property to the heirs when the value of the estate is less than $50,000.00 exclusive of the value of the homestead and exempt property. See TEX. ESTATES CODE §205.001(3). Exempt personal property is provided for a family having an aggregate value of not more than $100,000.00 or $50,000.00 if owned by a single adult. See TEX. PROP. CODE § 42.001.
Exempt personal property includes:
• home furnishings, including heirlooms;
• provisions for consumption;
• farming or ranching vehicles and implements;
• tools, equipment, books, and apparatus,
• including boats and motor vehicles used in a trade or profession;
• wearing apparel;
• jewelry not to exceed 25 percent (25%) of the aggregate limitations prescribed by Section 42.001(a);
• two firearms;
• athletic and sporting equipment,
• including bicycles;
• a two wheeled, three wheeled or four wheeled motor vehicle for each member of the family or a single adult who holds a driver’s license or who does not hold a driver’s license but who relies on another person to operate the vehicle for the benefit of the nonlicensed person;
• the following animals and forage on hand for their consumption;
• two horse, mules or donkeys, and a saddle, blanket and bridle for each;
• 12 head of cattle;
• 60 head of other type of livestock;
• 120 fowl;
• household pets; and
• the present value of any life insurance policy.
Texas Property Code Section 42.0021 provides an additional exemption for a retirement plan including a person’s right to assets held in or to receive payments, whether vested or not, under any stock bonus, pension, profit sharing, or similar plan, including a retirement plan for self-employed individuals.
The “traditional” IRA remains exempt and Texas Property Code Section 42.0021(a) has been amended to include Roth IRAs as exempt property. The exemption applies to all contributions made before, on, or after the effective date of the statute.
SMALL ESTATE AFFIDAVIT
You should consult with a Texas attorney regarding the preparation of this affidavit. The applicant should file with the clerk of the Court an affidavit sworn to by two disinterested witnesses and by such distributes as have legal capacity, and if the facts warrant, by the natural guardian or next of kin of any minor or incompetent who is also a distributee. See TEX. ESTATES CODE § 205.002.
The affidavit must include all information required by Section 205.002 of the Texas Estates Code including:
• A list of the assets and liabilities of the estate;
• The names and addresses of the distributes; and
• Relevant family history facts concerning heirship that evidence their right to receive the money or property of the estate.
Note, in light of SB 699, it appears that the affidavit should also include the last 3 digits of the applicant’s social security number and driver’s license if the application will be filed in a non-statutory probate court. As of September 1, 2010, a Civil Case Information Sheet should be filed at the same time.
The Affidavit is not automatic and is subject to court approval. Affidavits are frequently rejected after court review. However, upon the court’s approval, it should be recorded as an official public record by the clerk of the county. TEX. ESTATES CODE § 205.004. This occurs automatically in some counties. In others, it is necessary to file a certified copy in the Deed Records.
WHAT DOES A SMALL ESTATE AFFIDAVIT DO?
The Small Estate Affidavit can provide a simplified procedure to clear title. It is utilized to prove the right of the heirs to estate property, and a certified copy of the affidavit can be provided by the estate distributees to persons owing money to the estate, having custody or possession of estate property, or acting as registrar, fiduciary or transfer agent of the estate of or for estate property. See TEX. ESTATES CODE § 205.007. As set forth above, the Small Estate Affidavit should be recorded in the deed records of the county where the homestead is located to effectuate title transfer. See TEX. ESTATES CODE § 205.006.
Persons making payment, delivery, transfer or issuance of title pursuant to the affidavit described in Texas Estates Code Section 205.007 are released from liability, as if made to a personal representative of the decedent, without being required to inquire into the truth of the statements contained in the affidavit. If the person to whom the affidavit is presented refuses to pay, deliver, transfer or issue the property as requested, such property may be recovered by suit by the distributees upon proof of the facts in the affidavit. Distributees receiving payment, delivery, transfer or issuance of estate assets are liable to any person having a prior right or to any personal representative thereafter appointed. Note, persons who execute the affidavit shall be liable for any damage or loss to any person which arises from any payment, delivery, transfer or issuance made in reliance on the affidavit.
The following is for informational purposes only, shall not constitute legal advice and does not constitute the establishment of an attorney-client relationship. More importantly, the following information is not a substitute for a Board Certified Texas Estate Planning & Probate Attorney. You should always consult with a qualified attorney.