When we die, everything we leave behind must be transferred and distributed among the living. Yet we do not all distribute our financial and material legacy equally.
Some people utilize estate plans to determine distribution, drafting different documents to establish a succession order among heirs and beneficiaries, designate beneficiaries for specific assets, hold certain assets in trust to be outside of the probate process, and arrange for the smooth probate of assets beyond state lines. Other people, however, have neither an estate plan nor a will, and let the state decide who gets what.
In these latter cases, the beneficiaries of an estate still have the chance to salvage things and turn an otherwise complicated ordeal into a relatively simple and streamlined process. In some states, like Texas, this is called an affidavit of heirship. In many other states, including California, this is split into the affidavit of heirship and the affidavit of small estates.
What is an Affidavit of Heirship?
An affidavit of heirship is exactly what it sounds like – a document meant to prove your relationship with the decedent and determine the right to inherit.
The point of an affidavit of heirship, however, is to aid in skipping the probate process. Briefly said, the probate process is the legal process by which the state supervises the distribution of an estate, usually through a chosen executor, and through the instructions of a last will and testament.
In the absence of a will, the chosen executor must distribute the estate as per the state’s intestate succession.
Alternatively, if the estate is eligible, it may be distributed and dissolved through an expedited process as part of an affidavit of small estate. The limits differ from estate to estate, as does some of the surrounding terminology.
Why bother skipping probate to begin with? For two major reasons: time and money.
Understanding the Probate Process
The probate process begins with a formal petition of probate to the courts of the decedent’s county of residence. Once a court date is set for the probate process to begin, the first order of business usually involves naming a living executor to take care of the administrative and logistic work behind executing the will of the decedent, or the will of the estate.
To that end, they must inform all of the potential beneficiaries of the estate, notify potential creditors, and send out a public statement that the probate process has begun (usually through the local papers). This public statement is for the benefit of other creditors who may have a claim for the estate.
At this point, the clock is ticking. The creditors have a state-determined time limit before their claim is invalid – until then, the executor must manage the estate’s inventory, round up and manage any assets, arrange for the cleaning and upkeep of real estate and other property, and manage the financial household of the estate – which means utilizing the estate’s funds to manage the cost of upkeep.
Then, there are financial responsibilities left to attend to, from the final set of bills to the last tax return (if the decedent was single, or a widow/er – otherwise, the surviving spouse takes care of the final tax return, provided they were filing joint returns).
Once an estate’s obligations are fulfilled and any valid creditors have been made whole, it can finally be distributed. At this point, most estates undergoing probate will require the expertise and guidance of a probate lawyer, who adds onto the costs of managing the estate’s logistics. Finally, the average estate probate process can last over a year.
Probate can be very useful. It provides a legal and official environment to contest the will, for example. But it can be a lengthy and expensive process. A small estate affidavit, alongside an affidavit of heirship, fixes that.
What is Intestacy?
Dying intestate means dying without a will, or more specifically, dying without testament. The idea of dying intestate is that if you leave no valid instructions behind, your relatives may have no choice, but you distribute your estate as per state rules.
Intestate succession differs a little bit from state to state. However, outside of the specifics, the gist remains the same: your children and spouse inherit first, and then your parents, siblings, grandparents, then your aunts/uncles.
The government no long sends money to relatives outside of your next of kin, cutting it off after your aunt or uncle, usually. In some cases, your estate may be transferred to the relatives of your spouse, if no other available next of kin exist. And depending on the state and your number of surviving children, your surviving spouse may inherit more or less of your belongings.
Some things are exempt from intestacy, namely assets that have already been transferred through a beneficiary designation of some kind. This includes any assets included in a trust, the remainder of your retirement accounts, bank accounts with beneficiary designations added, life insurance payouts, and so on.
However, even if you utilize as many beneficiary designations as possible, it usually isn’t feasible to try and completely distribute your probatable estate that way. You will likely leave behind some kind of an estate and may require a probate process without a trust or will. That is where an affidavit of heirship and a small estate affidavit come into play.
When Is an Affidavit of Heirship Necessary?
Generally speaking, an affidavit of heirship and small estate is a valid option if the total value of your decedent’s estate is $184,500 or less. This total excludes certain elements of an estate, meaning an estate can be worth more, and still qualify for an affidavit of heirship. It does not calculate:
- Property held in a trust
- Cars, boats, RVs
- Property outside of the state (California, in this case)
- Property that passed directly to a co-owner
- Unpaid salaries up to a certain amount
- Life insurance payouts and similar benefits
If your estate’s value is low enough, you can file for an affidavit of heirship and an affidavit of small estate to bypass the headache of a probate process. Naturally, you must do these things before you or someone else petitions to begin the probate process.
Affidavit of Heirship vs. a Will or Trust
A small estate affidavit can help you significantly expedite the probate process and simplify the distribution of your loved one’s estate, even after death. But it is no replacement for a good estate plan written in life.
If you want to make things easiest for your loved ones, while minimizing costs and making the most of your estate, it is in your best interest to speak to a legal professional about estate planning.