Probate Exemption For Small Estates < $150,000

Collection or transfer of personal property by affidavit will save Probate court delays and expense

Probate Exemption For Small Estates < $150,000

Generally, Probate court is the legal way for ownership transfer on death

Probate court is generally necessary to transfer ownership of property and accounts upon someone’s demise EXCEPT for some narrow loopholes. This loophole rises to the effect of creating a viable Probate Exemption. A major loophole is the collection or transfer of personal property by affidavit. Crockett Law Corporation can advise clients as to whether the loophole is available and assist in preparing necessary documentation.

Procedure for leveraging this Probate Exemption

The way it works is for the personal representative or heirs to prepare a sworn affidavit and present it to effect the transfer.  Typically bank accounts are transferred this way.  Some banks have their own forms and others will require you to bring them the correct form.  For transfer of vehicle titles, the DMV has its own forms to fill out found on the DMV website.

Size of estate limitation

If the entire value of the estate is $150,000 or less then the procedure can be used and probate avoided.  If there are vehicles that are part of the estate, then the value of the vehicles doesn’t count toward  the $150,000.

Won’t work for real estate

This exemption is NOT available for transfer of real property.

40 day waiting period

This procedure cannot be used until 40 days have elapsed since the death of the person whose property is involved.  However, even with the 40 day delay the transfer of personal property this way will save probate court delays and expense.

Pitfalls can exist

If there is disagreement among the heirs as to who is entitled to the property, a Probate Court procedure may be necessary to get clarity.  If there is no will and/or disagreement as to who is the personal representative then again it may be necessary to go to Probate Court.

If the deceased has a living trust, (but forgot to transfer certain accounts into the trust) this procedure may be used to transfer accounts and personal property into the living trust and avoid probate.

Suggestions for advance planning

For estates not exceeding $150,000, make sure there is a valid will in place even if there is no living trust.  A living trust may not be needed if the will covers everything.  Also, accounts can be placed into joint ownership with heirs so the heirs automatically get their share upon the account owner’s demise.  The joint account route works well if there are only one or two heirs or only a surviving spouse AND if the account signers are trustworthy.