Not everyone dies with a large estate requiring a complicated administration. Because a small estate generally has fewer complexities, Texas has created a Small Estate Affidavit, also known as a SEA. Those small estates that qualify are able to settle without the normal probate process. Despite its goal to simplify the transfer of assets, the SEA requires detailed documentation and enough limitations that it is not as helpful as it may initially seem to be.
Criteria for a SEA
According to Texas Estates Code Chapter 205, the following conditions must be in place for probate by Small Estate Affidavit:
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- The decedent died intestate, without a will.
- The decedent has been dead at least thirty days.
- The value of the estate is $75,000 or less, excluding homestead property and other exempt property, such as cars and furniture.
- The debts of the estate are less than the assets of the estate, excluding mortgages or debts secured by exempted property.
- All heirs have been identified, and each is willing to sign the SEA. Legal guardians may sign for minors who are heirs.
The court has the right to approve the Small Estate Affidavit once all documentation is accurately completed and submitted.
Documentation for Affidavit
As outlined below in Section 205.022, the required information for the affidavit itself is extensive. An affidavit filed under Section 205.001 must
(1) be sworn to by:
(A) two disinterested witnesses;
(B) each distributee of the estate who has legal capacity; and
(C) if warranted by the facts, the natural guardian or next of kin of any minor distributee or the guardian of any other incapacitated distributee;
(2) show the existence of the conditions prescribed by Sections 205.001(1), (2), and (3); and
(3) include:
(A) a list of all known estate assets and liabilities;
(B) the name and address of each distributee; and
(C) the relevant family history facts concerning heirship that show each distributee's right to receive estate money or other property or to have any evidence of money, property, or other right of the estate as is determined to exist transferred to the distributee as an heir or assignee.
(b) A list of all known estate assets under Subsection (a)(3)(A) must indicate which assets the applicant claims are exempt.
Once all documentation is submitted, the judge approves the affidavit.
Complicating Factors
Designed to be more time efficient and less costly than traditional probate, the Small Estate Affidavit is nonetheless quite complicated. If for example the decedent meets all the criteria of the SEA but has left a will, then a Small Estate Affidavit is not an option. Another complication is that the SEA does not transfer title unless the property is homestead property. As a result, if the decedent owned property in addition to the homestead property, the SEA is not appropriate.
Another major issue is accurately determining which assets are exempt, items such as a car, furniture, tools, and livestock, and which are non-exempt, such as banks accounts. The ability to correctly value those assets may also be difficult, and simply writing “value unknown” on the form is not a legal option. Acts 2015, 84th Leg., ch. 1106, § 1, eff. Sept. 1, 2015 (adding § 205.002(b)).
Affidavits have other limitations as well, especially with financial assets such as bank accounts. Although banks sometimes claim that they will accept a small estate affidavit, they have been reluctant to release funds, instead requiring a full probate with letters testamentary issued if there is a will, or letters of administration when there is no will.
In its instructions regarding the SEA, the Williamson County Clerk warns, “The complexity of the Code poses many pitfalls for non-lawyers attempting to comply with the requirements. An attorney’s assistance in drafting an SEA may prevent the denial of an Affidavit that might have been approved if the Affidavit had been prepared correctly.”
Our firm has rarely found the small estate affidavit to be useful. When there is only real estate to deal with as part of the decedent’s estate, an affidavit of heirship is usually appropriate and more cost effective.
Working with a probate attorney to create a will is the best option. A probate attorney is also helpful when someone dies intestate. The probate attorney will then help a family navigate the complex and challenging process of settling an estate without a will.
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