Texas allows the heir of a person who has died without a will to avoid probate by using a summary administration process with a small estate affidavit. A small estate affidavit can allow an heir to claim bank accounts and other estate assets much faster and at far less cost than through a probate. In Texas, this process can only be used if the estate is worth less than $75,000, not counting the deceased person’s primary residence, and it can’t be used to transfer ownership of real estate except for a primary residence. Talk to a financial advisor to help you plan your estate.
A small estate affidavit is a sworn legal document a person can use to assert a claim to assets from the estate of someone who has died. If the affidavit is properly completed and the estate is eligible, a bank or another holder of an asset belonging to the estate must turn over the asset when presented with the affidavit.
One limitation in Texas is that real estate, with the exception of the deceased person’s primary residence or homestead, can’t be transferred with a small estate affidavit. The principal residence is the only real estate from the estate that can be transferred using the small estate affidavit. Also, if any real estate other than the homestead is included in the estate, the small estate affidavit can’t be used to transfer other assets as well.
Using this summary administration process avoids formal probate, which can take months or years and require paying fees that significantly reduce the value of the estate. However, only some Texan estates can go this route. Here are the state’s criteria for using the small estate affidavit:
When valuing the estate, the total does not include the deceased’s homestead or any exempt property. Exempt property includes certain types of property like vehicles, furnishings, clothing and jewelry, that is for the use of the surviving spouse and minor children and other dependents. Pension and IRA benefits are also exempt property and not included in the estate’s value.
In Texas, the small estate affidavit must be filed with the court and the court must approve the affidavit. After the court has approved the affidavit, it can be presented to a bank, organization or person, which then has to release the assets to the person with the affidavit.
Texas lays out the requirements of a small estate affidavit on its legislative website. A ready-made template for a Texas small estate affidavit can be downloaded here. Most people can draft and complete the affidavit without help from an attorney. The signatures on the form do have to be notarized so the services of a notary are necessary.
Texas law says a small estate affidavit has to:
Affidavits for collection of personal property offer notable benefits, including:
A small estate affidavit can be used when a person dies without a will.
Some limits and drawbacks include:
In Texas, a small estate affidavit can save time and money when transferring assets from the estate of someone who died. The affidavits can only be used when the estate is valued at less than $75,000. Heirs can gain control of assets such as bank accounts and stocks by presenting a properly completed small estate affidavit to a financial institution or other asset holder. Most people can complete one of these affidavits without an attorney and get rapid access to assets in a small estate.
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Mark HenricksMark Henricks has reported on personal finance, investing, retirement, entrepreneurship and other topics for more than 30 years. His freelance byline has appeared on CNBC.com and in The Wall Street Journal, The New York Times, The Washington Post, Kiplinger’s Personal Finance and other leading publications. Mark has written books including, “Not Just A Living: The Complete Guide to Creating a Business That Gives You A Life.” His favorite reporting is the kind that helps ordinary people increase their personal wealth and life satisfaction. A graduate of the University of Texas journalism program, he lives in Austin, Texas. In his spare time he enjoys reading, volunteering, performing in an acoustic music duo, whitewater kayaking, wilderness backpacking and competing in triathlons.
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