Small Estate Administration
In most states, when a person dies leaving assets that do not have beneficiary or payable on death designations, those assets must be handled through the process of probate administration. The probate process is a court proceeding overseen by a judge and requires an attorney. As a result, there are costs associated with the probate process, which can be a burden on a modest estate with few assets.
Being sensitive to the cost factor for modest estates, the Illinois Legislature has established a threshold, the “small estate” threshold, that is $100,000 in personal property assets (in 2015). When personal property assets that are subject to probate are less than $100,000 in the aggregate, the estate is identified as a small estate.
The Basics Of A Small Estate Affidavit
If an estate qualifies as a small estate, and there are no contentious claims or disputes involving the assets of the estate, a probate proceeding is not required. Instead, a device called a Small Estate Affidavit can be used to authorize the administration of that estate. A Small Estate Affidavit is sworn statement that the facts provided in the Affidavit are true and correct and consists of a personal undertaking to handle the administration of the estate pursuant to the law by the person signing the Affidavit.
Small estate administration is subject to the same rules that govern a probate estate without the oversight of the court or the court process. If the deceased person left a will, the will determines who gets the estate assets after bills, taxes and costs are paid. If there is no will, the heirs are the rightful recipients of the assets. The person signing the Small Estate Affidavit acts like an executor of a probate estate and has the responsibility to pay creditors, taxes, fees and costs and to direct the assets where they should go by law.
The statute that establishes the principal of a small estate and authorizes the use of a Small Estate Affidavit also authorizes banks and other institutions to recognize the Small Estate Affidavit and honor it. If any issues or disputes arise, the affiant (the person signing the Affidavit) must resolve them. The affiant can be held liable for failures to follow the requirements of the law, failures to pay creditors with estate funds and failure to pay out the estate assets to the lawful recipients, among other things.
Small Estates That Include Real Property
Sometimes estates consist of less than $100,000 in personal property, but there is also a residence (real property) in the estate. Under certain circumstances, the residence can be handled with the provision of title insurance and a bond in lieu of probate, and the personal property can be handled with a Small Estate Affidavit to avoid the expense and delay of a probate proceeding. Great care must be exercised in using this method, however, to avoid liabilities for the affiant and the estate.
Contact Drendel & Jansons Law Group
If a loved one has passed leaving personal property assets that are less than $100,000 in the aggregate, and you need help in determining whether you can use a Small Estate Affidavit and guidance in using one to handle the administration of a small estate, please contact us by calling 630-523-0543 or filling out our online contact form.