Small estates affidavits and affidavits of heirship are often confused as an alternative to a costly court-ordered heirship determination which are often needed when a decedent dies without a will.
Heirship determinations require at least 2 attorneys (the applicant’s attorney and an attorney to represent the unknown heirs). In an heirship determination, all heirs must receive notice. This could include heirs who do not stand to benefit. Administration (i.e., gathering of assets, payment of bills, distribution, etc.) could require court supervision if all heirs cannot agree on independent court supervision. This process could be lengthy and costly.
As a result, many heirs prefer the quickest and most cost-efficient way to transfer assets of the deceased. Court-ordered heirship determinations are often avoided in 2 different ways: (1) affidavits of heirship and (2) small estates affidavits.
Small estates affidavits are used in Texas when the estate is less than $75,000 of assets exclusive of a homestead (if there is a surviving spouse or a minor child living in the homestead) and exempt assets. Non-probate assets (i.e., accounts with a beneficiary designation) would also not be included in the $75,000 limitation in Texas. Under Texas law, the deceased must not have had a will to receive an order approving the small estates affidavit. There is no need to go to court to receive a signed order by the judge. A small estates affidavit is a sworn statement by the devisees and 2 disinterested witnesses (knowledgeable about the family and marital history of the deceased) which lists all real and personal property and its value.
Small estates affidavits are generally used to transfer accounts (i.e., checking savings, brokerage, etc.) owned individually by the deceased. The only real estate property that can be passed by a small estate affidavit is a homestead. All assets and all debts are listed in small estates affidavits. Each heir and the anticipated share they are to receive is also listed. You need to be careful when submitting a small estates affidavit and order to the court as you must follow the letter of the law. Recently at a probate conference of local probate judges and attorneys, one judge mentioned that the court rejected 75% of the small estates applications submitted to the court.
Although some financial institutions will accept affidavits of heirship to transfer accounts, insurance policies, etc. if the value of the asset is very small, affidavits of heirship are more commonly used in connection with real estate since affidavits of heirship have no dollar limitation and since most financial institutions require a court order to transfer accounts, etc. Unlike small estates affidavits, there is no requirement that the deceased died without a will. Affidavits of heirship are often used even if there is a will. An affidavit of heirship is often used even without submission to a court. Similar to small estates affidavits, it is usually signed by an heir and 2 disinterested witnesses who generally confirm the family history, marital status, the identity of the heirs, etc. An affidavit of heirship cannot be used if there are debts owed – other than debts secured by real estate. The legal description of the property is set forth in the affidavit and the affidavit is filed in the county where the property is located. Since the affidavit of heirship requires a statement of no debts owed, many title companies have a year or two years wait to recognize and accept an affidavit of heirship before they will insure due to potential creditors. Title companies often have concern that if there are debts owed, most creditors will be known within a year or two. If there is a will and the property needs to be sold quicker, it could be quicker to probate.
An affidavit of heirship doesn’t transfer title to real estate – it is a presumption of evidence after 5 years. However, many title companies will accept an affidavit of heirship when real estate is sold (although some have a waiting period as indicated before). If an heir was omitted, probate should be considered since the affidavit of heirship is only prima facie evidence after 5 years.
There is also a motor vehicle affidavit to transfer a vehicle to heirs (which is different from an affidavit of heirship concerning real estate, etc.).
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