Estate Administration 101: Small Estate Affidavits
Minnesota law provides that if the value of the entire probate estate, determined as of the date of death, wherever located, including any contents of a safe deposit box, less liens and encumbrances, is less than $75,000, then interested persons (as defined by statute) can use a document called an Affidavit for Collection of Personal Property, sometimes also called a Small Estate Affidavit, to collect the personal property of a decedent. Property can be collected as soon as 30 days after the date of death. Remember that the "probate" estate includes any property, real or personal, that does not have a joint owner, beneficiary designation, pay-on-death designation, or transfer-on-death designation listed on the asset or account at the time of death.
There is, however, an important caveat to this rule: Affidavits for Collection of Personal Property does not apply to real estate, only personal property. In other words, these affidavits cannot be used when real estate is involved or where the total assets of an estate exceed the $75,000 threshold. In the event the decedent owned real estate and there is no joint owner of record, then the estate must be probated in order to property transfer the title to the real estate.
Below are a few examples of when a small estate affidavit is or isn't appropriate.
Example #1: Jane’s Estate
Jane died owning the following assets:
Life insurance policy (two beneficiaries listed on the policy) – $150,000.00
Bank account, $23,000.00
Personal property, $7,500.00
Jane’s son wants to know if he can use a small estate affidavit to collect Jane’s assets.
Can an Affidavit for Collection of Personal Property be used in Jane’s estate? YES. Because Jane’s life insurance policy had beneficiary designations listed on the policy as of the time of her death, the life insurance policy is excluded under her probate estate. The only probate assets are the bank account, vehicle, and personal property, which total $40,500.00 (less than the $75,000.00 threshold). Jane’s son can use the affidavit to collect Jane’s assets.
Example #2: John’s Estate
John died owning the following assets:
Home (owned solely by John) – $275,000.00
IRA (beneficiary designations listed on the account) – $75,000.00
Bank account – $5,000.00
Personal Property – $10,000.00
John’s granddaughter wants to know if she can use a small estate affidavit to collect John’s assets.
Can an Affidavit for Collection of Personal Property be used in Jane’s estate? NO. John’s IRA is excluded under the probate estate because it lists beneficiaries on the account, but his home, bank account, and personal property are all part of his probate estate. Not only does John’s estate exceed the $75,000.00 threshold, he also owns property solely in his name. Remember that a small estate affidavit cannot be used to distribute real estate.
Example #3: Fred’s Estate
Fred died owning the following assets:
Home (owned jointly with Fred’s wife) – $160,000.00
Bank account (owned jointly with Fred’s wife) – $13,000.00
Vehicle – $6,000.00
Personal Property, $2,000.00
Fred’s wife wants to know if she can use a small estate affidavit to collect Fred’s assets.
Can an Affidavit for Collection of Personal Property be used in Jane’s estate? YES. Because the home and bank account are owned jointly with Fred’s wife, these assets are excluded under Fred’s probate estate; the home and bank account pass directly to Fred’s wife as a result of their joint ownership. Fred’s vehicle and personal property total $8,000.00, which could be collected using the small estate affidavit.
Example #4: Norma’s Estate
Norma died owning the following assets:
Bank account – $62,000.00
CDs – $11,000.00
Vehicle – $8,200.00
Stamp collection – $5,000.00
Norma’s brother wants to know if he can use a small estate affidavit to collect Norma’s assets.
Can an Affidavit for Collection of Personal Property be used in Jane’s estate? NO. Even though Norma did not own real estate at the time of her death, her total probate estate exceeds the $75,000.00 threshold.
Determining whether a probate is necessary can be a complicated question that requires the advice of an attorney experienced with Minnesota estate administration. Contact our office today or make an appointment online to speak with an attorney about your estate administration questions.