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BY CHRISTOPHER YUGO | Monday, November 10, 2008 | (No comments posted.)
Q: I know that you can transfer estates under a certain amount without probate. What is the amount that you can transfer without probate and does that amount include jointly owned bank accounts?
A: I think you are referring to an affidavit for transfer of personal property or, in the event the asset is real estate, an affidavit for transfer of real property. Both affidavits are affectionately known as a small estate affidavit.
Small estate affidavits can be used in Indiana to transfer property of a decedent without the necessity of formal probate and the appointment of a personal representative. A small estate affidavit can be used in both testate situations (where there is a will) and intestate situations (where there is a not a will).
In order to use a small estate affidavit, the gross value of the probate estate, less liens and encumbrances, can not exceed $50,000.
Also, you must wait at least 45 days from the date of death before you can utilize a small estate affidavit. However, there is an exception to the 45 day waiting period when transferring title to motor vehicles and watercraft, which only requires a five-day waiting period.
Small estate affidavits have many other requirements and affirmations as well as strict notification requirements to interested parties. Although most small estate affidavits contain boilerplate language, they aren't do it yourself documents. You really should seek the advice of an attorney before trying to tackle one yourself.
As I pointed out earlier, small estate affidavits can be used for personal property such as bank accounts and brokerage accounts as well as for real property. They can even be used to transfer life insurance proceeds, assuming you can convince the insurance company to pay the proceeds according to the terms contained in the affidavit.
A small estate affidavit is not necessary when transferring non-probate assets such as jointly owned bank accounts or on accounts with payable or transfer on death designations. Therefore the values of the accounts, and other non-probate assets, are not included in the $50,000 dollars limit.
One more thing to remember about small estate affidavits. The affiant assumes responsibility for distributing the money to the persons entitled to the funds and maybe the person that creditors look to to satisfy debts. Make sure you understand your responsibilities and obligations when executing a small estate affidavit.
Small estate affidavits are a nifty way to transfer smaller estates without the expense and formalities of probate. In recent years, the transferable amount was changed from $25,000 to its current $50,000. I'm hoping that the amount is eventually raised to a more reasonable $100,000. That would put it more in line with our neighbor to the west. I'll let you know if I hear anything.
Opinions expressed solely are those of the writer. Christopher W. Yugo is a member of the Indiana Bar and a vice president and senior trust Officer for First National Bank's Trust Department. Address questions to Yugo in care of The Times, 601 W. 45th Ave., Munster, IN, 46321. Yugo’s information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant or estate-planning specialist.
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