Small Estates: How a Small Estate Affidavit Can Help You Skip Probate Court
- Denise Davis
- Apr 2, 2023
- 4 min read
Updated: Aug 16, 2024
Denise Knows Probate!
If you have ever lost a loved one and became the personal representative of their estate, you know that the probate process can be time-consuming, complicated and expensive.
But what if there was a way to get your inheritance while bypassing probate court entirely?
Sometimes, a person dies without significant assets. Small estate laws allow smaller estates to skip the probate process and puts the inheritances in the hands of the beneficiaries and heirs faster.
This helps keep the court docket clear and helps families reach closure faster.
While not everyone is eligible to take advantage of these laws, those who do will have a much easier time.
Follow along as we take a deep dive into the main tool of small estate laws - a small estate affidavit.
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What is a small estate?
A small estate in North Carolina is any estate valued at less than $20,000 if single or $30,000 if the only beneficiary is a surviving spouse.
For a general idea of the size of an estate, you can calculate the value of any accounts, personal property and assets and subtract the amount of liens, and in some cases $60,000 of spousal support against that property.
Type of liens
Mortgage
Home Equity Loan
A Reverse Mortgage
Tax Liens
Mechanic Liens
Judgement Liens
Example
Asset Value = $100,000
Liens = $30,000
$70,000 (Would not qualify for small estate affidavit)
Asset Value - $100,000
Liens = $80,000
$20,000 (Would qualify for small estate affidavit)
Note that certain assets like real property or life insurance policies doesn’t have to be included if they have a named beneficiary.
A word of caution: if you plan on selling any real property within two years of the passing of the decedent (the person who died) then you should consult with an attorney before using a small estate affidavit.
The funds from the sale of the real property may be counted towards the total estate amount and make some parties ineligible for the small estate affidavit.
A Small Estate Affidavit in North Carolina?
A small estate affidavit is a document that is filed by an individual (affiant) to petition for a portion of a deceased person’s estate. There is a 30-day waiting period before you can file a small estate affidavit in North Carolina.
Who is eligible to file a small estate affidavit in North Carolina?
As mentioned above, not all individuals are eligible to use a small estate affidavit in North Carolina. You can only use the affidavit if you have a legal claim to the estate of the deceased.
You are able to file a small estate affidavit if you live out of state - you’ll simply have to complete paperwork (Form e500) to name a Resident Process Agent.
That person is someone who is a North Carolina resident and accepts mail and other service of process information regarding estate matters.
This video goes in-depth explaining the role of a resident process agent.
How to Settle a Small Estate Affidavit in North Carolina
There are two main ways to settle a small estate in North Carolina: summary administration and collection by small estate affidavit. If the spouse inherits everything, a summary administration is appropriate.
If, however, there is more than one beneficiary of the estate, you can then use the small estate affidavit to bypass the probate courts.
It’s important to remember that, although skipping probate will make the inheritance process much easier, it is still a detailed and complex process that is best handled by an experienced North Carolina estate and/or probate attorney and if real estate is involved find a certified probate real estate agent.
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The Small Estate Affidavit Process
The first step in the process is to present a death certificate and general inventory of money, assets and personal property to the Clerk of the county in which the deceased resided.
Once the necessary information has been provided, you will be named as “executor” for the estate.
This means that you will be responsible for paying any debts the estate has that are outstanding.
After the payment of debts, you will be responsible for distributing any remaining funds, personal property and assets.
This dispensation can be done either by terms of the will if there is one or in accordance with North Carolina intestacy law if a will doesn’t exist.
How can an Estate or Probate Attorney Help Me With a Small Estate?
The best way to execute a small estate affidavit is with the help of an experienced estate or probate attorney.
They can use their years of experience and legal knowledge to carefully consider every aspect of the small estate to ensure that eligibility requirements are met and that the court has received all the proper documentation.
The attorney can advise you of your options and let you know whether a small estate affidavit is right for you.
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* NOTE: North Carolina Probate Solutions and the author of this article is not a licensed attorney or CPA. This post should not be considered legal or tax advice. Always consult an estate attorney or tax professional when needing legal answers and legal advice.