For large estates, probate can take several years and cost tens of thousand dollars or even more. However, every state has simplified probate procedures for small estates that may or may not use a personal representative. Simplified probate is also sometimes called summary probate. Although state laws vary widely, many states have adopted the Uniform Probate Code (UPC), and those states that have not adopted it have adopted procedures similar to the UPC procedures. Hence, most of this discussion will focus on the UPC's version of simplified probate.
There are 2 methods for simplified probate: collection of property by affidavit and summary administration. Most states provide both procedures, but some provide only one.
An important variation in state law is in the upper limit to the value of the estate, which can range from $5,000 to more than $100,000, that can be probated with simplified procedures and what property is included and excluded in calculating its value. However, many jurisdictions do not verify that the probate estate is actually under the dollar limit specified by state law. Sometimes, no dollar limit applies if the property goes to the surviving spouse.
In calculating the upper limit, many states do not include:
- real estate,
- real estate located in another state,
- nonprobate property, such as property in:
- living trusts,
- pay-on-death accounts, or
- property owned as a joint tenant.
Hence, it may be possible for a large estate to use simplified probate procedures by placing most of the valuable property into their nonprobate estate.
Collection of Personal Property by Affidavit
UPC §3–1201 provides that a beneficiary of the will or intestate successor can prepare an affidavit stating that:
- the value of the probate estate minus liens and encumbrances does not exceed $100,000;
- at least 30 days have elapsed since the decedent died;
- no application for the appointment of personal representative is pending or has been granted in any jurisdiction;
- the person presenting the affidavit is entitled to payment or the delivery of the property.
In the affidavit procedure, all the beneficiaries usually must sign under oath that they are entitled to the property, and that there are no disagreements; otherwise there must be probate hearings.
The affidavit is taken to banks or other institutions holding the property of the deceased, providing them with a copy of the affidavit and a copy of the death certificate.
The UPC also provides that the affidavit may be presented to the transfer agent of any securities held by the decedent so that the securities can be transferred to the beneficiary or successor, and to the Motor Vehicle Division of the State Tax Commission for the transference of the title of not more than 4 boats, motor vehicles, trailers, or semitrailers, if the successor pays the appropriate transfer fees. The value of these vehicles is not included in the UPC's $100,000 limit.
UPC §3–1202 releases anyone who is transferring property or money to the holder of the affidavit to the same extent as if he dealt with the personal representative. The holder of the property is not required to investigate the truthfulness of the affidavit, but if the property holder refuses to transfer the property, then he could be compelled to transfer the property by the court, and the court in its discretion, can force the property holder to pay for the cost of the lawsuit and reasonable attorney fees plus up to 3 times the value of the property that was withheld.
Summary Administrative Procedure for Small Estates
UPC §3–1203 allows a summary administrative procedure for small estates, where — if the value of the estate, judging from the inventory and appraisals of the property, minus liens and encumbrances — are only enough to cover the homestead allowance, exempt property, family allowance, costs and expenses of administration, reasonable funeral expenses, and reasonable and necessary medical and hospital expenses of the last illness of the decedent, then the personal representative, without giving notice to creditors, may immediately distribute the estate to the entitled persons, then file a closing statement with the court. The main purpose of this section is to simplify probate by omitting the notice to any creditors because of insufficient value in the property to cover priority expenses and exemptions.
The personal representative can close an estate administered under the summary procedures by filing with the court, at any time after distribution of the estate, a verified statement stating:
- the nature and value of the estate's assets;
- that to the best knowledge of the personal representative, the net value of the estate was within the limits for the summary procedure;
- that the property was distributed to the people who were entitled to it;
- the notice of the closing has been sent to all distributees, creditors, or any other claimants whose interests were affected.
The appointment of the personal representative is terminated 1 year after the closing statement has been filed, if there have not been any objections to the administration of the estate.
UPC §1–106 provides that a personal representative who has committed fraud may be sued by a beneficiary or a creditor or any other affected party who has suffered damages as a result of the fraud. However, the action must be brought within 3 years of the discovery of the fraud. A wronged distributee can seek restitution from anyone who has profited from the fraud except for a bona fide purchaser of estate property and only if the action is brought within 5 years of when the fraud actually occurred.